Dentistry Uncensored with Howard Farran
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1038 Innovating Technologies with Dr. Bruce Lieberthal, Chief Innovation Officer at Henry Schein, Inc. : Dentistry Uncensored with Howard Farran

1038 Innovating Technologies with Dr. Bruce Lieberthal, Chief Innovation Officer at Henry Schein, Inc. : Dentistry Uncensored with Howard Farran

5/31/2018 7:28:12 AM   |   Comments: 0   |   Views: 328

1038 Innovating Technologies with Dr. Bruce Lieberthal, Chief Innovation Officer at Henry Schein, Inc. : Dentistry Uncensored with Howard Farran

Bruce serves as the Chief Innovation Officer for Henry Schein, Inc., reporting to Jim Harding, Henry Schein’s Global CTO.  Previously, from 2009 until this year, he was the Vice President, Emerging Technologies for Henry Schein, Inc., reporting to the president of Schein’s Global Practice Solutions Group. Bruce also has oversight responsibility for Henry Schein Medical Systems (MicroMD) and the DDX business.  He led the ConnectDental team for 2 years and currently works closely with the Corporate Business Development Group advising them on technology opportunities.  He started, at Henry Schein, as the Director of Product Management to the leadership team in Utah when Discus Dental Software was acquired by HSI in May 2007 and was promoted, in 2008, to Vice-President of Product Management and Development, managing all of HSPS’ software lines and development teams.  Bruce was the founder of Direct Vision Software, the General Manager of Discus Dental Software and has been a leader in dental technology for more than 30 years.  He practiced dentistry for 14 years between 1984 and 1997, and brings much knowledge to the Henry Schein team.

https://www.henryschein.com/



VIDEO - DUwHF #1038 - Bruce Lieberthal





AUDIO - DUwHF #1038 - Bruce Lieberthal



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1038 Innovating Technologies with Dr. Bruce Lieberthal, Chief Innovation Officer at Henry Schein, Inc. : Dentistry Uncensored with Howard Farran


Howard: It's just a huge, huge honor for me today to be podcast interviewing my buddy, Bruce Lieberthal. Previously from 2009 until this year, he was the vice president of Emerging Technologies for Henry Schein reporting to the president of Schein's Global Practice Solutions Group. Bruce has also oversight responsibility for Henry Schein medical system and the DDX business. He led the ConnectDental team for two years and currently works closely with the Corporate Business Development Group advising them on technology opportunities. He started at Henry Schein as a director of product management to the leadership team in Utah when Discus Dental Software was acquired by HSI. Man, that's going back a ways, I can still remember. Where were they at in southern California? 


Bruce: They were in Culver city and I for a short time actually lived out there in Calabasas is where I live, but they were in Culver City.

 

Howard: Culver City and remember [inaudible 00:00:57] from back those days.

 

Bruce: Oh, sure. 


Howard: Steve [Seblemeyer? 00:01:02] and he went onto Denmat. Is he still ...


Bruce: Yes, but I proceed Steve. Steve came in sort of towards the end when the company was being sold. My history is, I joined Discus in 2000, I'm sorry, 1999 they acquired the company that I started here in Boston and worked under Robert Heyman who was the founder or co-founder with Bill Dorfman  from 1999 to 2007 when we were sold to Henry Schein and it was after 2007 that the rest of Discus was sold to Phillips and then partly to Denmat and you know the story.


Howard: Man, we're getting old dude. 


Bruce: We are.


Howard: But that's great because everyone listening to us is a young millennial, a quarter of them are in dental kindergarten still and the rest just recent grads are all under thirty, so I think the reason it shows success is because we can get old guys like me and you to talk about the past. But you were also the founder of Direct Vision software. The general manager of Discus Dental Software and has been a leader in dental technology for more than thirty years. He practiced dentistry for fourteen years, between '84 and '97 and brings much knowledge to the Henry Schein team. And again, I just love Stan Bergman. I love the CEO Stan Bergman. I love him to death. And the other thing is he reminds me of the guy that runs Cisco. What's his name? Charmer is it ... John Chambers.

 

Bruce: Yes, that's right, that's exactly right. Yep, yeah and we share by the way that admiration. 


Howard: And the reason it reminds me of is because Cisco had one of the most profound ... him and Intel, which was, oh who's the founder of Intel, who wrote "Only the Paranoid Survive," Andy Grove.


Bruce: Andy Grove.


Howard: We both said something that when I heard it the first time I thought these guys were idiots and they proved to me that I was the idiot, and that is, they didn't like R and D departments because they said when a company has an R and D department, are you really going to hire the smartest guy in the world to develop this technology? So they both had this theory called 10X. So when a new technology came out, there'll be a bunch of players in the field and they'd be trudging along quarter after quarter, then one, whatever, 10X breakthrough, and when they get the 10X breakthrough that was their R and D they would go buy that company. And Chambers, I think Stan Bergman of Henry Schein has bought, what, thirty-six companies?


Bruce: Oh more than that. 


Howard: And same thing with John Chambers, but what's cool about it is they buy the companies, the founder stays on. It's not like DSO's where they'll go buy a dentist's dental office and they say he has to work there three years and three years and one minute he quits. I mean they buy these companies and those founders stay on forever and a day and there's just almost, I mean it's just a brilliant strategy. Cisco says we couldn't have invented all the stuff that we have in-house. We just see who's the smartest guy in that sector and then we go buy the top dollar. We just go there, get out our checkbook and say, okay, you won. We want you on the team and you can stay in your own city, you can run your own show. We just want it all to integrate with Cisco. Pretty genius. So how many companies has Stan bought to date? 


Bruce: So I don't know the exact number, but I can tell you at Henry we have hundreds of P&L’s and hundreds of divisions scattered all over the world. We're the largest dental health company on the planet and we do pretty well in medical as well. I think we're the second largest ambulatory medical company in the world. Their strategy is very similar to what you say. They tend to acquire companies, but not completely or at least in the beginning and it's a very smart strategy because we're a company that likes to fashion ourselves as not being too arrogant. If you acquire a company and you provide an exit for the founders immediately, the guys who made it great are now gone and so that's how many of Henry Schein senior leadership tends to get to the company and then they sort of rise through the ranks and move around. That's certainly my story where I was just a dentist here in Boston and created the software back in the '80's and through a lot of twists and turns ended up here and because of Stan and other people's confidence, I have this what I would tell you, Howard, is the dream job, which is I get to talk to geniuses all day long and see if I can map them to Henry Schein's portfolio, which is a pretty, pretty cool thing to be able to do.


Howard: Well, take us back us back to your journey. You were a dentist in Boston, what was your first technology thing and what did you build and how did that get acquired by Henry Schein? Talk us back through your journey? 


Bruce: Yeah, so I was a graduate of the State University of New York and after a residency, came here to Boston partially because at the time in the '80's you know again, I'm dating both you and me, in the '80's there was only really two places where the computer business, small computer business existed and that was here in Boston and obviously Silicon Valley. And I came here and participated in a lot of technology creation, made my own software, practiced software in the early days and when I mean early days, I mean I started before there was even DOS, windows was a long way off and there were very few of us in the business. There was no place to buy computers. There was nobody to teach you how to write software so basically I sort of taught myself and inflicted my software on a couple of friends of mine who were dentists and eventually the software went from being working occasionally to pretty stable and I'm skipping a lot of steps here in the interest of time, but in the late '90's we went for and received the endorsement of the American Association of Endodontists to write software specifically for that particular specialty. Nobody had done that before and we came in sort of as the dark horse because all of the big guys in the business at the time were also vying for the opportunity. We came in, we got it and pretty much exactly at the same time I was negotiating an acquisition of my company by Discus Dental. It became real and I will tell you that the endorsement by the AAE was part of the reason for me selling the company because I needed to quickly go national and at the time I had a very small group of very agile, very aggressive people working for me. But we certainly didn't have the capital to take a piece of software nationally and that was a requirement so we joined Discus and did the AAE thing at the same time in 2002 we also got the endorsement of the American Association of Oral Maxillofacial Surgeons. It was a similar kind of process, we still enjoy that today and we work very closely. So what I ended up doing, Howard, because there were very large companies in the business and I thought it's not the smart thing to try to with a small company like I had to try to go head to head with the Eaglesoft’s and the Dentrix's and at the time Easy Dental was a big player. Soft dent was a huge player at the time, Practice works and so on, so what we ended up doing was writing software for two groups. One was specialties and we have a whole group of products that serve the specialties and enterprise. Nobody was really at the time writing software for huge corporate practices and that became, other than QSI, and that became really our specialty, being able to connect hundreds of practices from thousands of workstations concurrently became what we specialized in. So that whole business grew up at Discus from 1999 to 2007 and then when Discus was sold to Phillips and then pieces were broken off and went to Denmat. 


Howard: It was very interesting because I watched when I got out of school in 87 the biggest boy on the block was Healthcare. Remember, no Healthco out of Dallas. Remember Healthco?

 

Bruce: So Healthco was actually here out of Boston and it was a Boston based company and the way I got into practice originally was I was just this guy who had come to Boston from New York, which is where I grew up and when it was time to own my practice, went to the people at Healthco and said, because they did what Henry Schein does a lot of now, which is practice transitions. In fact, some of the practice transitions people when health broke up when was that in the '90's sometime, right? 


Howard: Yeah.


Bruce: Came to Henry Schein and helped run the practice transition group here now. But yeah, I got to know the Healthco people very well. They were ...


Howard: So at that time when you met him in the '80's was Healthco bigger than Schein? 


Bruce: Healthco was the largest dental distributor in the world at the time, yeah.


Howard: Yeah and then so they crumbled apart and then Pete [Firshet? 00:11:30] first shot rolled up a bunch of suppliers with Patterson and Stan Bergman did it with Schein, but it's very interesting. Pete [Firshet? 00:11:36] used to always say there's so much money in the United States. I'm not going to go overseas or I'm not going to leave the country. They eventually added Canada, which really isn't going far since 90% of Canada's population lives within one hundred miles of the US border. But Stan was going all around Australia and Europe and New Zealand and Pete [Firshet? 00:11:56] had no interest in that. I wonder and it looks like your strategy was better. 


Bruce: Well, you know we service huge preponderance of the dental market here in the States and overseas. The group of people and I'm not one of them, but the group of people at Henry Schein who work in business development with Stan and do these acquisitions, have a formula. They know exactly what they're doing and I think the proof of that is how rarely you ever hear of a Henry Schein acquisition not working out. It's extremely rare. I can't even give you an example even if I were pressed to do one. They do tend to have a process that absolutely works. 


Howard: Right. That's why I opened the show saying that as Stan Bergman and John Chambers of Cisco, I mean they're two twins. They're two peas in the same pod. Same thing with Cisco they just have a great acquisition deal. They keep the top talent, they let them remain independent, they let them live where they built the company and you've got a bunch of employees that have been there in ten, twenty, thirty years, why do you want to move them all to Melville, New York. By the way, where is Melville? I've been there a couple times. How far away is that from Manhattan? 


Bruce: So Melville is about thirty miles from midtown. It's exactly mid-island right next to Huntington, Syosset, Jericho. If you know those areas, if you know Long Island at all, it's smack in the middle of the island and right off the LIE, the Long Island Expressway, so yeah, that's where it. But the other thing I would mention about Stan and it's not because we're being recorded here, Howard, that I think bears mentioning is not only has Henry Schein been on Fortune's most admired companies, something like seventeen years in a row, I think we're six or seven years in a row Considered the most ethical company or one of the most ethical companies in healthcare. And this is a big deal to stand so the process of doing well by doing good, if I have the order of that expression correctly comes from the top. It is driven down through every Henry Schein employee, which we call ourselves team Schein members or TSM's. He truly is a remarkable human being in that he's a brilliant businessman, obviously, and a remarkable human being who really has a great heart and utilizes Henry Schein's power all over the world to do really good things. 


Howard: I got to tell you my Stan Bergman story. So one of the reasons I love Stan so much is not only is he a great guy and all that stuff, I mean born and raised in South Africa. Twice in my life I've gone on some missionary dental trip where you fly in some place, get in a car and you're out in the middle of nowhere and all of a sudden you walk into this dental office that's as nice as mine in Phoenix and you're like, whoa, where did this come from? And there it is Henry Schein and you know he didn't even have his name on. So I was in Africa and I tell these kids, it was an orphanage, and I tell these kids that my friend, Stan, built this and on my phone I want to record a video and I want you to say thank you for building this dental office to my friend Stan and I got like forty/fifty orphans all out there and they're all probably, I don't know, four or five and I said, okay, say thank you. And they all started singing "happy birthday to you," so obviously my English wasn't that good or my Tanzanian wasn't as good as their English, but anyway, it was the most adorable video. But it's on YouTube if you search all these kids singing Happy Birthday. Can you find that "happy ...


Bruce: I will, I'll go look for it.


Howard: Yeah, that was crazy. So this is dentistry uncensored, so I don't want to talk about anything anyone agrees on. Here's what you're up against. These kids are coming out of school two hundred and fifty thousand in debt, three hundred and fifty thousand. I was at AT Still up the street Mesa about a month ago on a Sunday and there was one kid, $400,000 in debt. So when they come out of school and you start talking about technology, I mean a cad cam that's a buck fifty, a CBCT it's another buck. There's millennium lasers out there that go from seventy five to a hundred and thirty five and a lot of these kids they say what do I have to have to build a great office to pay back my student loans and they're skittish about coming out of school and after three purchases of a cad cam, CBCT, and a laser, they just doubled their student loan debt. What would you say to those kids scared of their [inaudible 00:16:43]


Bruce: You're making me think back in my history again and one of the great things that I had when I, again, Henry Schein was a tiny company I think at the time. When I was starting a practice, Healthco was the company. I was lucky enough to hook up with a couple of execs at Healthco who took me by the hand because I knew I knew absolutely nothing about how to set up a dental office or what it costs or what to do with it once I had it. I think one of the great things about our company is it takes its mission really, really seriously. The mission is not just to jam as much merchandise and equipment to a practice as possible or have them spend as much money as possible we actually do believe what we say, which is that we want long-term success for that practice. And so I think what I would say to these youngsters coming out of school is make sure that you have the right advice. You know you spent your four years in dental school and the four years before that an undergraduate, not really learning how to run a business and although you may have good hands and you're doing good dentistry and you're doing a good service. It doesn't mean you know what you're doing in terms of setting up a practice and running it well, and I think one of the key things that I've watched at Henry Schein, and it is absolutely the truth, is that our sales teams and everybody else around that practice are truly invested in that practice's success. And so long term we have a bunch of tools some of them are [inaudible 00:18:28], some of them not where we go to those practices and we work with them and we look very deeply at their operations and the recommendations we make are recommendations that will help them grow. And I think the reason people continuously are loyal to Henry Schein is largely what we just talked about, which is that we're very invested in their success and I think we've through Henry Schein dental, which is you know the dental group that takes care of North America, these guys I mean our sales teams go through basically a university experience training on how to help a dental practice be successful. They also get to know the dentist and the staff very, very well and personally and I think the relationships that form between the doctors, the team and our sales teams and our management is really kind of a beautiful thing and it is a big part of Henry Schein success. And so the advice, in a nutshell, is make sure to work with a company that you think has your best interests at heart and will help you. 


Howard: Again, I want you to give a parenting advice to these kids. Pretend this little girl was your daughter and she just graduated. She's twenty-five, she's $350,000 in debt. You work in Melville close to Manhattan where NYU has graduated 7% of all the dentists in America. You live in Boston, they got two dental schools. Do demographics matter?


Bruce: So, Howard, I don't spend a lot of my time actually doing this part of the business, but again I can just give you my perspective as a former practicing dentist and somebody who works here at Henry Schein, they matter but what matters more is who you are because at the end of the day, you know and I know what patients want. They want to think that they're being treated by a dentist who knows what they're doing, keeps up on what they're doing and cares for them. Those are the things I think that drive patient loyalty. The more patient loyalty you have, the faster your practice is going to grow and so on so I think focus on doing the right things, which is [being? 00:21:00] good at your craft, listening to people, keep your education sharp, and treat your patients as if they are your family and I think the rest will probably take care of itself. 


Howard: Yeah, be good at your craft, listen to your customer, learn and have those family values. What technology are you, I mean, you're basically a technology guru. What technology are you most passionate about that these kids should be focusing on? 


Bruce: Well, so in my job, so let me say this first and then I'll go onto your question. The Innovation Group here at Henry Schein is partially focused on technology and partially focused on things that you would not consider, at least IT technology. What we mean innovation we mean things that are edgy and new that may or may not be technological advances. They may be advances in infection control or other types of things, early diagnostics for cancer and diabetes and so on and so forth, but the types of technologies that we're looking at in the innovation group, and there are other groups at Henry Schein looking at other types of technologies, are things really at the edge. Where we can take our time and find young companies that are pre-revenue or early revenue and help marry them to the Henry Schein machine. The beautiful thing that we can do with innovation is we can find who are the geniuses out there who are creating the newest stuff and marry them to a machine like Henry Schein that can make people aware of it and get people using it. So we work a lot with, I mean I can just sort of name a bunch of technologies we're working on. We work a lot with natural language processing tools. There's a lot going on in those areas, wearables.


Howard: What you just say, natural languages?


Bruce: Sorry, natural language processing, which is a geeky term for technologies that where for instance, Alexa is a natural language processing tool, not the right one for us here at Henry Schein, but so tools that will help understand language and not only understand language but do it in a way that, for instance, our cars cannot. So everybody gets frustrated you know they talk to their car and it could barely understand them. What we're looking for are natural language processing tools that understand the context of what the customer wants and can help the customer get to what they want quickly. So an example might be, for instance, people call software support lines all the time, right, so we have tens of thousands of users of our practice software. If we could figure out, for instance, that a large percentage of customers who call may be asking a question a different way, but they're basically asking the same question and we can have computers help them through the process of getting to the right answer, then think about what we've accomplished with natural language processing, which is there's is no queue so they never have to wait. We're never closed it's twenty-four seven and we can get them the answers they need very quickly. So natural language processing is computers that understand language and that by the way can be voice or it can be text so we are looking very carefully at systems like that. We're looking very carefully at clinical systems like 3D imaging and holography. Robotics is going to become very big in dentistry very, very soon. We've seen a number of early prototypes of devices that use robotics that are absolutely brilliant. Wearables are really important. We've introduced a few different wearables already. Things that help the dentist get through their day to things like smart toothbrushes, remote patient monitoring tools which are, as you probably know, tools or devices that patients bring home with them that can talk back to the dentist or the doctor and trigger alerts to loved ones and so on if something is going wrong. Clinical decision support systems are another thing that we looked at very carefully. These are software tools that help dentists, physicians, veterinarians get to a diagnosis much, much faster. Another big area, not IT related most of the time, is there's been a huge amount of research advance, successful advance in infection control and prevention. So for instance, chemistry's that are completely green where when you're done with them, you can just pour them down the drain, which is not true, right, of let's say, cold sterile solutions that we use today, but infection control that has no sensitivity to like antibiotic sensitivities where they stopped working because there's resistance. So we're looking at infection control and prevention tools that will really help the doctors, the hospitals, veterinarian offices control some bugs that are highly resistant and that's real exciting to us. Cybersecurity, HIPAA compliance. It's a big one, right? There's so many rules for the doctors today. First of all, their computers are vulnerable because of a number of reasons. We're helping them make sure those systems are less vulnerable and then when it comes to compliance with rules like HIPAA and related patient rules, privacy rules, we have tools to help them do that. And then there are some coming technologies that will become very, very important very soon and because we're the innovation group, we're looking at it earlier than there's a market for it and so one example of that would be really coming on slot of artificial intelligence and other types of systems. We hear a lot about Bitcoin because it's in the news a lot and depending on who you are, you either like it or you don't like it, but the technology behind Bitcoin is what we're interested in, not Bitcoin as a cyber currency, but blockchain, which is the technology behind Bitcoin. You will hear people, I'm one of them, who think that block-chain is as important as the Internet was in the '90's and the early 2000's. These kinds of technologies we need to understand early and work with the developers of those technologies so that again we can marry them to the Henry Schein machine and get them out there. 


Howard: So there's a Bitcoin called Dentacoin out of the Netherlands. Are you familiar with that guy? The programmers what was Russia's Silicon Valley. When the USSR fell apart one of the country's all the high tech stuff. 


Bruce: Well, Ukraine is very big.


Howard: Find out where Dentacoin ... go to Linkedin, Dentacoin, I forgot. But anyway so the owners in the Netherlands, but the people writing the blockchain are in an old USSR country I forgot, but what do you think of Dentacoin?


Bruce: So I don't know a lot about Dentacoin. We've begun to read about it like in the last two weeks, Howard, so I don't know that I would offer an opinion on it too much at this point, but in general, what Dentacoin is doing is in a sense what Bitcoin is doing. It's a cyber currency and I think we're entering an age now where that will start to achieve some level of maturity. If you read about blockchain and how incredible this technology is it's almost unhackable or maybe is completely unhackable. It's very democratic. It's not controlled by any particular individual and it's, other than being completely secure, it also is smart. And so processes, not just cyber currency processes, but all kinds of processes, for instance, interoperability, finally that's been promised in EMR's. For how many years have we been hearing about interoperability as a promise, but not as a delivered promise? Blockchain has the ability to actually deliver on that promise and help patients by having their patient records exist in a place where they can be accessed securely but widely distributed to those who need to see it. And of course, that leads to all kinds of good things, which is that if patients records are in the right hands at the right time that saves lives and helps to make people healthier. This particular technology is huge and we'll be hearing a lot more about it I think in the coming years. I read something the other day I think that something like over 20% of the major financial institutions in the world either have blockchain deployed or are testing it today. It's a big deal. 


Howard: I think you're right. The owners are in the Netherlands, but it's Bulgaria. Bulgaria was the Soviet Union's high-tech deal. If you were the smartest guy on the Soviet team you were a Bulgarian. If you thought you were really smart and you weren't in Bulgaria, a lot of people wonder if you're really smart. You said Alexa, you made a deal about your voice technology and that was Amazon. That's another big question, Amazon had a booth at the Greater New York meeting. What is your thoughts about Amazon getting into dental supplies? 


Bruce: Well, so my first thought about Amazon, which I think is just so interesting, is think about what Amazon has done just to the healthcare stock sector by talking about things that they might do, but haven't. It just shows you how emotional the investment community can actually be. What will Amazon do in healthcare? I don't know that anybody other than they can really tell you. When it comes to dental, this is just my perspective and I think it's pretty closely aligned with Henry Schein's perspective, if you're in the business like we are, distribution meaning getting a particular item from point A to point B, they're not going to do it a lot quicker than we are. Something like 94% of our orders are delivered overnight. How much faster are you're going to get it there than that and I think more than 99% of our orders are delivered in two days or less. So it's not just a matter of efficiency of being able to deliver a cotton roll and that is that we have a relationship with our customers. There's a lot more to being in our business than just shipping boxes and getting supplies from point A to point B. We provide their software, we work with them to build their practices. We have all kinds of educational tools, practice transition tools. We have our own financing arm in the company. There's a lot to making a dentist successful, lot more than just being able to deliver goods and in mass quantities and again, returning to the point I just made, how much more efficiently can you get supplies to customers than we have done already. And when it comes to same-day delivery and so on that's where my group comes into play without breaching an NDA that we have in place we are studying other ways of delivering the supply chain, including UAVs or drones and so on, which are not yet legal in the United States, but we are certainly in the hunt to look at advanced technologies such as that. 


Howard: Well you know it seems like the greatest advantage for me being fifty-five is you seldom see anything new. I mean it's the same rodeo you saw ten years, twenty years. I remember the last Internet bubble from '94 to 2000 all these companies with no earnings. I mean Jeff Bezos, Amazon and Elon Musk, Tesla I mean they have no earnings and he's the richest guy in the world at $105,000,000,000 and he doesn't have earnings. And the other thing I got out of high school in 1980 interest rates were 21%, had double-digit inflation and unemployment and then I graduated in '87 and black Monday was four months after I graduated. Then you had the March 2000 Internet meltdown, then you had the 2008 meltdown and I'm looking at, okay, we haven't had a meltdown in a decade. I've never seen that happen in my life ever once and two of the highest stocks trading, have no earnings you know Amazon and Tesla. But you know what Henry Schein and I have in common is the technology changed from the telegraph to the telephone to the Internet, but the talking monkey didn't change. And I remember when Edison those guys came out with the telegraph and the telephone, they said that the only two things they could think that it'd be used for is carrying symphonies and news into the inner country masses and 99% of the market turned out to be, "Hey, buddy what up." And when I started Dentaltown twenty years ago, the five C's of the Internet, they said it could sell commerce, like Amazon it could sell commercials, content, connectivity with all your devices but community, and we chose not to sell supplies to monetize the site because everybody said the same thing. That rep is my connection to the outside world and with Dentaltown the whole tagline was with dentaltown.com, "no dentist will ever have to practice solo again." So here it is twenty years later and they could have a drone deliver their gauze, but when that lady walks in and you know she doesn't do root canals, but she knows what endo file your favorite Endodontist is using and she knows what impression material your favorite fellow in the AACD is using. I mean she's part of that world and a lot of times I'll ask her a question and she'll say, "Well, you know, we're all having drinks at the Sandbar next Thursday night. There's going to be five dentists there." And I'm like, "Well, who's going?" And they'll start naming all my alcoholic friends and so it's that connectivity to the outside world. I had the head of dental from 3M on, he stopped by the house just a couple of weeks ago and did a podcast, and I asked him about Amazon and he said, "You know, what's weird," he says, "none of our customers are asking us about that. No one's asking." So supply and demand, no one's asking. Another thing I picked up on lecturing around the world as you said with your machine learning there's no queue, Americans don't know what queue means. They never say that. That's a British term.


Bruce: Yeah, line.


Howard: You had to do time in the United Kingdom to have that word. What's your UK background? 


Bruce: Well, I don't have any, but when I used to run a software company, we used to look at the phone queues, which are about the time people wait before somebody actually gets to them and I think in the early days when the software companies were growing very, very, very fast it also grows the amount of support people support inbounds that you get enormously and sometimes those phone queues, the phone, the wait time could be an hour. Some people sitting on hold for an hour to get sometimes a pretty simple question asked. Now we do a lot better now. We have all kinds of metrics that we study to make sure that we keep those lines down, but you'll never, if we were able to use artificial intelligence and a term you just used it that I haven't yet, which is machine learning, which goes right along with it, then we can deliver a lot of services at Henry Schein that we're not delivering today using the same example that I used before, which was using natural language processing for support queues. They're open all the time, nobody has to wait, but you have to have intelligence associated with those queues. In other words, the system has to understand what the customer is asking and the really good software and the software that we're working on will not only understand what the person is asking, they'll understand the person's mood because if people start to get annoyed, you want to get them to a real person and so these systems are very, very smart and they also have what you were just referring to, which is machine learning, which is that the software can self improve itself. The programming of the software can get tighter and the algorithms can get better and better and better with more and more use. This is one of the things that Tesla uses all the time with respect to their autonomous vehicles. There are millions of Tesla's on the road right now, every single one of them is sending data every single day back to Tesla and then they use that to improve the software and re-upload it to those cars constantly. And so, we're looking at systems just like that to improve the customer experience with Henry Schein and I don't mean just software support, I mean if you just call Henry Schein and you have a question or you need to get an answer or you want to find out where you can get education on something or information about a product, a number of different things, these systems will allow us to serve our customers better. And so in the innovation group, the technologies that we're looking at in this particular area are all aimed at how do we improve the customer experience with Henry Schein so that people want to do business with us, not that they have to, but they want to.


Howard: You know line queuing theory is interesting. It's amazing how even some of the biggest companies get it wrong. Like you guys are obsessed with wait times on calling customers [inaudible 00:41:03], but the least stressful line is at a bank or at Disneyland where it's one line and then at the end, you get to go to the next available teller. And that's how they do it at Wendy's, at Disneyland everywhere, but McDonald's is the only major company that's still you create stress because you wonder which line to get in and everybody always thinks that they always pick the slowest and then that causes anxiety. So again, and then look at this line queuing theory these dentists always have two assistants and then there's only one girl answering the phone and she's putting people on hold. People got off the hold, she doesn't know who they were, she doesn't have their number tracks. She can't call back and so many offices have doubled their sales, it's like Domino's pizza. If you answered twice as many phone calls at Domino's pizza, what would happen to your pizza sales? 


Bruce: You'd have twice ... 


Howard: So instead of being open 8:00 to 5:00 and you're closed from 12:00 to 1:00 for lunch, they'll sit there and have one assistant start at 6:00 in the morning and take lunch 11:00 to 12:00 and then the other assistant comes in at 9:00 and stays till 6:00 and you start doing that in a dental office where twice as many phone calls are answered on time by a human, and guess what? Twice as many people are getting cleanings, exams, and x rays and you go to any of these dentists to say how many of your calls came in when you were closed? They don't know. How many of your calls that came in went to voicemail? They don't know. How many of your calls that went to voicemail wherever even listened to, let alone returned? And so the dentist is fixated on the dental surgery. She spends her whole life in an operatory, a surgery, but you're a dentist and a businessman and you know how many root canals, fillings, and crowns are falling through the cracks because of line queuing theory on their incoming phone line and then the other thing, Google SEO, well, if you don't open till 8:00 and someone's searching dentists near me at 7:00, Google's not going to send you to a closed dental office, there's one open across the street. But what you do is when you start answering the phones from 6:00 am to 6:00 pm, Monday through Thursday you're getting all the SEO traffic. I mean everybody else opens up 8:00. Like if I Google Chase Bank, the one next to me has bankers hours, but once their bankers hours are closed when I put Chase near me, it sends me to the grocery store which has a little Chase Center in there which has expanded hours. So I can intuitively see myself that hours matter and the dentist doesn't have to be back there cooking the Domino's pizza, I still think they can just do that thirty-two hours a week, but I think if they start answering the phone sixty hours a week, they're going to have twice as much business.  


Bruce: I think if I might, you're making a really good point and it might not be the central point that you were just trying to make, but this is a big thing here for us at the company. We don't sell technology just for the sake of selling technology. We're selling technology because that technology is integrated into the practice in a way where it will improve the practice's operations, and then our job is to have people at the company who can explain that technology and even if you take it a step beyond that and so Howard you and I both watched dentistry become digital during our careers. You and I learned the same way. We used rubber base or impregum or some other goo to ... 


Howard: What was the heated green goo, the green tubes that was in a hot water bath? 


Bruce: Oh, that was, so I don't even remember the name of that now so you're pretty ...


Howard: But you remember that one?


Bruce: Of course.

 

Howard: Yeah and we had to have a hot water bath, warm up the tube. Oh my gosh, but anyway, I'm sorry. 


Bruce: Yeah, so the point I'm trying to make is we saw digital dentistry coming years and years ago so did you, so did a lot of people, that's not the genius of it. The important thing is that Henry Schein sells all of the intra-oral scanners and the mills and the cad software and all of the communication systems and so on. The key thing for the doctor is the doctor doesn't want to have to become a technology expert to use all of this stuff and so our job at the company is more than just selling the stuff it is creating systems that make it work together well and then tying that information back to their practice management software. And so today if you were to use, for instance, Three Shapes trios scanner at your practice and you're a Dentrix practice, that case is actually resident inside the patient record where it belongs and just bringing all of that together and making the workflows operate together between products that were never made to work together from different manufacturers is part of what we consider our mission as well. And so we spend a lot of time on interoperability between, which is another fancy, geeky word, which just means can we make it all work together so that the practice ... 


Howard: That was the [inaudible 00:46:36] of the internet connectivity, commerce, commercials, content, community, but connectivity, can all these devices talk to each other.

 

Bruce: Right, and workflow, can we make the workflow such that the doctors really want to use the technology and find it valuable to their practice and I think we spend a huge amount of time at the company training our people on this and building technologies and then utilizing technologies that makes all of this disparate, the equipment and the software and so on actually work together. So I think ...


Howard: So I'm going to hold you up your feet to the fire. This is dentistry uncensored. I'm going to make it uncomfortable for you. Again, your daughter, she's twenty-five. She just walked out of dental school. She's three fifty in debt. She could buy impregum from 3M and the average impressions about seventeen bucks. 3M's saying, oh no, give us seventeen thousand for a True Depth oral scanner. You mentioned Three Shape out of Denmark with their trios and then another group saying, oh, forget that you should buy a chairside milling machine and Patterson wave their exclusive on CEREC, so now you guys sell CEREC and E4D, which is owned by Plan Mech out of Helsinki, Finland. So how is she supposed to switch from a $17 impregum impression to a $17,000 True Depth oral scanner, to a $150,000 CEREC machine? Walk her through that decision. 


Bruce: So this is a really great question, Howard. First of all, if this were my daughter, I probably would advise her, you don't have to do everything all at once, but you have to do the more important things in order and since you just walked out of dental school and you've got great hands and you've learned all these great techniques, it doesn't mean you know how to manage your money. It doesn't mean you know how to run your business. It doesn't mean you know how to hire staff. It doesn't mean you know how to do any of those things. It doesn't also mean you have to go out and buy all of this equipment all at the same time, all at once. What it does mean, I think is that you need a company like ours who can sit down with you, take a look at your business, find out what your goals are, look at your finances and say, here's the order of how we're going to do this together here. Here's how we're going to know when it's time to add a new operatory, for instance. Here's when we're going to know when it's time to add an intraoral scanner or a mill or cad software or any number of other you know CBCT and all of these devices. I don't think it happens all at once because our daughter doesn't have that kind of capital, but if you get the right company and the right people behind you it can happen and it should happen based on a plan. So what happens with Henry Schein is our people, I mentioned this before, they go through this career development cycle. This is multisets of courses that they go through, it's almost like a university training that we bring special people in to train our team on how to assess a practice and help that practice grow and what to buy and when to buy it and how to utilize it. And then it's a stepwise process from there so if it were my daughter, I would say, you know what, Rome wasn't built in a day, neither is your practice going to be built in a day, but don't waste time. Get with people who can help you more than just selling you stuff those people need to know how a real business in this particular case, a dental practice runs and work with you based on your own capabilities and your own plans because we want to know from the doctor what do they want also out of their practice. So we spend an awful lot of time working with these practices. Again, some of the tools we have are automated, some are just relationship based, but it's based on the fact that our salespeople are not just there to sell cotton rolls, they are there to consult with those practices and help them build.

 

Howard: China reported last month they just had the first robot place a dental implant. It was ...


Bruce: I read that too.


Howard: The CBCT was hooked up to the robot and wow, I mean if that isn't a glimpse. Imagine when she's been out of school thirty years like we have, she's twenty-five, imagine when that twenty-five year old is thirty-five instead of selling CEREC machines, you'll be selling CP3O and R2D2 and they'll probably have droids doing the fillings. How far away am I from firing all my assistants and replacing them with droids?  


Bruce: I don't think you're going to be firing your assistants and I don't want to get into trouble saying so, but when you would ask me about what are some of the technologies that we're looking at and what's on the hit list in terms of being important you noticed that I robotics was on the list and it's not just the stuff coming out of China. We're looking at companies now where their robots and these are not just prototypes, these are very advanced prototypes near ready to be deployed, can actually place brackets on teeth, orthodontic brackets and then bond them and do it very quickly and very accurately. We're getting into a place now where robotics in dentistry and in other parts of medicine are increasingly important.  And some of what makes me smile sometimes is when people like you and I talk to other people, they'll say things like, "Well, I would never buy a car that could drive itself." Yet they get on airplanes every single day and those planes are flying themselves. The pilots aren't doing a whole lot. The planes are taking off, they're landing, they're keeping themselves on a flight path and so on. The reality is robotics is here and if you were to ask me how far away are we, I don't think the question is how far are we from droids replacing our dental assistants and dental hygienists. I think the right question is when a robot's going to be here and there is already some guided surgery systems, which is robotics, but I think you're going to see robotics in a big way in the next three or five years become far more mainstream than it is today. 


Howard: Humans are so emotional. I mean if you look at cruise missiles for hundreds of millions of miles flied versus pilots flying planes, guess who has a better track record.


Bruce: Yeah, I'm sure it's the missile.


Howard: And then Google chose Phoenix for their driverless car Waymo efforts so all year every single day I see Waymo cars everywhere. And it's so funny because all these patients will say, "No, I would never trust a driverless car." I'm like, do you not realize forty thousand Americans die in their car every year, times ten carted off to the hospital. You really think a robot could do worse than that. I bet if they were all driverless cars, what do you think that forty thousand death mortality would drop to? 


Bruce: So I don't know what the number there is, but I think again, you're bringing up a really interesting point. One of the things that the airplanes can do today that even the Teslas can't unless I'm off, is what we have today is we have autonomous vehicles that are accurate, the Tesla works, but what we don't have today is cars that have awareness of one another on the road. That's what we don't have today and we do have it in avionics. We don't have it in cars yet, but that type of situational awareness is going to make its way also into healthcare, which is that health care procedures will be done, that doesn't mean the doctors disappear from the OR. It doesn't mean the dentist is less busy or that they're firing their auxiliary staff. It does mean that they're going to be able to use these tools to provide much better care and with situational awareness and this is again where the artificial intelligence, machine learning, all of this stuff comes into play. 


Howard: Back to your twenty-five-year-old daughter who's a dentist. We'll call her Lisa Lieberthal. Would you advise her scratch practice or buy a practice? Because again, not to sound doomsday, in the 2008 crash I think it was like seventy-five or eighty practices in Phoenix went under and half of them were scratch practices and the other half were only all cosmetic practice, these high-end Taj Mahal in North Scottsdale type area. What do you think is a better decision, to buy old man McCarthy's practice that's been there forty years or set up across the street and start one from scratch? 


Bruce: So I think it depends on which practice you're buying, but again I go back to the early days, Howard, when you and I graduated dental school and if I remember correctly I thought I was paying a ransom to Suni Buffalo that it costs me $10,000 a year, including living expenses, my equipment, and everything. I thought that was a ransom. What kids are paying to go to dental school today is scary. I don't how they pay it back, but the reality is I think what it comes down to again is doing things smart, not expecting everything to happen all at once. So again if I'm advising my daughter, who is not twenty-five, she's twenty-three and her name is Olivia.  


Howard: Olivia.


Bruce: Olivia.


Howard: Olivia, like Olivia Newton. John.


Bruce: Yes, like the movie.


Howard: From the movie. Did you name her after the movie Grease with John Travolta?


Bruce: No, my wife and I just love that name. We just loved the name, Olivia.

 

Howard: That was a great movie.


Bruce: But, oh, it was a fantastic movie. But in any case, smart people in business may be and this is not just dental people, smart people in business find mentors and that's what we want to be. We want to mentor the practice. I can't tell you how many TV shows I've watched where Stan is being interviewed by somebody on some financial network ...


Howard: Kramer, I always see him on Kramer.


Bruce: Kramer and some others and he says the same thing over and over that, in a sense, we want to help the dentist do what they do best, which is provide care for patients. That is not our area. Our area is providing them all of the tools and all the consulting and help them build their business and look it helps us too, right, so the bigger business they build, the bigger business Henry Schein has. But it's a matter of what's important and what's important to my daughter or your daughter is to find mentors. People who can help them build that business and that's not intuitive. They don't walk out of school knowing that. 


Howard: So let's say your daughter, Olivia, is just leaving college and she's trying to pick between physician, dentistry, vet, you guys are entrenched in all three of those areas. From an economic business point of view, who do you think made the best decision purely on economics, I need to pay back my student loans. The physician, the dentist or the vet? 


Bruce: I think in today's world it's the dentist.

 

Howard: Yeah. 


Bruce: I think if you asked that question when you and I graduated school, it was probably the physician may be the vet, but today I think and a lot of this is because of what's going on in the payer community, insurance companies and so on and so forth. But in terms of pay for performance versus fee for service and so on, dentistry has remained quite a bit more independent for the dentists than let's say medicine is for physicians. I have lots of friends who are physicians and if you listen to physicians and I know you do and I do, these guys are crying all the time about how whoever they work, they just feel like employees on a mill where they've just got to produce and produce and produce instead of having a relationship with their patients, which is why they went to medical school, to begin with. I think dentists at least have a better opportunity to be more independent of these things, but that doesn't mean that these rules pay for performance and so on aren't coming to dentistry to, they probably are. And that brings us full circle, right, which is that if you're going to succeed, you have to have the right tools and the right company behind you to help you succeed. 


Howard: You know my physician friends I can put them in two groups. If they own building their own building, they're a dermatologist, an ophthalmologist, they're a family physician they're pretty happy go lucky guys. But my God, if they work in the hospital they say the politics, same thing in the dental school, that in the dental schools, the hospitals, the politics, when your average person is a dentist or a physician the politics is just insane and they say that is 80% of their grief is the politics in the hospital. And I also want to congratulate the dentist and the fact that in my thirty years, I think the dentists and the vets and the chiropractors are the most business-minded consumer oriented. They have visible locations, they have great hours, they have awesome websites. You go in there, they greet you. My God, you still go to the MD's in Phoenix, Arizona, you still got the glass wall. They hand you the deal to sign in like you're a cow. They never make eye contact with you. You can't get in for weeks. It doesn't even seem like anybody even cares in that place. The moral is below zero, about every five or ten years I have to go to the hospital for a couple days for a kidney stone and it happens just like clockwork. I've done it three times and you're in there and first time I walked in there about a twenty-five-year-old nurse diagnosed them and she goes, "Oh, I'm so sorry you have a kidney stone." I looked at her, I never had one before, I said, "How the hell do you know it's a kidney stone?" She says, "It's the only thing that makes a grown man cry." And I said, "I'm not crying." She goes, "Look at your shirt." The whole upper shirt was soaked like I just poured water myself. But anyway it was amazing how in the hospital and each time I go to a different hospital because I'm thinking it's going to get better, but about every eight hours someone walks in there and says, what is your name? And you're like, dude, I'm naked in a chair. I got bands all over myself. Every shift change, people are coming in, have you been helped? It's like have I been helped. You're in there and I tell my staff if this is ever serious you make sure they send me up to Mayo Clinic. In fact, next time I'm going to drive the whole hour to Mayo Clinic in North Scottsdale because. ...


Bruce: But you're making such a great point, Howard, unfortunately in my case I was forty when I needed open heart surgery and I was treated at one of the world's great hospitals which was Brigham and Women’s here in Boston, and still it's scary. You're very lonely. People are in and out of the room, there are shift changes. All of this is going on and I'm not critiquing the hospital system because I'm not educated enough to do so, but I do think one of the great things in the dental business and it's the reason I chose that answer when you asked me, which would you go into? I would go back into dentistry in a heartbeat because the reality is I think people in the dental profession are closer to their patients personally and professionally because they're allowed to be and it's maybe part of the whole psyche that drives them into dentistry, to begin with, but people in dental practices, at least this is my experience, they truly care for their patients and they have the time and the tools to do so. And so you and I grew up during a time in the seventies and eighties and so on when that was called if you remember, do you remember that? It was dentistry's Golden Age.  I think we're either in it again or we're close to it because, again, I get to see what's coming. But even when Henry Schein is delivering and the suppliers that work with us are delivering today are true miracles that can help us do things that we were never able to do before. I mean, think about, Howard, when you and I were in school, the whole idea of being able to see a patient and deliver a really excellent crown within an hour of the patient first sitting down. I mean we would have told that person they were crazy, right, but that's done every day now. 


Howard: Hey and last thing, if you ever see, I mean, I assume a company as big as yours has a huge legal department. How many lawyers do you have working for you? 


Bruce: So I don't know the exact count. 


Howard: Here's my best idea for your legal team. [Inaudible 01:04:41] 


Bruce: Okay.


Howard: I don't know how hard they'll laugh, but the thing and you promised me an hour, you're the busiest man at Henry Schein. I'm an hour and seven, this will be my last question. I'll shut up and let you go back to your day. I'm sure you got bigger things to do than talk to me all day. But the thing that aggravates me is the last flu season that was bad was the last financial crisis, it was 2009. About eight thousand to thirty-eight thousand Americans die a year from the flu and this year 2018, it's going to be closer to the thirty-eight and we haven't seen that for a decade and a lot of people on seeing grandma and grandpa on their hygiene appointment, one of the reasons they won't see them in six months is that they'll die from the flu, yet that hygienists isn't allowed to give a flu shot. I'm not allowed to give a flu shot, but she can walk over to Walgreens and a pharm tech does it. You guys sell flu shots, you know you sell that stuff. And HPV, the only cancer that's really in our department is oral cancer and HPV, and again, I can't give an HPV vaccine and I'm a doctor and then my hygienist has the same amount of college as a registered nurse in a hospital. I think you should start selling flu shots and the HPV shots to all the damn dentists and just sue who's ever in charge. It'll just be some class action lawsuit against who's ever blocking this. 


Bruce: So two things. First, I wish we had so much more time to talk about what you just brought up because it's a big ...


Howard: Well, talk about it. I'm not ...


Bruce: It's a huge deal for me. I think the dirty little secret, it's not such a secret, and I don't mean it in a critical way, is that when people have cancer for instance or really devastating diseases, they don't go to their physician until they don't feel well. So what we're doing is we're putting medicine where we want people to be not where they are. By the time they don't feel well, they're stage four and now we've lost them. I think dentistry, one of the places that dentistry will go, and this is not about IT at all so this is not digital, but it is within my world here at Henry Schein and Innovations. What we're going to be seeing, and it's coming really fast now, Howard, and it's wonderful, is liquid biopsy, which is the ability to take a drop of blood, urine or saliva and within ten or fifteen minutes tell if a patient has sepsis or cancer or diabetes or a number of other life-threatening diseases. This is not hocus-pocus. This is absolutely for real and why can't dentistry be the first line of defense? Think about it. People are not going to their physicians unless they don't feel well, but they're going to see their hygienist every six months, if not more often or a lot of people are. Why is it that she couldn't or he, the hygienist couldn't take a drop of saliva and put it in an SA machine and ten minutes later say, you know what, it came up negative or there's an indicator here. I need you to get to see the oral surgeon or the ENT or whoever for a biopsy. It's not just about oral cancer. These biomarkers are in the fluids in our body and increasingly there are amazing tests being developed and small machines that can read these things in ten minutes. Today, just today right before this call, my last call was with a physician who’s invented a test that can diagnose sepsis in ten minutes. Today, the way sepsis is diagnosed is you take a culture and three or four days later after the patient's already died or you've given them some wide spectrum antibiotic that can try to kill anything that's when you get the diagnosis back after you culture. These advances are true miracles of science and dentistry has a new role I think in that it can become first line of defense. I could talk to you about this all day, but I'm really passionate about this particular area and I think it's coming, and it could also be an amazing opportunity for dentists to grow their businesses in new areas. 


Howard: Yeah, it was a sad departure that when the dentist needed a chair and the physicians needed a bed they split ways when they started the first dental college in Ohio. And then 1840 the first dental university in Baltimore and now you're seeing these two systems come back together because I mean they split over a chair and a bed and they're really coming back together in groves and it's not just that when we talk about the oral-systemic link, you know, how we always talk about on Dentaltown, it's one of the most popular threads, the oral-systemic link. Every one of my physician friends it's the same thing their whole life, they were doing kidneys or they were doing hearts or they were doing livers and they're doing eyes or whatever their little part was, so it's not a thing with dentistry. Dentistry's got nine specialties, physicians have fifty-eight so they're all going to the same lecture saying, "Well dude, when you're in here looking at their kidney, you should be looking at blah, blah, blah. When you're in here looking at their eye ..." So all the healthcare continuum is starting to realize that eyes are connected to ears and noses and tongues and teeth and kidneys and livers.


Bruce: And you know, Howard, one of the great opportunities I have because my role is corporate and it crosses over all three of our major verticals, veterinary, medicine and dental, is that I want to use the opportunity to try when it makes sense, when it's appropriate to try to bring it back together. Another great example of this, and I know we're running out of time, so again, I can talk about this forever, is obstructive sleep apnea. This is a really dangerous or it can be a very dangerous condition for people and most people are undiagnosed and there's a real service that dentistry and medicine can get together and help people with obstructive sleep apnea, which you know can cause some very serious cardiac and other things to happen to people. But that's just another perfect example where medicine and dentistry need to get together and work together. 


Howard: And my final thought on that rant is, but even when they get the sleep apnea treated and they get a CPAP machine or retainer, whatever, the hard part, which is starting to slowly happen is, you can't really sleep next to another big animal all night. I mean people are going to bed with their spouse, there's a dog on the bed and it's knocking them out of the waves and what this silent majority or silent group, I saw one study that well people don't like to talk about at the water cooler because if you tell people at work that you and your spouse sleep in separate beds, they think, oh you have issues and you're going to get divorced, but the bottom line is that when your dog is barking at a noise or a light that drove by and wakes you up in the middle night, you're not getting profound sleep. And I know so many dentists and most of them are in the closet about saying it, but some are open like Rick Kirshner who, founder of Comfort Dental, they're openly saying, oh my God, me and my wife figured out that if we had separate bedrooms, we don't have any TV's in there. We don't take our cell phone in there. The windows are closed, it's dark, it's cold and if you go into a dark, cold room by yourself, you actually feel great in the morning. But you go get in bed with your wife and a dog and a cat and there's a TV on and there's an alarm clock with a blue light. I saw a study yesterday that just that little light from the time, just that little amount of light can even correlate to depression.

 

Bruce: So yeah, I think you read the same article I did. I read that article too, that they say make the room pitch black if you can. That the lights from our smartphones and other kinds of things that these little lights are actually obstructing our sleep, but getting back to the point about medicine and dentistry working more closely together it's beginning to happen in certain areas. Obstructive sleep apnea is one of them. Henry Schein has a whole division in our dental group called sleep complete and if you were where I was just a couple of weeks ago, which is the annual symposium for our orthodontic group, you know Howard, being in dentistry, orthodontists are all over sleep apnea and related conditions and are using CBCT machines and looking at airways and finding out ways of permanently increasing the size of those airways. It's just a working with sleep physicians so there are great things happening I think and Henry Schein because we have all three, we represent all three verticals, has a great opportunity to drive some of this and use utilized dentistry as sort of first line of defense in a whole number of systemically dangerous conditions. 


Howard: Well, now I got to hold you to, you opened up another can of worms. You mentioned your HSO division, Henry Schein Orthodontics, which is probably the largest player in the Ortho field. All my orthodontist friends are extremely upset because Align Technology, which owns Invisalign and ITero Invisalign bought I think 17% of Smiles Direct Club and now they're opening stores and malls to bypass the orthodontist. What is your thought on that? 


Bruce: Alright, so I got to be careful here. 


Howard: I know, I know, I know.


Bruce: I got to be careful here, but,...


Howard: There's no lawyers listening. 


Bruce: Yeah, there'll be a few. One of the amazing things about Align Technology, which I believe by revenue basis is larger than all other companies in Ortho combined, is that they are the single biggest user of 3D printing in the world, just that one company. If you deliver fifty or seventy or as many aligners is as is needed for a case Align will print as many models as they need for each one of those aligners. Imagine what's going on in terms of just 3D printing technology. So when it comes to clear aligners, there is so much going on behind the scenes and I can't go any further than I just did, but I think people in dentistry watching this, reading and keeping up on what's coming in dentistry, the aligners business will change, it will grow. Align won't be the only company in the business very, very soon and it'll be fascinating to see what happens in orthodontics. Henry Schein Orthodontics is an enormously successful part of our company and it's run by a group of really great people down in Carlsbad not too far from you, but there are great things coming and that's all I can say.

 

Howard: How is Clear Correct doing though, that was the major challenge at Invisalign? 


Bruce: So I don't know what their revenues look like, but I think Align controls, what did somebody tell me the other day, and I could be totally off on this because I didn't read it myself it's just something somebody mentioned to me, that Align controls in the mid 90 percentile of the total aligner business at this point. So I think what you'll see is that that market continues to grow and you're going to see other companies, big companies get into the aligner business as they can do so legally. What's held up other companies getting in that business is Align has been not only very smart in how they in terms of their technology, they've been super smart in terms of how they've protected their IP, but as you know, in the United States IP protection does expire. And so I think you're going to see things happening all around the dental business in terms of clear aligners. It's a huge business. 


Howard: Well, you know, I think you must be a good student of Shark Tank because every time someone pitches an idea, Mr. Wonderful, the most beautiful one on the panel, the bald guy from Canada, always says, "What's to stop anybody from doing this business? Do you have a patent? Do you have any intellectual property? Anybody could do what you're doing." And then they always come back and say, "Yeah, but I'm special." And Mr. Wonderful says, "Well, you're actually not." I just want to say one thing about, I mean again being fifty-five I've seen all these rodeos when I was little I grew up in Catholic, Kansas. I had five sisters and a brother, everybody had these huge families and only the most hideous looking ortho case on a girl got braces and then comes along birth control, smaller families and now everyone gets braces. And the thing I look at the Invisalign market is the expectations of the perfect teeth are rising. I mean people are getting Invisalign at forty or fifty just because one tooth is slightly crooked so I think the ortho market itself has been exponentially growing since I was ten years old to where you had to be the ugliest kid who looked like you could eat corn on the cob through a chain link fence. Now everybody is getting. It's like getting your hair done, your nails done so I think that market is expanding so fast [inaudible 01:18:47]


Bruce: It's expanding quickly and there's a huge amount of focus in ortho and again I was just at the symposium a couple of weeks ago with several hundred of our customers. The other big focus in ortho is shortening the duration of treatment and we and some other companies, but especially where you have some technology that we've developed that we have IP around that really drastically does that and at the same time delivers better, more reliable results. So I think what you're going to see is, besides the aligners business growing just naturally because it's very attractive, it's about not just clear aligners it's about the kids or the adults who are in ortho spending less time in ortho than they used to and several of the presentations at the symposium were all about bringing down, radically bringing down the amount of time in treatment and as a former dentist, it's a beautiful thing to watch. I don't know about you I went through bands and brackets and the whole business and the typical two to three-year process, that's all changing now and we have much, much better idea about the physics behind how the face grows and Orthodontists are doing some absolutely marvelous things now. 


Howard: We keep going over and over and over, we're an hour and a half now. The ortho market has been expanding rapidly since the 60's, 70's, 80's, 90's, and it's going to continue to explode, but maybe just another generation or two and then it's going to start massively contracting because the anthropologists keep pointing out to us that these malocclusions didn't appear till just a century or two ago and they didn't exist for millions of years because when these babies were born they were nursing for a couple of years. Now when the baby has any difficulty nursing, they stop nursing, give it a sippy cup and some bottle mouth guzzler thing and then they were feeding these baby humans, they were throwing them a leg of a mastodon and saying, "Chew on that kid." Now you're feeding it applesauce so there's no forces affecting the facial development and as soon as, and I tell Orthodontists, the hottest lecture you can give in your community to get all the moms in there is how to prevent ortho so your child doesn't need it. Now a lot of them, but everybody's talking about it and people got to be more tolerant about nursing in public and nursing mothers got to ... it's okay that the baby is struggling to nurse. That's how you flatten out and spread the maxilla and the mandible and that's the force that needs and quit feeding your baby applesauce and just throw it your bone from your T-bone steak and let it chew on that all night because I really think the millennials would rather prevent lung cancer than cure it after they've smoked a pack a day for forty years and I think it's only a generation or two where the moms and dads are going to say let's prevent ortho, because they love anything natural. But anyway, on that note I can't believe I got the top dog, a guy I've known for thirty years. Really, it was an honor that you took an hour and a half out of your busy day to come talk to my homies today. It was just awesome. 


Bruce: Hey Howard, this has been so much fun for me too. It's been too many years since I've seen you and I truly appreciate you guys reaching out to me a couple of months ago to set this up and let's do it again sometime.


Howard: Anytime you want to come on the show or if you got any hot talent at Henry Schein or they got a hot, passionate message they want to talk about, tell them to shoot me an email, howard@dentaltown.com. And on that note, remember to subscribe on YouTube and also shoot me an email, howard@dentaltown.com. Tell me how old you are, what country you live in and what you like about the show and back to that ortho, if you go to Dentaltown under orthodontics, we have fifty forums, you go to orthodontics. One of my posters, the twenty-five greatest orthodontic podcasts all time, which I taped all of them. I went your HSO Henry Schein Orthodontic Convention and I was sitting there in the lunch room and we sat there for two days and we taped some of the most genius Orthodontists from Spain and all around the world and ...


Bruce: Louise Carrier, right.


Howard: Oh yeah, they were just genius and thank you so much for letting me go in there and steal your entire two-day program. I didn't even pay to go to the seminar and you let me podcast all those guys. The views and the feedback have been amazing because there's a lot going on in ortho. 


Bruce: There really is. Anyway listen, thank you so much for today. This has been a lot of fun for me and I look forward to seeing you live soon and we'll do it again if you'd like. 


Howard: Okay and give Olivia a big kiss from Uncle Howie. 


Bruce: I will do that. Thanks, Howard. Take care.




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