Howard: It is just a huge honor for me today to be podcast interviewing Stan Bergman who's chairman of the board and CEO of Henry Schein and a personal idol and role model of mine. I got to tell you why you're my – well, I'll read your bio then I'll tell you why.
Since 1989, Stanley M. Bergman has been chairman of the board and CEO of Henry Schein, Inc. a Fortune 500 company and the world's largest provider of healthcare products and services to office based dental, animal health, and medical practitioners with more than 21,000 team Schein members and operations or affiliates in thirty two countries. Henry Schein is a member of the SMP 500 and Nasdaq 100 indexes. In 2016, the company sales reached a record $11.6 billion. Henry Schein has been a Fortune’s World’s Most Admired company for sixteen consecutive years. Mr. Bergmann serves as a board member, advisor for numerous institutions including New York University College of Dentistry, The University of Pennsylvania School of Dental Medicine, Columbia University Medical Center, University of the People, Hebrew University, Tel-Aviv University, the University of Witwatersrand Fund, the World Economic Forum's Health Care Governors, the Business Council for International Understanding, the Japan Society and Metropolitan Opera. Mr. Bergman is an honorary member of the American Dental Association and the Alpha Omega Dental fraternity. Stan is recipient of the Ellis Island Medal of Honor, the CR Magazine Corporate Responsibility Lifetime Achievement Award, the 2017 CEO of the Year award by Chief Executive Magazine, honorary Doctor of Arts from the University of Witwatersrand, Hofstra University, AT Still University, Arizona School of Dentistry and Oral Health, Case Western Reserve University, Farmingdale State College, an honorary fellowship from King's College London Dental Institute and the International College of Dentists. Stan and Marion Bergman and their families are active supporters of organizations fostering the arts, higher education, cultural diversity in grassroots health care, and sustainable entrepreneurial economic development initiatives in the United States, Africa, and other developing regions of the world. Mr. Bergman is a graduate at the University of Witwatersrand in South Africa and is a South African chartered accountant and NYS certified public accountant. Stan, where you almost made me cry twice in my life. I went on in some missionary dentist place. I'm out in the middle of nowhere and all of a sudden you come up to this building and it's a nicer dental office than my dental office and I say, “Whoa! Who built that?” and there it is. This is donated by Stanley M. Bergman, Henry Schein. I told those kids, I got to tell you this right, so I told those kids I said, “I know Stan. He's my friend” cuz I flew down and visited you in Melville in ‘89 and ’91. The two things I couldn't believe that I just started Dentaltown and I had all these questions and I thought, “I'm just gonna fly down there and see if I can somehow catch him going from one wing to the other”. Hell, you took me in your private office and talked to me for an hour. I couldn't believe the CEO of Schein gave me an hour of his time. I'm telling these kids in Tanzania I said, “I know my friend, Stan, he built this for you” and I'm gonna take out my phone and I want you to all say thank you to Stan. They said, “Okay”. So, I hit film and they started singing happy birthday. It's on YouTube you can even find it. I'll send you the link but they all sang you happy birthday because my English wasn't as good as their Tanzanian but man, you've done so much giving back. You've done so much for missionary dentistry, charitable dentistry, humanitarian dentistry, and I want to seriously thank you for that.
Stanley: Thank you, Howard. It’s a real honor to be here with you. I think Mark Twain once said when they were going to introduce him that I was being very worried that they're not going to get all the lists of things I've done. Well, you have a comprehensive list more than anybody could imagine. I'm not sure where you got it all and I have to check will I actually do all this stuff.
Howard: So, Stan I get the questions. You've been CEO of Schein since ’89. That's almost thirty years. Where was dentistry thirty years ago? Where is it today? Since podcasters are usually millennials, when I asked my guest ,email me firstname.lastname@example.org and tell me your name, why you like the show, how old are you. It's about 25% are still in dental school and the rest are all under thirty. So, those kids are probably wanting to know, this is what they want to know. They said, “Stan, when Howard graduated in ’87, was that the glory days? Are they gone now? Is it now just gonna be corporate dental care and PPOs and –
Stanley: I think we're in the most exciting time in dentistry ever and this is for a couple of reasons. First of all, it is becoming very, very clear and particularly clear in the last, say, seven to ten years that there is a direct correlation between good oral care, between good dental care and good health care. It's not only about cosmetics, it's not about drill and fill but it's now becoming clear. Visit your dentist, take care of yourself, and you will live a healthier and more productive life. Businesses are understanding that, insurance companies are understanding it and it's our job to make sure that government understands that healthcare practitioners can increase the quality and length of life. It is such an exciting time to be in dentistry and if you couple that with digital dentistry it is phenomenal. Really exciting time to be there.
Howard: You know, I was listening to the dental director of United Concordia talk and he said that the most expensive thing they have to pay for is a premature baby and the number one thing they correlated it to is the pregnant mother had gingivitis, periodontal disease. This pregnancy, medical, should be covering dental cleanings because we don't want you to have a 1 pound baby. We want you to keep it in the oven for nine months.
Stanley: You're absolutely right. So, the way it works, Howard, is that about two-thirds or maybe as much as 70% of all healthcare spend, relates to non-communicable diseases. There are four big ones. Cardiac, cancer and pulmonary and diabetes and there are two very important other ones. The one of course is mental health and the big other one is oral care and we can reduce healthcare spend and we can improve quality life by providing every American child, adult with access to oral care. What we're doing now is turning dentists far more from drill and fill into healthcare practitioners, an important part of the continuum of health care. What an exciting time to be in dentistry and to be recognized as a healer.
Howard: Very nice. When someone says digital dentistry, what do you think the future of digital dentistry is? Where do you think it's gonna go from today to ten years from now?
Stanley: So, how would you asked me a question? When I joined early on, when I joined Henry Schein with Jim Breslawski who’s now the President of Henry Schein and our CEO of our dental business, the largest dental business in the world. When we joined in 1980, we put the very first fax machine into Schein and we were so excited because we could receive orders from dentists through a fax machine. What happened in the early ‘90s we went to the American dentists and said what you want is a computer in your office. Not to do the word processing but to run all the accounting and we invested in Easy Dental and went to about 20% of all dentists that now put a computer in their office to run accounting. Then a couple of years later, we went to them and said, “You know what? You, doctor, can put in Dentrix and you can do your scheduling and your charting”. Now, the big opportunity is the digitalization of dentistry. In other words the digitalization of the image and the digitalization of prosthetics and tying the two in to the practice management system and the clinical workstation. The opportunity to improve the tools that dentists use to operate their practice so that they can run a more efficient practice and provide quality of care. It is remarkable as a result of digital dentistry.
Howard: You know, chairside milling, CAD/CAM where you're reducing a blog now it's 3D printing. Do you think 3D printing is around the corner or do you think that's a long way off?
Stanley: First of all, 3D printing is going to impact every aspect of life. It is gonna be remarkable. It's time is just beginning but the area that is going to have the greatest impact on dentistry short-term, will be the ability to scan to replace a manual impression. This is going to have a profound impact. Firstly, as with all technologies just like with the calculator or the PC or the camera. They're becoming better and the price is coming down. So, there's no need any longer to put patients through the infamous gagging. You can take a scan and I would recommend that every dentist and every dental assistant and every hygienist, actually have an opportunity to be scanned themselves because once you're scanned and I've had this recently once again I got scanned, I will never go to a dentist that is not scanning for an impression. You take that scan and you can do one of two things with it. You could send a chairside for certain procedures and you can have the crown and bridge milled with phenomenal materials all in an hour or so, or you could send it now digitally and Henry Schein has our DDX Network. We will take that scan and move it to the lab and in the lab, the crown will be milled or the bridge will be milled digitally with phenomenal equipment and great materials. This opportunity that is now emerging in dentistry will reduce errors, will provide for better procedures, ultimately better work product and be far more efficient. This is so, so exciting. I think it's really important that every dentist take a look at the scan and the ability to do chair side milling and sending to the lab. The lab has a long term future. It's very, very exciting. There are certain procedures to do chair side and certain in the lab. Just like in the human world there are certain procedures to do in the physician office during tests and certain to be done in the lab and the two will coexist for a long time. Now the 3D printing will coincide and work with all of these modalities and make a big, big difference in quality and efficiency now and will get better over time.
Howard: You just mentioned to my homies Digital Dental Exchange which is ddxdental.com. Explain what ddxdental.com Digital Dental Exchange. Tell us about that.
Stanley: Well, DDX is the Henry Schein network that allows for scan to be taken and the scan to be sent digitally to the laboratory where the crown and the bridge can be fabricated digitally using digital machinery software milling and provide for high quality product. The crown, the bridge which can then be sent back very well tied into the scan that was sent through the DDX network. Extremely efficient. It's now in thousands of dental offices and in several thousand labs in the United States and working extremely well. We’ve offered this product for about five years.
Howard: I'll tell you what I like the most about the oral scanners. I'm 55 and you can't be a quality dentist if you don't wear loupes. I mean if you just see more you're better. When you take an impression you can't hardly read that impression but when you scan a prep and you can see it forty times larger you're just a better dentist. The endodontists, so many of the great ones have a microscope hanging on the ceiling and before they operate they take an 8x look down the canals and they're always finding crud or something in one of the canals. So, anytime a homo sapien can see better it turns into higher quality.
Stanley: Absolutely. Howard, from your point of view as a dentist you get better quality dentistry no question, but imagine as he customer, as the patient. It's much more pleasant to be scanned and as I said earlier and I will never go back to a dentist that does a manual impression. The scanning is just a completely different experience. It's a pleasure and it takes a few seconds.
Howard: What scanner do you like the most? If someone was listening and saying, “Stan, what oral scanner is getting the best feedback from your dental customers? What scanners you like or does a company like yours have to stay agnostic to brand names because channel conflict of having multiple products in the same category. Do you kind of have to stay away from brands or –
Stanley: Henry Schein, as you know Howard, it has always been a company that is open architecture. Supported open architecture and we support all companies that have good products with good pricing and great service. There are many of these scanners today. We of course offer the 3Shape, we offer the PlanScan which has a new system out there which is terrific. We offer the 3M system and most recently we've taken on now the system of Sirona Dentsply or Dentsply Sirona. The CEREC scanner and there's several in that family. These are all good. It all depends on what the customer’s looking for and the most exciting part as Schein takes on these scanners we integrated right into Dentrix and into our dental school software the Exan system. The key here has not only the scan but you want the scan to go into the practice management clinical workstation so that the information can be sent digitally to the lab if need be.
Howard: You're such a global company. I mean 3Shape is out of Denmark, PlanScan, Planmeca is at Helsinki, Finland. 3M's out of Minneapolis, St. Paul. My, God. It’s a dental world out there, isn't it?
Stanley: Well, dentistry is a global profession. Technology can come from anywhere. The key is to find a way to connect the latest technology with the clinical application sort of works for customers in specific parts of the world. Customer’s needs are different. You could be a solo practitioner, you could be a small group practice, mid size practice, or in fact a large DMO. Each one of these customers has different needs, each condition has different needs, and so our job at the end of the day is to do what we did where we brought software to dentists. To give them options, to give our customers options, and explain what the various options are. Likewise now in the digital era we can give our customers options and allow them to pick the option that's appropriate for them whether it's in imaging or it's in digital prosthetics.
Howard: Stan, what is your definition of corporate dentistry? How big do you think it is today in the United States and how big do you think it'll be and in ten years? I mean, some of these kids were saying, “Stan, when you were little all the pharmacists owned their owned shop. When they turn into grandparents, will they all be working at CVS and Walgreens?
Stanley: No, I don't think that will be the case. I think there are broadly speaking three groupings of dentists. So, they’re just broadly speaking. You've got the very, very large mega groups that are essentially owned by investors. Were you have purely professional managers that are not necessarily clinicians. There are clinicians that run their clinical advisory boards and so that's one group. They're very large. There are a few of those and very large. Then you get the very small practice. It's more or less the solo wanted to. These are people that still want to really be in the community and they're very much desire to be an entrepreneur running the old practice. Then what you have is what we call the mid-sized practices and it's the mid-sized practices that are generally five, seven, eight, nine, ten practices that maybe two dental buddies that got together when they were at dental school and decided to go into practice. Maybe one of them is the parents’ had a practice and they want to grow it. This is the small midsize group practices that are run by dentists. All three of these opportunities have a future and all three of them will grow and the DMO practices, many of them are providing outstanding if not most clinical services. The mid-size are doing that, the small ones are doing that and there’s room for all of these practices and each one has different models. Each one that has different financial needs and each one requires different kinds of service from us and Henry Schein is organized in a way that we provide different service to each one of them with its consumables, product software. The services we provide, custom match the needs of that customer.
Howard: I tell you the most fun I ever had watching Jim Cramer was when you were on his show and I thought I can't believe I know somebody who's on Cramer. Cramer, another great, bald, short, fat, bald journalist. I support all the short, fat, bald journalists.
Stanley: You and Cramer have one thing in common. You do your homework.
Howard: Oh, thanks buddy.
Stanley: He, believe me, knows so much about Schein. He understands us and it comes out during the questioning, likewise with you. You do your homework and you get the best out of the people you interview so they give you an honest answer to question. Sometimes when you get interviewed by people and they have not done the homework, they don't know how to answer a question but the two of you are very clear. You've done your homework and you ask me your questions.
Howard: We're both bald, handsome beauties.
Stanley: Well, it's the handsome that I would acknowledge yes.
Howard: Well, I want to ask you a very specific question. How would you answer this as Jim Cramer asked you it. You're on the show just this morning. Your stock symbol as HSIC posted great sales, blah, blah but when you look at these very, very large mega groups you know the names of them. None of them could go public. You’re publicly traded. You're in the SMP 500 index, you’re in the Nasdaq 100 index. How come none of these can go public? Why are they always owned by private equity, things like that?
Stanley: Yeah, that's a good question. First of all, they are very good investments and it can be. If you get a good management team, you get a good clinical council of dentists and you have a good business model you can provide a very good return on investment and high quality care to the customer. So, that works very, very well. Having said that I think there will be a time when a few of these will go public. A couple of them now pretty mature, they've done it but you need management that is not only clinically capable because you need that. Management that of course understands how to run the systems but you need management that has worked with the public. In order to be a successful public company, you have to be in a position to provide ideas of where the company's going, strategy and relatively predictable income growth. I think the time will come when we will see group practices going in that direction. We've seen public companies very successful ones in the medical arena and in the animal health arena. A very successful on that mission is America I did very well for shareholders. They just were bought by a private company, a family company not because it was a bad public play but they built such a great strategic company that the Mars company bought them.
Howard: Then when you go around the world, Australia has two publicly traded. 1-300-SMILES, Pacific Dental and then Singapore has one but you haven't really seen them outside of Singapore and Australia. There's no publicly traded dental clinics.
Stanley: I think a lot of these companies are still seeing value in growing. Buying practices or investing in De Novo practices. The time will come that we’ll start seeing public offerings in these areas.
Howard: I called this show Dentistry Uncensored, can I ask you a tough question?
Stanley: Of course.
Howard: At last year at the Greater New York which right now and you're in Melville, you're about 30 minutes from that meeting. Amazon had a big booth there. Do you think Amazon's gonna be a disruptor in the dental industry? Do you see it being a major player to someone like Henry Schein?
Stanley: Look. Amazon is an important player in providing internet capability. Electronic ordering. I would say the biggest disruptor from that point of view in dentistry was Henry Schein. When we came out with our first - we were Amazon before there was Amazon. The first. We listed all the products. You remember this.
Stanley: We published the price for which it took us until about 10 years ago to be forgiven by many people in the industry because we actually allowed for transparency. We've published a price and we've put pressure on the marketplace to be competitive and transparent and then you know what? If a customer wanted to order something we actually had it in stock. So, we came up with Amazon before Amazon was ever thought of. We then took that and put it on tO touch-tone telephone. We then took that, put it onto an intranet. We then took it and put onto internet. Now we’re tying in all of what we're doing with our field sales consultants. These people are highly valuable. We have four and a half thousand field sales consultants around the world. Dental, medical, and vet. Their job is to go into a dental office and say to the dentist or the manager of the office, “We want to help you run a more efficient practice, we know best practices so that you can provide phenomenal clinical care. By the way, everything you need we have digitally available on one of our internet programs. We have information on the products. We have videos on the products and I can help you, I'm the consultant. I can help you with your practice. I'm not gonna charge you for it. All I want you to do is buy our products from me and my prices are fair”. It's a proposition that's outstanding. Will it be an opportunity to buy certain products through an internet company? They exist already for Amazon and these companies out there providing services for things like gloves and masks and stuff like that there will always exist.
Walmart sold that stuff, Costco - it's a very competitive market. Our competitors and us, we duke that out every day to provide our customers the best value and I think the Henry Schein formula of helping our customers operate a more efficient practice so that our customers provide better clinical care is the winning formula. It's worked for many years and I think it will continue to.
Howard: I want you to put your dad hat on. She's a little girl, she's 25. She just graduated a few months ago from AT Still University where our buddy, we have a common buddy, Jack Dylan Berg. She's got $350,000 of student loans and she says, “You know, when I got out of dental school we never place a single implant, we never did a single case of Invisalign”. She's asking you. What advice would you give her? She's got $350,000 in debt and she can't take all this continued education at the same time. She can't go study Invisalign and placing implants and sleep apnea and cosmetic dentistry. How should she manage that enormous debt and what dental skills do you think are most vibrant in the marketplace and she'd be most likely to have dental patients that wanted to pay her for those services?
Stanley: So, Howard the first thing I would say to congratulations. You've entered in a phenomenal profession. The profession is great at a great time as I said you now have the ability to be a healer and it provides a very good income stream. So, the first thing I would say is, “Please, doc. You have learned how to be a great clinician. We went to AT Stills you're not going to get out of there unless you qualified as great, great clinical practitioner plus if you went to AT Stills you came out by the way with great values where you are someone that cares about your
community. So, congratulations. You want to go in a private practice? Perhaps take a few years and work for a large group, figure out how they do it, see what you like and what you don't like and then reach out to a Henry Schein field sales consultant. We will come in and talk to you about how to set up your practice. That's what we do for a living. This is the software you should get. This is how you get your customers. This is the location you should be in. This is how you finance it. This is the kinds of procedures I would focus on but I would say there is a plethora of opportunity. Yes, there is more opportunity in certain parts of the country than others. It is great to be a practitioner in New York City. It's a wonderful place and it's the most exciting place in the world - I live here but please remember there's no shortage of dentists. If you're going to certain parts of the country there are shortages of dentists. So, it's up to you but as a dentist, as a graduate of AT Stills you have a ticket but please remember your ticket will get you to where you want to go in terms of financial results and a high quality of professional satisfaction but you have to remember you're in the free market and the free market you're running your business. Thank God still in the United States today, most healthcare is delivered through the free market which in the end has all of its challenges but is the best way to deliver care. There are many, many challenges with it. It's never perfect but you have an opportunity to be at private practice. Do well professionally, economically but you have to realize you're running a business. Let's talk”.
Howard: You walked into that question I’m gonna ask you. You know, America is very unique in so many ways. It's the only country that has more guns than people and they're never gonna give them up and it's the only country that doesn't want socialized medicine like they have in Canada, Australia, all over Europe. Why do you think America is like that and do you think it should be Medicare for all or do you think it should be private sector? What are your thoughts on that since it's so controversial?
Stanley: Yes, it suggestions and thoughts and my thoughts are that we spend 18% of our GDP on health care. The best way to deal with health care costs is through making sure that we deal with the NCDs, the non-communicable diseases which are almost 70% two-thirds is 70% of a health care spend. So, we need to make sure that everyone understands that prevention and wellness is better than being sick. How do we do that? We make sure everyone gets a primary care doctor so that everyone can see a doctor and discuss how you stay well and how you prevent yourself from getting sick because the most expensive way to deal with sickness is when people show up in the emergency room. A key part of the inefficiency in our system is that people in the past didn’t have a primary care physician so we had to take care of them in emergency room. Everyone is taken care of. It's very expensive. We got to prevent people from getting sick. I believe in a multi-provider network systems, a series of systems with this free market in its competition but everyone should have the ability to see a primary care physician and by definition primary care includes dental care because without good primary dental care you do not really get primary care in itself so what's required here is everyone should be able to have a primary care physician including a primary care dentist so we prevent people from getting sick rather than paying for people's treatment when they show up at an emergency room. It should be a free market with multiple providers with of course good regulations to make sure that the quality of care is good. I'm anti one-payer system. It doesn't work. Anytime you have a lack of competition you end up with inefficiencies and the government must supply and provide the health care.
Howard: You just said they should have a primary care physician because it's most expensive to treat them in emergency room yet 8% of emergency room visits are odontogenic tooth related in origin. What does that say to our dental industry when 8% of the emergency room visits are from their tooth?
Stanley: Well, you’re 100% right because we're not providing primary dental care to everyone. There is about half of the country that gets some kind of insurance. There is a small percent that gets some kind of Medicaid and there's 30 or 40% I don't know the number, you know this better than me, don't have the ability to go to dentist. If we got those people to go and see a dentist they would not go to the emergency room. Our cost of the emergency room would go down. People would be healthier, productivity would go up and we'd be happier people.
Howard: Final question, I know you're the busiest man in dentistry. I can't believe you gave me a half hour your time. I've already taken 32 minutes but my last question to is you and Jack Dylan Berg, when you talk about AT Still you talk about how, not only did you graduate confidently but you had values and you were related to your community and you've done so much charity. Where does that come from in you? What was going on in your journey where that would become a major focus on you that other people –
Stanley: Values begin at home. I saw Henry and Esther Schein and their sons. They gave back to the community and I would submit to you that Benjamin Franklin came up with the best philosophy doing well by doing good and I would submit to you that businesses that subscribe to that publications that subscribe to that and dentists. They give back to their community will get more out of it. Personal satisfaction and they'll build their brand. At the end of the day if you can align your interests with society you will be successful. What a great profession dentists have. The ability to run a business and align the needs of society and the work you're doing on communicating all this is really important for the profession Howard.
Howard: Well, I'll tell you what. I had so much fun in Tanzania. It was at the base of Mount Kilimanjaro. We climbed that the week after. We spent a week in your dental clinic and then we climbed Kili and those little orphans were so adorable. It was an orphanage and it was about 250 kids and I mean what you've done for dentistry is so amazing. I can't believe you're running an $11.6 billion company, been on Cramer. If there was ever a rock star in dentistry it would only be Stan Bergman. Thank you so much for coming on the show today.
Stanley: Thank you very much. Thank you for what you're doing for dentistry and any dentist that wishes to go on a mission anywhere in the world to help underprivileged people please call Henry Schein. He’s happy to give you the supplies.
Howard: Oh, you're too kind. Love you to death. Thanks for coming on the show, Stan.