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VIDEO - DUwHF #915 - Kevin Sauer
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AUDIO - DUwHF #915 - Kevin Sauer
Dr. Josh Turnbull is founder and CEO of Lydian Dental, a new aspirational brand of dental clinics with locations in Phoenix, AZ and Austin, TX. Dr. Josh’s story began in 2008 where he was doing research both at the Mayo Clinic and with Dr. Gordon Christensen at the Scottsdale Center for Dentistry. This led him to pursue an MBA at Harvard after he completed his DMD at Harvard School of Dental Medicine. During these years, Dr. Josh realized that the dental industry was experiencing massive consolidation, but he was disenchanted by much of what he saw in the corporate dentistry world. He asked himself, “Why is there no Mayo Clinic of dentistry”? Thus, Lydian Dental was born.
Lydian is out to make dentistry more affordable, convenient and fun. They like to call themselves the “anti-corporate” brand of dental clinics, with a focus on great design and user experience, which they were recently recognized for nationally in Wired Magazine. They currently have 3 Lydian branded clinics in operation and a mobile clinic which launched in Austin 3 months ago and is providing services to companies across the city. They are also developing a Membership that they feel could disrupt the traditional dental insurance model. Lydian is also committed to giving back. Through their Lydian Smiles initiative they provide pro bono services both locally and internationally.
Dr. Josh is also a proud father of 4 children and is married to the most wonderful woman on earth.
Lydian is expanding nationally and is looking for dentists to partner with. For more information, contact Dr. Josh at josh@lydiandental.com
www.lydiandental.com
Howard: It is just a huge honor for me today to be podcast interviewing Kevin Sauer, Vice-President of Business Development. This is going to be a real ... Business Development of thecdigroup.com - thecdigroup.com. This is going to be a real treat for you. This guy's bio is mind-blowing. Kevin Sauer is an executive that has worked in the dental industry for the past thirteen years. Kevin started with Pacific Dental Services (PDS) thirteen years, running again a single practice. During his eight years at PDS, Kevin managed multiple practices before starting from scratch the Professional Recruiting Department, which was responsible for recruiting all clinical positions, most notably dentists . During his tenure with PDS, Kevin and his team helped PDS grow from a regional DSO to one of the largest DSOs in the country. We've had their founder on the show, Stephen Thorne.
After his time with PDS, Kevin moved to Denver to work with Birner Dental Management Services, a regional DSO with approximately sixty-five offices. At Birner Dental, Kevin oversaw Talent Acquisition and Organizational Development. After two years with Birner Dental, Kevin moved to Tampa to become Coast Dental's Vice-President of Clinical Talent Acquisitions and Development. After a year, he was promoted to Vice-President of Operations, where he was responsible for operations, clinical talent acquisitions and credentialing. Coast Dental has approximately one hundred and seventy offices throughout five States. In 2016 Kevin and his family moved back to Lone Tree, Colorado, where he joined the CDI Group, to become their Vice-President of Business Development. The CDI Group is the premier leader in their space and they partner with DSOs to create and administer white label, custom-made, proprietary, in-house discount plans for DSOs across the country. Some of their partners include Pacific Dental Services, Heartland Dental Services, Smile Brands, Great Expressions, Blackford Dental Management, Gentle Dental of New England, Dynamic Dental Partners, MB2, First Choice Dental, and many more. The CDI Group also administers discount plans for private practice as well. Kevin received his B.S., Bachelor of Science, in Marketing and his Master's in Leadership and Organizational Development from Azusa Pacific University. Kevin also attended my Dental One-Day MBA. Throughout his career in dental, he and his teams have hired thousands of dentists, led many key initiatives at several DSOs, and has led operational oversight of hundreds of practices. If you're looking to increase your cash patient count and retention or would like to hear more about the CDI Group and its success they had with DSOs and practices across the country, please reach out to Kevin. What would they do? Would they just go to thecdigroup.com, or should they email, or ...
Kevin: Yeah, I'd say they could do that or email me.
Howard: What's your email?
Kevin: Kevin period ... kevin.sauer@thecdigroup.com.
Howard: And a big shout out to Kimberly Sauer who was my classmate in 1987. I think she's been in Southern California, in the military for thirty years, and just an amazing dentist. But, my g*d, you know, I love getting somebody to talk about DSOs on the show because that's a big, new thing. I mean, they didn't ... everybody's always talking about DSOs. A lot of people always say things like, do you think, you know, when I was little - I'm 55 - when I was 25, all the pharmacists owned their own business. And then they all got wrapped up by Walgreen's and [00:03:31] [sounds like: CDC]. [0.8] So, my question is you worked for three of these DSOs. You know this space as well as anyone. Do you think in twenty years all the dental students listening to you right now will be working at McDental's?
Kevin: Do I think all? No, no, I don't think all dental will consolidate to DSOs, but I think in the past ten years, fifteen, twenty years have shown that it's consolidating and it's still continuing to increase. I don't expect private practices to purely go away. DSOs represent roughly, you know, 20 percent of the ... 15 to 20 percent of the market right now. I don't see twenty years from now it going to 90 to 100 percent.
Howard: Okay, I'm going to hold you to your feet and I'm going to call you back in a decade. It's 2017. Let's go all the way out to 2027, or we'll wind it out to 2030. You're supposed to never make predictions, so I'm advising you not to answer my question!
Kevin: Sure.
Howard: In 2030, what percent will work for DSOs?
Kevin: 2030, I'd say 30, 35 percent.
Howard: So, a third, one in three?
Kevin: I think so.
Howard: So, right now it's probably one in five, and in ten years you think it will be one in three?
Kevin: I think so.
Howard: Okay, but let me ask you one question, because this Dentistry Uncensored: if, you know, when Snapchat said they wanted to go public, g*d, Wall Street gobbled it up. Facebook, Snapchat. I mean, you look at the stocks of Amazon - and Amazon basically hasn't had any earnings and their stock just keeps going up. Another one, Google, Facebook. All of these companies go public. If one third of dentistry is going to be working for DSOs, you'd think Wall Street would be taking all these companies' IPOs and they'd all be exploding, and every day Dentaltown.com would have like a chart stock of how all the dental stocks are doing. How come they're not publicly traded?
Kevin: You know, it's a good question. Obviously, I don't know. It's just my opinion. There is a couple out there in the past that have tried it, you know, taking it public and then taking it private again. You know, obviously a lot of these guys, a lot of the CEOs, a lot of leaders in still the private DSOs, like being private, they don't want to open up everything to the outside. You know, there's one that I know of, one DSO right now that is publicly traded. I know a lot of other DSOs are following that one, and that one seems to go up and down, you know.
Howard: But it's publicly traded, but not on the New York Stock Exchange and not on Nasdaq.
Kevin: No, it was. It's no longer. It's been relegated, I would say, to a lesser trading post, but a lot of them are looking that way. You know, I guess, I'm kind of talking in circles right now, because I don't have a really great reason as to why. I do know that ... well, I know this, you ... I listened to a podcast that you had, you know, within the past couple of months, and there was CEO from a large DSO and he talked about - I won't say it by name - but he talked about how they don't necessarily like being the leader in a lot of the areas or, I guess, first to market in whatever it's technology or it's ownership or maybe it's this space. Maybe they're looking for one of the biggies, a PDS, a Heartland, an Aspen, Smile Brands, Great Expressions, whoever those may be, for them to test it and then others will follow suit.
Howard: Well, this is Dentistry Uncensored and I'm going to ask you this question, and I hope I don't get you fired or thrown under a bus, but a lot of these ... about 25 percent of these podcast listeners are still in dental school, or maybe they got out of dental school and they're working for just an associate job in the private sector, and they're thinking about working for a DSO, are there any you would recommend? And you wouldn't recommend? Any that you'd recommend more than others?
Kevin: Yeah, that's a real loaded question!
Howard: I'm trying to get a bull's-eye painted on the back, 'cause ...
Kevin: I know. I appreciate that, considering I worked for some and then, and what I do now, we are partners with a lot of them.
Howard: See, what my goal is is to throw you under the bus and increase my ratings! So ...
Kevin: There you go. I think I could help with that. Unfortunately, I don't know that I'm going to do that. The long and the short is, yes, without me giving you specifics, you know, who to or who not to, I would ... first of all, I definitely recommend all younger dentists, new grads coming out of school or having practiced for a year or two, whatever, even experienced dentists, look at DSOs. But, when you looking at DSOs, there are specific questions that I would look towards or ask before I would decide that I want to work there or not, and I think if you follow ... if you ask the right questions and you put yourself in the right situation, I think you can see which DSOs are good, which ones are thriving, which ones you may have a higher chance of be more successful with, and those that you might want to avoid.
Howard: And what would some of those right questions be?
Kevin: You know, so, there's a ton, you know. How many dentists - some of them aren't going to be mind-blowing, so, a lot of your dentists or students already know, and some might be new to them but, you know, how many dentists have there been in that practice in the last one, two, three years? How many dental assistants do they get to work with, because there's not ... a lot of them will say, you know, two, it might be one, you might have to hit a threshold before you get that second dental assistant. What is the payer mix in that practice? You know, is it HMO, PPO, fee for service? Is it Medicaid? In California, is it Denti-Cal? Not that there's anything wrong with Medicaid, but groups, some groups I see that that is their strategy, that they want to tackle the Medicaid market and they may do that very well. Other groups might have fallen into that recently, because they're doing other things, not necessarily very well so they're kind of grasping at straws as to how to increase their patient flow, so they might open up the gates to Medicaid but it's not necessarily a Medicaid model per se. So, I'd want to know, if it is Medicaid, when did you start accepting it, because if it's more recent than not, you know, that might be kind of a telltale sign. You know, the labs, the suppliers, you know, obviously you're going to see the easy things to see. Their technology, is there a lack of technology? But if there is technology, that can be good but know that you have to use that technology. If a DSO or a group has that technology in the practice, they want you to use it. If you have any problems with that or don't think that's the right restoration a lot of the time, then it might not work out. And a lot of the DSOs that have that technology that I'm talking about, whether it's scanners, whether it's CAD/CAM, whatever it may be, they're pretty upfront and honest on the way in as to what their clinical philosophy is. You know, or what does the schedule look like? The DSOs ... if I was a student, I would never go work in a practice if I didn't get to get a glimpse of what the schedule looks like or if I didn't get to go shadow in that practice. Where I used to work, we used to, you know, we used to challenge students to come in or even younger dentists, dentists, whoever, whether they're more experienced or less experienced, we'd want them to come in and we'd want them to spend time with the doctor that he or she may be working with. If they were going to be solo in a practice, we'd want them to spend time in that practice before working, so they'd have a pretty good indicator of what they're getting involved in. So, the more transparent, the better. There are some DSOs out there that don't want to do that and that's a pretty big red flag if they don't want you to come in and allow you to spend time shadowing the practice.
Howard: Okay, I want to tell you what I hear on the street that just really, really upsets them: Number 1 is labs. Some of them, they have to use one lab and they don't like the lab and it just really gets on them ... I'm doing my job, they're not doing their job. So, if you have to use one lab, that might be a deal-breaker. Number 2, they're always told alone that this contract is non-negotiable, like, look, come on, dude, we have a gazillion offices, this is our boilerplate, take it or leave it. Is that true? Take it or leave it. Or is it negotiable? Because on the same breath of them saying, take it or leave it, you know, these companies are all paying recruiters like you used to be, big bucks to go to find them employee dentists. So, if it's so non-negotiable, then why are they paying headhunters to go find them dentists?
Kevin: So, I'll answer the first part of the question first: the labs and the contract, usually those go hand-in-hand. Yeah, to be honest, I haven't worked ... there are DSOs that want to consolidate it down to one lab. The three DSOs that you mentioned that I work in the beginning, you know, part of why you join a group is to lower your costs and so, by consolidating labs, obviously that's going to do it. But I never worked for a DSO that limited it to one lab. PDS, obviously, they use CAD/CAM, they use CEREC, so they want to ... their clinical philosophy from their owner/doctors is mostly that of CAD/CAM, but even if you wanted to go use a lab, all the DSOs I've worked for, you have multiple choices. You didn't have whatever lab you wanted, but, yeah, that is part of it, but that coincides with the contract talks too. So, to answer your specific question, I worked for a group before that the contract was the contract. Either you can take ... you want this, yay or nay. We're not going ... what might have a little wiggle room for negotiation is the daily comp, that daily guarantee, and that depends on, you know, the market. If you want to go be a dentist in Orange County, Laguna Beach, San Francisco, you know, you're not going to have as much flexibility than if you want to go be a dentist in Bakersfield, California. But then I've worked for other groups where I think that's probably not the norm, where it's a boiler-plate contract and there's no room for negotiation. I've worked for other groups where they do allow for some negotiation. And the labs, sometimes, is a part of that because, you know, that is another thing to look out for. How are they going to pay you? Are you going to be paying lab fees, are you not going to pay lab fees? If you're going to pay your lab fees, I don't really care where you go get your work done. You can go do that if you're going pay your lab fees, but, you know, that's part of what you need to look out for too if you're a student or anyone looking to join a DSO. Are they paying you on collections? Are they paying you on production? Are they paying you on adjusted production? What is the guarantee? How long does it last? Is there a daily draw that after the guarantee goes away if you're not at a certain production number then you have to start almost paying them back? So, there's a lot of things to look for.
Howard: Should they have a lawyer look at the contract before they sign it?
Kevin: Yes.
Howard: Yeah, absolutely, and I recommend a lawyer that you find on Dentaltown that only does dental, because so many of these young kids they think they're doing the right thing because you know they go to church, they talk to their pastor, "Pastor, do you know a good, moral, ethical lawyer?", and they go, "Oh, yeah, Freddie. He's been a member for twenty years."
Kevin: Sure.
Howard: Freddie's never done a dental contract. And that's where they find the dental attorney and their dental CPA - at church; which sounds perfect, but I'd rather go to an eye doctor who only does eyes than to a foot doctor who's going to do his first eyeball on me. But when you started on the right questions, the first one you said real fast, I did not ... you said, "How many doctors? One, two or three?" Does that mean how many doctors have stayed there one, two or three years?
Kevin: How many doctors have there been? If you're a GP, how many GPs have there been the last one, two or three years?
Howard: In that one office?
Kevin: In that one office, correct. If you're walking into a group and you're the third GP and it's October and, you know, you're the third GP since January, that's going to open up a lot more questions, and they need to be able to provide pretty good answers as to why. You know, what's the new patient count, is it dwindling, I mean, the doctor coming in, what kind of work was he or she doing? What is the reason that that last doctor was leaving? Now, there are great dentists out there, there are dentists who are not as great, however you want to define that, whether it's clinical skills, whether it's case acceptance, patient communication, communication connection, whatever that is, so, it's not necessarily that a dentist coming in replacing other dentists is not a bad thing, you know, and you could be walking in as a new dentist into an environment where there's a lot of opportunity, there's a lot of patients, new patients and continuing care patients, and the last dentist just wasn't able to get patients to say yes. If his or her, you know, essentially production numbers were low, that's not necessarily an indicator that your production is going to be low too. But sometimes that's part of the conversation, and it may be. Quickly, I want to go back to, you know, when you said the attorney, I can't ... finding someone who focuses on dental, I can't stress that enough too. 'Cause at the end of the job, just from - I'm not a clinician, but from my standpoint where I used to work with clinicians in negotiating contracts from the DSO standpoint - at the end of the day, we all love attorneys, but their jobs are to find things, you know, even the most "perfect contract", if you present that to an attorney, it doesn't matter what the contract is, they're going to find a way to mark it up, to red it all up. So, someone who has experience and knows what to look for and knows how to, you know, what questions to ask the DSO back, I can't agree with you enough. Because if you go to, I don't know, someone who specializes in, you know, litigation, you know, by people that have been in car accidents, they're going to find things, but at some point ... I've been in a lot of negotiations where they're kind of just spinning their wheels around things that really don't matter. So, I agree about with everything you said.
Howard: I've had the best attorney for thirty years in Phoenix, Arizona. Just an amazing attorney! And 90 percent of the time he says, "You know, the best person for this specific deal would be this lady in Scottsdale."
Kevin: Yeah.
Howard: And, I mean, he only takes ... and I always say to him, I always say, "Ray, I feel bad, man, I always ...", and he goes, "No, no, no. I love the referrals. All these other attorneys that I'm referring to you, they remember that, and they refer back." But, yeah, it's just as specialized as medicine. Do you have a favorite dentist/DSO contract attorney that you could e-mail me his name and I'll bring him on the show? Who shows you how to ink up a contract?
Kevin: Off the top of my head, no, I don't, because as DSOs we generally work ... if we told, if I told a dentist, "Hey, go use this attorney", that dentist is not going to use that attorney, because he's going to think I'm representing a DSO and he's not going to be good enough.
Howard: But, if you've worked with any really good ones, e-mail me the name howard@dentaltown.com, because it's a common question. I get a lot of e-mails every day. Ryan, how many e-mails do I get a day?
Ryan: It's like a hundred, at least. Like two hundred emails a day.
Howard: Yeah, it's a hundred or two hundred.
Kevin: Okay.
Howard: And I love it. I mean, I do. I love answering. But it's a common question. So, if you have a question: howard@dentaltown.com. If you're a lawyer out there listening - and, by the way, everybody makes fun of lawyers until you need a really, really good one!
Kevin: Sure.
Howard: And met my attorney thirty years ago, when I really ... some company was really being unscrupulous, and I was young and scared and this guy crushed them. And, so, yeah, so everybody doesn't want attorneys until they really, really need one. But what I ... the reason I called you and you didn't call me is, the reason I wanted you on the show is this: you go see a dentist ... Oh, one last question before I get to the reason I called you, one last question. When you look at all these DSO successes, does demographics matter? Do you see DSOs that go to rural do better than DSOs that go to downtown Denver and L.A.? Do demographics matter? I mean, this girl watches movies and says, "Build it and they'll come!" I mean, you could build a baseball stadium in the middle of a cornfield, and be, you know, in the major leagues. So, do demographics matter in your opinion?
Kevin: In my opinion, yes. Now, I think a DSO can be successful, however you want to define successful, it's all relative. But I think a DSO can be successful in just about every market. However, I mean, if I was starting a DSO today, I wouldn't go to downtown San Diego, downtown Denver, downtown New York City. And it's kind of, it's a challenge sometimes because a lot of the more rural locations and a lot of these DSOs just kill it, they do well, and they do well because there are not a lot of other dentists there. I used to travel the country and I'd go to dental schools, and, you know, when I was back years ago when I was with PDS, I'd travel to thirty, thirty five dental schools a year, and I'd talk to the students, and, you know, I would say, I'd get the question, you know, "Where are the good markets? Where should we go?" And I'd say, "You know, you want to stay away," as an example, I'd say, "You probably don't want to go to, you know, California. You might want to look at other places. You might want to look at Georgia. You might want to look at, you know, Nebraska, other parts of Colorado, whatever that looks like, or, if you go to California, you probably want to go to Hesperia, Victorville, the High Desert, Lancaster, Bakersfield, Sacramento, Fresno", and I would say, "Unless there's a specific reason, unless you're from there, you have a boyfriend/girlfriend/spouse from there, you know - everyone wants to go to L.A. Everyone wants to go to Miami. Everyone wants to go to San Francisco or New York." So, I do think demographics play a factor, but in the rural areas generally do really well. The biggest challenge is finding that doctor who not only wants to go to that rural area but wants to stay in that rural area. And coming back to the contract negotiation, those are the times when there's a lot more leverage for you to negotiate. Whether it's a higher daily guarantee, whether it's a higher percentage, whether it's a longer guarantee, you know, the more rural area, I mean, the better you're going to be oftentimes. A young dentist coming out of school and going to Orange County, going to San Diego County, you know, you can find a job maybe, but you're not going to make, you're probably not going to make a whole lot of money.
Howard: And when you were in California - you've been with three companies, California, Colorado, Tampa - where were you in Colorado? I mean, in California, what city?
Kevin: We were based out of Irvine.
Howard: Irvine.
Kevin: Orange County.
Howard: So, that's basically L.A.?
Kevin: If you're from California, you don't think so. Orange County and L.A. ...
Howard: Well, you know, when I grew up in Wichita, Kansas, when I was taught geography, California had three cities: San Diego, L.A. and San Fran.
Kevin: Yes.
Howard: And then you go the rest of your life, and you don't even meet anybody for those three. The other one that's very confusing is, there's no such thing is New York City. Just quit saying the word. You'll say, "Are you from New York City?" "No, I'm from Manhattan." "No, I'm from the Bronx." "No, I'm from Queens." "Is there a New York City?" and they just look at you like ... Basically, there's only a New York City if you're standing in Kansas.
Kevin: That's true. So, everyone wants to go to Manhattan. That's where everyone wants to practice dentistry.
Howard: Yeah.
Kevin: Just like everyone wants to practice dentistry in San Francisco, and you can go, and you can make $300 a day.
Howard: And if you meet a dentist in Manhattan, and you say, "Do you practice in New York City?" He says, "No, I practice in Manhattan."
Kevin: That's right.
Howard: So, but anyway, you said you shouldn't go to San Diego and I agree. Even the Chargers left San Diego. So, my next question was, in your three markets in Colorado, in Tampa Bay, are you more a Broncos fan or a Buccaneer?
Kevin: Good question. Long-winded and I won't get into it. I'm actually a Dolphins fan, for my own personal reasons, since I was a little boy. Dan Marino. But my wife was always, God bless her, she, when we got married fourteen years ago, she became a fan of all my teams. I couldn't ask her to be more, until we moved to Denver and she said, "You know, since we've been together" - she liked me post-Dan Marino, we got together post-Dan Marino - so, she said, "You've liked this Dolphins ... we've liked this Dolphins team. They're horrible, and they're always horrible." Denver's an awesome town. Denver's a Broncos town, and a really cool sports town, so we moved here, she bailed on the Dolphins and now she's Broncos.
Howard: But you kept her anyway?
Kevin: I kept her anyway, yeah. As long as she's not [00:23:44] [sounds like: rooting for the Ducks], [1.4] you know, all that, we're good.
Howard: But here's why I got you on the show, because here's the problem. You know, everybody talks about the opioid epidemic, you know, 50,000 Americans are dying each year in the opioid epidemic. The dentists are addicted to a drug too, and it's called "new patients", and it's a drug. You'll meet a guy in a town of 5,000 and he got there when he was 25, now he's 65, he's been there forty years, getting thirty new patients a month for forty years, you go up to him at 65 and say, "Hey, buddy, what do you need?" He says, "I need new patients." It's like, dude, you've gone through everyone in the county three times. How the hell? And you can't find a single dental office in America that doesn't take new patients. And then you ask every dentist, "Well, are you patient-focused, or do you just look in the mirror and it's all about you?" "Oh, I'm totally customer-centric!" "Really?"
Kevin: Patient-focused.
Howard: "Then how come four out of five of your patients never come back? And you think you're the best dentist in the world, but four out of five of your patients don't come back." So, you go get more alphabet soup titles behind your name like some real estate agent. Nobody in the world knows when you get a real estate agent card, what the ABC QXZ LMNOP behind her name means, and you keep getting all these credentials and all these hundred thousand Dollars of equipment and 80 percent of your patients never come back." And you're into this patient retention thing. And I want you talk about, if I was going to ask you would you rather be relying on new patients or customer retention?
Kevin: My personal opinion is the biggest focal point in a practice for a dentist from the front desk should be on continuing care, patient retention.
Howard: Absolutely. Undeniable.
Kevin: I never ... and where I've been, I've always tried to. In some positions, obviously, I had a greater responsibility with some DSOs than others as my career progressed and I moved up, but when I was in positions of leadership, especially as it pertains to operations, that was always a focal point, always my Number 1 focal point and it was a challenge. And in some places I've been, I've worked at, it was a cultural change in getting not only the dentist, but a lot of times the organization will follow the dentist and follow their mind, and what's important to them, and so they get behind that, and there's nothing wrong in that, but I've never met a dentist who hasn't, who can't see more new patients, or who sees enough new patients. It doesn't matter if they're seeing two a day, three a day, ten new patients a day. It's not enough. So, give me more new patients, give me more new patients. And I'll expand on this, but I'll also get back to when I said in the beginning, you know, when you asked me who are the good DSOs, who are the bad DSOs, and I said I won't tell you names, but I'll tell you what to ask, what to focus on, and I mentioned, in terms of the payer mix and Medicaid, I mentioned grasping at straws. I think there's a lot of DSOs out there that are not necessarily focusing on the right things, what I believe are the right things. So, their whole mind shift, everything's about new patients, new patients, new patients. And at some point, new patients start to dwindle, because if you're only thinking about new patients, the customer, the patient experience, is probably not that great. So, then they start opening up Pandora's Box. How do we get more new patients in? And I'll take this payer, or I'll take this Medicaid, or we'll do this, we'll open this. And it's a slippery slope. So, my whole thing is new patients ... where I've worked, I've seen that, generally-speaking, when you open up a de novo practice, when you open up a brand-new practice, you will see just organically a new patient increase for about the first seven years. So, year on year, for about the first seven years, your - and this is approximate - your new patient count will increase. After about seven years, that new patient count will start decreasing and then sometime over the next couple of years, it will plateau out. It will plateau much lower than at Year 5, 6 and 7. So, along that same point, along Year 7 to 8, if your continuing care, if your patient recall, retention, doesn't eclipse that of your new patients, the practice is really doomed for failure long term. So, new patients are great, and we definitely want to get new patients in there. You want to treat them well, so they're telling their friends, family, you know, spend time on marketing, but if your ... around Year 7, 8, if your recall patient-base does not exceed your new patient patient-base, that practice is in a lot of trouble and there are a lot of private practices, there are a lot of groups out there who aren't focusing on this, and this what they're seeing. You know, and it's concerning. A couple of the places I've work, you know, we would ... we started focusing on that and we would dive into individual practices or regions or States, and we would see patient retention, you know, in the sometimes twenties, thirties, sometimes teens, but, you know, the doctors are turning over and the doctors are upset and they're leaving or they're not making what they used to make three years ago, because you're not doing anything to get me new patients. You're not spending money on marketing. Well, why as an operator, do I want to spend a ton of money on marketing, when you're not doing anything to keep that patient in the practice. They're going out the back door faster than they're coming in the front door, so it doesn't make good business sense when I'm trying to run a good, profitable, healthy business, to continue to pump money into getting you new patients, when you're not doing a good job of keeping them.
Howard: Did you ever see the numbers like by the time an American is, say, 65, or by the time the average American dies, male is 74, female 79, how many dentists they've actually seen in their lifetime?
Kevin: I haven't, no, I haven't seen that.
Howard: I mean, I'm out here in Phoenix and this is October now, so, you start to have about 400,000 snowbirds coming down from Canada, North and South Dakota, this and that, and, you know, you ask these people, "Well, tell me about your dental history?" And they'll start to, I mean, they can't even remember all the dentists they've been to.
Kevin: Yeah.
Howard: And then all the dentists are like, "Well, you know, what I need? I need a new laser and I need a chairside mill and I need ..." Dude, dude, you only have a one in three treatment plan acceptance rate of a cavity! You know, why don't you fix ... why can't you get two out of three people to get the cavity have a filling? Four out of five people don't come back. Why don't you just piss off half the patients?
Kevin: Yeah.
Howard: If your office could commit to only pissing off half your entire practice, you'd be a millionaire. So, why do you think patients ... what are the low-hanging fruits ... what do you think the top reasons are they leave and don't come back?
Kevin: Well, it's money, it's perceived value, it's "You're not listening to my needs". I mean, how many offices, when you go in, you fill out the paperwork or you fill it out online, and it's, "Why are you here?" Or there's a lot of practices that don't even ask why you're there. Everyone just assumes they're just there for the exam, x-rays, checkup, and I'm just going to present to you everything that you need, when there might be a specific reason as to there. And I've worked with so many dentists in the past twelve, thirteen years, where a patient will come in essentially telling the front desk, "I'm here for this", you know, "My upper right area is killing me." And then the doctor will come in and see them - and again, this is not every doctor, but it's a lot of them - will come in and see them and say, "Yeah, yeah, I understand your upper right's hurting you, but, you know, down here you really need this root canal, you know, bridge." And that's great, and you might be able to do that if you do the upper right first. And, so, I think there's a lot of times when the doctor is more interested in what he or she wants to do versus what the patient wants to do. Because you're right. If every DSO or every practice - not even DSOs, just practices - if they could get 50 to 60 percent of their patients retained in the practice, that office will kill it. That DSO would kill it. Unfortunately, you just don't see, you don't see a lot of that. But to your point, every dentist you talk to - and I believe they're genuine when they're saying about the patients - I believe that's true for the majority of them, and I believe if you talk to a private practice owner or a DSO, anyone in the DSO, they would say the same thing. Unfortunately, oftentimes that just doesn't happen. The office and the doctor just - not just, but if they spent time focusing on how do we get this patient, how to make them a patient for life, genuinely how we make this patient come back. If you treated every patient like that's the only patient you're going to see today, I truly believe the practice, the DSO, the group, whatever, would kill it.
Howard: My Number 1 retention practice is, I have so many people chained up in the basement. I mean, I just can't hardly fit any more down there. But, if someone said to you - and, by the way, if they went to your website: thecdigroup.com, and I what I do is, I know my homies are commuting an hour to work. So, what I do is I re-tweet your last tweet. I've got ... I'm so lucky, I've got twenty ... I've got ... how many have I got following me? I've got 21,400 homies following me. Thanks, guys, for following me. That really is a huge honor. Your website, if you go to @howardfarrran.com, I just re-tweeted your @thecdigroup, and I re-tweeted. It says "Good value, growth opportunity needs. If your dental practice doesn't offer a discount dental plan, it should." You click that link, you go to thecdigroup.com, and you talk about four reasons you should offer a discount dental plan. Is that your main instrument that you are working on at CDI Group for patient retention, or is that just one of many? Is that your main focus?
Kevin: That's our ... patient retention ... well, inevitably, organically our services - and we know this from private practices to Great Expressions, Heartlands, PDS, Smile Brands, so on and so forth. We know, what we do is organically we grow patient base, so, we will grow your patient base. Now, we don't spend ... like, that's not our primary reason. We're not a marketing firm. We don't go out and say, "We're going to drive you a lot of new patients", but by having a discount plan - and if you're a DSO, a proprietary discount plan to you - it's going to organically drive new patients. It drives new patients, it dramatically increases production, and it dramatically increases retention.
Howard: Okay, so, drive new patients, and the third one was drive retention. What was the middle one?
Kevin: Increase production.
Howard: So, you think an in-office discount dental plan will drive new patients, increase production and increase retention?
Kevin: I know it will. And I know that based on eleven years that we've been doing this and the fact that in our network, in our group, we have thousands and thousands of doctors in offices working with us.
Howard: So, take it away. Tell my homies how this works. And furthermore, I want to tell my homies something. It is one thing when you sell individual dentists an in-office discount dental plan. But, do you know how hard it is to get the customers that he's got? I mean, you're doing this for the big boys.
Kevin: Yeah.
Howard: I mean, they're totally elite. It's like you might have a political opinion that year. You're the smartest guy in the room and you want to share, but good luck getting on Fox News, CNN, MSNBC. I mean, what you have to go through to be a talking head on there. So, I mean, so, I'm telling you that I called him, he didn't call me, but he's doing this for the biggest boys on the block. So, listen carefully. So, if they go to ... and, by the way, when you're doing those big accounts, do you just take an individual dentist from North Dakota?
Kevin: No, I mean, if it's a big account, like at Great Expressions they have approximately three hundred offices, so all their offices participate. We create a plan, one plan, but it's for all their offices, and we customize it. So, it could be a different fee schedule for each different State. We don't get down to the individual fee schedule and the individual plan for any individual practice.
Howard: No, but, I'm saying, if my homie's listening to you and he's just one dentist and one office, do you take accounts that small?
Kevin: Yeah. Yeah, we do. So, we have a product and a plan for them. It's different than the custom one for the DSO, but yeah, wherever you are, we have a discount plan for you. And, at the end of the day, to your point, yes, if we didn't do what I'm about to say we do, or what I said we do in terms of increased patients, production, services rendered, retention, these guys wouldn't stay with us.
Howard: Right.
Kevin: They're in it to provide good, quality care, but they're a for-profit business. So, if we didn't do what I say we do, we'd have lost them a long time ago. So, what we know is that the average cash patient will come in and the average cash patient - and we know this from all the groups, all the practices that we work with across the country, and we're in about forty three, forty four States, and on a quick side note, all of our plans are regulatory compliant, and that's not always the case for some of these discount plan products - but what we know is the average cash patient will come in, generally speaking, when there's an emergency, they'll spend the least adequate, you know, they'll get the least adequate restoration to get them out pain. So, they're not spending a whole lot of money and then, generally speaking, they don't come back. So, the average cash patient is probably going spend, you know, less, around $500 a year and they're going to retain in your practice less than 10 percent. We know that if we can get them onto a discount plan, they ... it is discount, it's not insurance, but the patient perceives it as insurance; "I now have 'insurance'", that's what they're thinking, and they're going to use it as such. So, when you don't have medical insurance, you probably don't go to the doctor. When you have medical insurance, you probably get a checkup every once in a while, you probably get a physical every once while. When something's bothering you, you're probably more apt to go use it as opposed to if something's bothering you and you don't have medical insurance - you're just going to wait and hope that it goes away. So, from a mental standpoint, a psychological standpoint, it works the same way. We know that once we get that cash patient onto a discount plan, their services rendered will increase anywhere from two to ... on average two to three times, and then their patient retention will increase anywhere from five to ten times that than if they stayed as just a cash patient. And I don't care if it's an individual private dentist or if it's a large group. You're going to have listeners thinking the same thing, "Well, why would I discount my patients when they're paying UCR?" Well, what I would say to that is, having been doing this as a company for over a decade, having groups, as you said the big boys all the way down to the, you know, a woman who owns her own practice, kind of in a rural area, most dentists don't get full UCR. If you're one of the very few people who are getting full UCR, kudos to you, you probably don't need our help. But the majority of dentists aren't getting UCR. So, they might be giving discounts, maybe 5, 10 percent. I've talked to a lot of dentists that'll say that, when I say, "What's your policy of cash patients?", they'll say, "I keep reducing it until the patient says, 'Yes'." Well, there's a whole lot of other problems with that in terms of if you accept any other insurance that can get you into, you know, hot water and trouble with the other insurance carriers because they negotiate their fees with you based on UCR. But if you are in a position where they're paying UCR, which most of them probably aren't, there's no way for you to know if they're coming back, or there's no way to say, maybe they're paying UCR for one composite filling, but maybe they have a root canal, they have three other crowns in their mouth, put them on a discount plan that's regulated, where we're working to get those patients also back in your office. That's why the patient retention increases, that's why production increases, because they're going to do a lot more work that you've diagnosed.
Howard: My deal is, let's start where I think this is the most huge. Let's start with the funnel that nobody talks about because they don't even have a measurement on it. They don't know what the conversion rate is on their website. I mean, when I was little, it was the Yellow Pages, or you asked someone at church, it was word-of-mouth before the Yellow Pages. Now, it's a damn smartphone.
Kevin: Sure.
Howard: And they're going and they're saying, 'dentists near me', Number 1 search, and then they land on your website. They don't realize that it takes about twenty people to land on the website before one converts and calls the office. And then they don't know that three people have to call the office, before your receptionist can convert one to come in and chair. So, when you just fix one patient, three had to come in, nine had to call, and nine times whatever, I mean, hundreds had to land. And what I've seen is that when you land on a website that, if you have a photo, you get about eleven times bigger reaction than if it's just your name. No-one knows who Howard Eugene Farran, DDS is, but a picture raises your conversion. But a YouTube video converts even higher. But what are the two main drivers? They are afraid of the dentist and they are afraid of the cost. And when your website says, "We have our own in-office dental plan. So, if you're afraid of the cost, please call Robert at 480 893 1223, and let him tell you about our in-office dental plan." And, I mean, that can take the conversion rate of the average office of 5 percent landing on the website convert to call. Add a YouTube video of the dentist for two minutes, just so they see who the dentist is. Now, he's gone from 5 percent to 10 percent conversion. Add a YouTube video of your financial arrangement office manager talking about this in-office dental insurance plan and now you've got a 20 percent conversion.
Kevin: Yeah, absolutely. I mean, more tools you can put into your toolbelt, the better. Why wouldn't you do this?
Howard: Yeah.
Kevin: So, I totally agree. And on top of that, again, I keep saying it, but there's a reason why we've had success. There's a reason why people are turning to us - because it works. If we didn't increase patients, if we didn't increase production, if we didn't increase retention, we wouldn't have the partners that we have, and we wouldn't be growing. And you talk about a website, I'll throw this out there just for what it's worth, for all the independent dentists out there.
Howard: My homies.
Kevin: Your homies. For your homies. This is from me to your homies. We have our own proprietary dental exchange. So, it's another avenue to help patients find them in their offices. So ...
Howard: What is a proprietary dental exchange?
Kevin: So, everyone has heard dentalplans.com. Our site is pickyourdentalplan.com.
Howard: So, pickyourdentalplan? Or plans?
Kevin: Correct.
Howard: pickyourdentalplan.com.
Howard: Correct. Correct. And the reason I throw that out there, and the reason we created this a few years ago, was because we would inevitably get the question from DSOs, "What are you doing to help drive us new patients?" Well, take a state like Texas, where we are partnered with Heartlands, Smile Brands, Great Expressions, MB2, PBS. You know, it's not fair. We can't say, hey, we're going to drive everyone to PBS offices, or MB2 offices. So, what we did is we created essentially a site where we're driving patients through, we're spending our marketing Dollars. We're driving patients through SEO to this site, where then patients can compare, contrast different plans. They can find different dental offices in the area. Only people that we are working with, only our partners get this, get to be on this site. So, it doesn't cost them anything. If they're one of our partners, we automatically do that, but it's another tool to help drive patients to their offices.
Howard: You know how I can prove to you what a nice guy I am?
Kevin: Yeah, how? Show me, please.
Howard: I just want to @pickyourdental and I'm following you, and re-tweeted you had all my twenty thousand followers - and you're not even following me!
Kevin: What do you know?!
Howard: My g*d, Ryan, Ryan, we've got to cancel the show right now. We're just going to erase the tape. How? I am so heartbroken! But, yeah, so, if you're driving: @pickyourdental.com. So, this is Dentistry Uncensored. Obviously, this is a free service, you run a charity, right?
Kevin: Yeah, yeah, great. We do this because we love dentists and we're a non-profit.
Howard: Just like when you watch the news, they're only there because they're so concerned about you. They want to inform you so bad. They're not selling commercials.
Kevin: No, Fox, CNN ...
Howard: They're not part of the traded media companies selling commercials, knowing that unless they just frikkin' p*ss you off and make you crazy, you're not going to stay tuned and listen to the commercials. So, what does this cost?
Kevin: So, we make our money through enrolment. So, for instance, if you don't have a plan today, if you do not offer patients a discount plan, and you're just wheeling and dealing and hoping that they say yes, but, to your point earlier, they don't have these tools to know if it's working or not, if patients are coming back, you truly have nothing to lose because if you didn't have a plan, you're not coming out-of-pocket to pay us anything. We make our money through enrolment. So, we provide the patient fulfillment, we provide all these services, we have a call center. But if you offer a discount plan that again, whatever State you are is regulatory compliant, so, you're not at risk. We take that risk on us, even in the State of California where we have a Knox-Keene license. We make our money through enrolment. All the increase in production, all the increase in services rendered and retention, we don't take a percentage of that. We only make our money through the enrolment fee.
Howard: And what is that? What is the enrolment fee? I mean, how much is that a month?
Kevin: It's, generally speaking, from a DSO to the private practice one, it can range anywhere from about on average approximately $60 per individual up to, you know, we have a plan that's $119 per family. For an individual private practice, I want to say, it's around $79, $80 per individual, maybe around a hundred for a couple, and ...
Howard: So, let's say it's $100 a month for a family, whatever.
Kevin: Not a month, not a month. One time.
Howard: Oh, one time?
Kevin: One time.
Howard: Oh, okay, so, explain this again. This is going right over my head. So, you make your money off the enrolment. So, you get the enrolment fee and the plan.
Kevin: Yes. Patient comes into your office. They're a cash patient. They need treatment. They can't afford the treatment you're providing. So, you offer them a discount plan that we administer. They pay, let's say, $100, or 129 to get their whole family on it, to have a discount dental plan for the year - that's exam, x-rays, [00:46:56] [sounds like: permitted] [0.1] diagnostics, so on and so forth. So, it's a one-time fee for a year. That's how we make our money. Then they come back, they come back to see you in three months, four months, six months, they do more work. All that production - that's yours. We don't touch that. We make our money through that one-time enrolment.
Howard: And is that only good for one year? So, in twelve months, you've got to ding him again for 129?
Kevin: Correct.
Howard: Well, wouldn't it be an easier plan to make it 129, just ding them per month, or 129 to join the plan and then the next year's $10 a month? I'm thinking like Spotify or Netflix. Like when I get my American Express bill, I get dinged every month for Netflix, Spotify, what's the other one - the music? Pandora. But these monthly, re-occurring, credit card renewal deals, is why you have gyms all over America, because the average person joins a gym, goes eight months, but they get to ding your credit card for forty months before Mr Unorganized is smart enough. I basically paid for Pandora and Spotify every month for years, and I don't even know how to listen to Spotify.
Kevin: Sure.
Howard: Some friend told me all about it. So, he was on my iPhone. He signed me up for it and then another friend signed me up for Spotify. Spotify and Pandora. I've never listened to either one.
Kevin: Sure.
Howard: But for the last five years, they've gotten $5 from Dr. Dumbass. And, so, I have heard that, you know, if you get them to a monthly credit card ding, that that's the golden business model, because even if they stop coming to your office, they'll still pay it for four years.
Kevin: And you're not incorrect. We have done that in the past. But, if I'm totally honest, at the end of the day patients don't really like that. So, we don't do it. We do it for one year, because we're an extension of you, whether you're a DSO or whether you're a private practice, and we never want to compromise that relationship between the office, the doctor and the patient. So, patients don't like that. So, we would rather get them to just renew on their own. So, we don't do the auto-renewal. And on a monthly basis, we used to have it so patients would pay on a monthly basis, even for the year. And we stopped doing it for two reasons. One, we didn't see that a patient paying $100 one time, upfront, for the year, or a patient paying $8 per month, or $8.25 per month for twelve months, there was no drop-off. If a patient was going to pay $100 they could do it. There was no drop-off in enrolment. And then, second, from an administrative standpoint, it's just a bigger pain in the butt. But in terms of their renewal, we offer, for our DSO partners, we offer a little bit more services than the independent dentists in terms of what we will do for them and retention, but we call patients ... for our DSO partners, we call, email and snail mail every patient before the end of the year to ensure that they come back to the office. So, we would rather be proactive and get them to want to come back versus ding them and make them upset. And our patient retention numbers are higher than some other groups out there that might do auto-renewal.
Howard: That's cool. And it does p*ss me off that I'm to unorganized to get off Spotify and Pandora. So, again, I want to talk about that funnel real quick. So, twenty people have to land on your site before you convert one to call, and I have never met a dentist on Planet Earth who can tell me their conversion. They don't even track it! If you don't measure it, you can't manage it. So, then we know three people have to call before your receptionist converts one to come in. Again, how do you get ... I know for a fact that one out of three Americans will never come in. So, you can't get three out of three. Just like I have patients that come in in wheelchairs with oxygen tubes in their nose, dying of emphysema and they're smoking outside my door.
Kevin: Sure.
Howard: I mean, people are crazy. I mean, all humans are wild, savage, sapiens with clothes on. So, one out of three people is never going to follow any doctor's advice on Earth, whether it be to just, you know, whatever. They're crazy. But one in three is the average, and in your zip code there's a dentist doing two out of three, getting to come in, but why can't they come in, because you don't have enough chairs. The doctor gets 35 percent of the costs, the staff get 25, the labs 10, supply 6, facilities 5, advertising 3, operatories don't even show up on your EBITDA, on your PnL, and what is the receptionist doing? She's looking for a chair. The dentists who have an emergency room chair, one or two, that no-one's ever scheduled in, so that the receptionist can always close the call saying, "Well, do you want to come on down right now?" And, I mean, so, get that conversion. So, when they do come in, I'm talking about a cavity on a bite wing x-ray, in a hundred million insurance claims, for every one hundred you diagnose, you only do thirty-eight. And again, that's one in three. You can get that to two in three. Now, my office, one of the reasons we can get that to two out of three, is because they say, "You know what? That's just so expensive. I don't think I can do it." And we'll say, "Well, you know what? We do have an in-office dental discount plan, and if you sign up for this, or whatever, whatever, instead of it costing you this much, it'll only cost this much." Well, that's a closer on all the big cases every time. I mean, obviously, if it's $500 or $900 or less ... I mean, I'm in Phoenix, Arizona, you know what I mean? And, I mean, Phoenix is a nice town and I'm in Phoenix. I'm not in Scottsdale, Paradise Valley and none of that stuff - I'm in Phoenix. It's a nice town and a sh*tload nicer than Denver or Tampa or that Orange County thing you lived in.
Kevin: Sure.
Howard: I mean, a nice town! But, man, when you're talking about big treatment plans, these discount plans, the conversion rate, it's ... I mean, I'll talk to my front desk people, Don and Robert, and they just say, "Man, it is the closer!" They call it 'the closer'.
Kevin: Yeah.
Howard: And now, you're listening to me out there, and you don't do this, and you
need to do it.
Kevin: Well, and I appreciate that, because everything you're saying is right. And it's not that we're getting these arbitrary ... anyone can ... if your UCR for a crown, let's say of $1,800, it's not like we're saying, "Hey, do this for crown for $400." You know, we've been doing this a long time, so, we have a pretty good feel for what is the dentist going to be happy with at the same time balancing out with what does the patient feel that they're going to open their wallet and give you a check or a credit card or whatever, because they feel like they're getting the value. So, we want that balance, but, so, for the DSOs again, we'll customize it to their specific offices, their provider mix, their whatever, their socio-economic demographic. For the independent private practice, you're really probably talking about ... there's a pretty steep cut on preventive and diagnostic. But that's not where you're making a ton of your money anyway. You know, where you're making your money is on major restorative, and you're probably talking, you know, 15, 20 percent of UCR. But it's enough that the patient will feel like there's perceived value, they'll spend the money, and it's better for you, it's good for you, the dentist, and it sure is a heck of a lot better than the patient saying, "No, I can't afford this", and then leaving.
Howard: Again, the dental industry tries to convince everybody that what patients want is a same-day crown or a laser or all this stuff like that. But being a [sounds like: wet glove] dentist for thirty years - I know you don't believe I've practiced for thirty years because I know you're all looking at me saying, "Dude, you don't even look like you're thirty! You look like you're twenty-one."
Kevin: Not even!
Howard: And I'm telling them, there's only two things that they want. They're afraid of getting a shot and they're afraid of getting the bill. And I'm telling these dentists, what you need to have more than anything is not a laser or a chairside milling, a CBCT, and all this garbage. You need to have an instant chairside manner and you could go to your local comedy club. They have comedy school lessons. It's like every Monday night for six weeks, because a stand-up comedian, when he walks out there on stage, he's got to connect with you in a minute or he's dead. They have those - what are those ... the shows where they give you a story - improv, an improv class, and you walk out there in front of people and they say, "Okay, buddy, you just came home from work, Kevin, and your wife is in the shower with your best friend." And then, you know, you got to act this out immediately. So, a chairside manner that makes people feel good, that's ... you're not condescending. You don't use five thousand words of Latin and Greek. You walk in there. You're running for mayor. You're a politician. You shake their hand. You press the flesh. You make them feel good. You explain what they need in simple terms. If someone needs a root canal, they need a root canal. You don't need to talk to them for an hour and a half and show them a videotape and give them extracted teeth and models and all that. At that point you're just weird. After you do that, now they're ... when you do give them a shot, at least once a day, one of your patients will say, "Damn, I didn't even feel that!" I mean, you gotta take the shot as serious - they'll remember that you hurt them, they won't remember anything else. Do they like you? You get twenty, thirty seconds to establish likeability. Did you hurt them? No. But after that, what's the only other thing they're afraid of? The bill! And you have to make everything you do faster, easier, higher quality, but lower price. And, again, in America, in the richest country in the world with a $17 trillion economy out of a $71 trillion global economy, if it costs over a $1,000 in the United States, nine times out of ten, they finance it. Credit card, payments, whatever. Only 10 percent, they buy homes and cars in cash. And what do you do with those idiots? You give them a senior citizen discount. As if they need it! They don't even have any debt. Then some poor lady comes in with three kids and you charge her retail. And, you know, there should be no senior citizen discounts until the United States is out of debt from paying all their social security and Medicare to the people who only voted in politicians who cut all the taxes. So, the bottom line is, you've got to make this affordable.
Kevin: Correct.
Howard: And when you set them down and explain this plan and explain how ... and the last thing I want to say about this is, I've lectured in five continents just this year with Ryan. I mean, I've lectured a thousand times, and countries like China, India, Brazil, nobody ever would ever think that the government or their boss should pay for their healthcare or their body, or whatever. They treat their body like you treat a house and a car. But in twenty countries, the United States, Canada, Western Europe, Australia, New Zealand, for some reason Americans buy their house, they buy their car, they buy their $1,000 iPhone, but when it comes to their own body, they won't become a customer unless someone else pays for it, because, I mean, it's my body. I mean, I shouldn't have to pay for my body. I'll buy a Camaro and a brand-new trailer, and I just bought a new $1,000 iPhone 10x, but, I mean, this is just my teeth and my body. Why should I have to be responsible or pay for it? So, you can't change people's views on this unless you just want to pick up and go to China. And like I've told these people, man, when you tell a Chinese dentist about dental insurance, their brain hurts!
Kevin: I'm sure.
Howard: They're like, "Okay, you eat chocolate bar and drink Coca-Cola. Why should your boss or the President pay for your root canal?!" "I know, dude." "So, you smoke cigarette for forty years. Why would your boss or government pay for a $100,000 by-pass?" And, in fact, Chinese dentists tell me they think it's a perverted incentive. They say decay is because you eat Mountain Dew and Funyuns.
Kevin: Yeah.
Howard: So, I don't want to subsidize your bad decisions. Just like insurance companies, car insurance companies, shouldn't give discounts to people who total their car every year and get DUIs. And they're just like, "No, no, no! You shouldn't cover a by-pass, and emphysema, and dental decay, because that will subsidize that behavior that led to those diseases." So, all that doesn't even matter. What matters is what tribe do you live in, and if you live in the United States, Canada, Western Europe, or wherever, consumers don't buy unless they have dental insurance or medical benefits. And it makes no logic just like almost everything you're told doesn't make logic anyway. I love it when you hear the environmentalists on YouTube and she's saving the planet because she's recycling her garbage, yet she has six kids.
Kevin: Sure.
Howard: The biggest pollutant on earth is a child. Don't tell me you're an environmentalist and then go out and have a kid or two or three or four or five or six.
Kevin: Sure.
Howard: If you're an environmentalist, don't have any more kids. If you're an environmentalist, cows farting cause more methane in the air than your car, so don't drive to McDonald's and eat beef and tell me you're an environment. So, almost everything people say is somewhere between batshit crazy and insanity, okay.
Kevin: Yup.
Howard: That's why I have to do this podcast, because I'm the only normal person on Earth, okay.
Kevin: Preach it!
Howard: But I'm telling you, if you're in America, Canada, Western Europe, Australia, New Zealand, you've got to have a dental plan, because they won't buy unless they have a plan. It's just the way it is. You're not going to change it unless you move to Singapore, China, you basically got to move to Asia, Africa or South America.
Kevin: Sure.
Howard: And if you're not going to move, your customer isn't going to click until they've got a dental insurance plan. My last question is: you know, I know the disease is TMD, temporomandibular disorder, but the patients only know it as TMJ. The insane endodontists keep calling it endodontic therapy, when nobody knows what that means. They just know what a root canal is.
Kevin: Sure.
Howard: Nobody knows what a dental discount plan is. Can on my website just say, "Yeah, we have our own in-office dental insurance plan", or is that going to get me in trouble?
Kevin: Yeah, it's going to get you in trouble, again, because there might be some, you know, fly-by-night plans out there, but we want to eliminate the risk to you. So, it's not insurance, and we, because from a regulatory compliance standpoint it's not insurance, the patients are going to view it as such. It's not insurance though, so.
Howard: I know it's not insurance, but they ... I'm not going to ...
Kevin: Yeah, but you couldn't advertise that it on your website. You can say, we offer a dental plan.
Howard: That's what you say? We offer a dental plan.
Kevin: Yeah.
Howard: So, my final deal is, dude, move to Asia, Africa or South America, or get an in-office dental plan.
Kevin: Yes.
Howard: Yeah. And, dude, you are a legend in my mind, you are a legend in a lot of the CEOs I know who have these big DSOs. When I called you, you didn't even know who the hell I was. It was an honor for you to come on the program. It was a complete honor to podcast interview you. Thank you so much for coming on the show today and talking to my homies.
Kevin: Well, I appreciate that. You've been wonderful. I've followed you. You said in the beginning, I went to your Dental MBA In A Day class a long time ago. I learned a tremendous amount. It's a pleasure. I appreciate you allowing me the time spent with you.
Howard: Alright, buddy, hope you have a rocking hot day and Go, Broncos!
Kevin: That's right. Why not? Go, Broncos!