Aspen Dental CEO Bob Fontana: “We’re Big Advocates for the Patient”
So you started in the dental business coming out of business school. And this was about what time frame?
So I got done with school in 1991 and went to work for a company called Upstate Dental in Syracuse, N.Y., and worked there for about three or four years.
And in 1991, the idea of corporate dentistry, did that even exist really?
Not that I was aware of. I knew that there was a small group in Syracuse. And at the time the economy wasn’t great. So it offered me an opportunity to get into [the] health care field, and at one point I thought about actually going to dental school.
And what happened then? You decided that wasn’t such a good idea?
I became friendly with one of the doctors who was in one of the practices, and he was an associate there, and he decided he wanted to go on his own, and he approached me and said, “Listen, could you manage all the back-end kind of stuff that I didn’t learn in school?”
So when did it occur to you that there was a relatively big business opportunity here?
It was probably a couple of years into it, but at the time, I think particularly kind of mid- to late ’90s, you saw some other groups developing around the country, and so they all, I think, were trying to figure out how they add value to dentists, what their model is and all that stuff. We saw an opportunity to really attract an underserved part of the population, and it became clear to us as time went on that there was a really big missing part of the dental health care piece in the marketplace that we [thought] we could serve.
Why was there such a big gap? …
I think the traditional dentist is 2,000 to 3,000 patients typically, and that’s who they serve, and that’s who they’re focused on. [They’re] not really thinking about what’s in the marketplace, what’s missing in the marketplace, and how do I make awareness for maybe segments of the population that [don’t] have access to care? So we felt like there was an opportunity to say: “There are some people who I think are missed or undervalued or not understood. Can we attract that particular patient base to our offices?” And that’s been the goal since we’ve started.
There are also some places that tend to — you know, there’s kind of Swiss cheese in the coverage, right? Explain how that all evolved.
I think dentists come out of school, and they’re going back to their hometown, or they’re going to go to markets that are desirable markets. There are a lot more dentists per capita, for instance, in Miami or San Diego than there probably is in markets like Flint, Mich. So as a result, you have a working-class community where there’s still an existing population [that] has a tremendous amount of need, yet the dentists are becoming older, working less hours or maybe perhaps even retiring, and there’s no new dentist going back in. And I think that creates the Swiss cheese effect.
So historically dentistry has been the classic sole proprietorship, and as a result it hasn’t really taken a broad view, and as a result there have been people who have kind of slipped through the cracks here.
Yeah, I think that’s true. And for us, I mean, just to be clear, the dentists hire us to provide the business services that they’re not taught in the schools. So it enables our doctors, I think, to more fully focus on the patient care. …
Is this analogous to what has happened in the world of optometry? When you look at LensCrafters or Pearle Vision Centers, it used to be just kind of the local guy, the sole proprietorship. It’s become much more chain-oriented. Is that what’s happening in dentistry?
I think there are some analogies to eye care that I think are very similar. … There are some differences, too, because there is a product in eye care that you can go in and just fill your prescription. I don’t understand all the organizational structures, but I think what happened in eye care was that that competition has created better access, more affordability, more praise, and I think eye care, quite frankly, is looked at in health care as one of the success models.
How has corporate dentistry increased access for people?
Well, for us, speaking on our organization, a couple of things. One, I’m not even sure what corporate dentistry means, because we have no influence on the dentistry. All we try to do is to figure out how to remove all the nonclinical services from the practice to enable our doctors to focus on patient care. But together I would tell you that we share a common belief with our dentists that there is a big underserved part of the marketplace that has barriers to care. And those barriers are typically affordability, hours, convenience; you participate with your insurance carrier. So that’s where we come in and try to remove those barriers with our doctors to make sure that patients are coming through our doors.
So who’s the typical patient?
A typical patient is probably 45 to 65 and struggling to make ends meet. They’re taking this week’s paycheck to pay last month’s mortgage, making their car payment, trying to put their kids through school, and unfortunately, dentistry can become discretionary. And they will push things off and push things off until they can’t put them off any longer. And they find themselves really probably in an emergency situation, and hopefully, if we’re doing our jobs, we’ve located in the right market, we’re creating awareness in those markets, and those people are choosing to come into our offices.
So you see frequently a mouthful of trouble?
Absolutely. Again, our typical patient has delayed care for a long time, and they’re coming in with a tremendous amount of need.
When they walk in the door with this mouthful of trouble, what happens?
Well, hopefully what happens is that when the staff understands exactly who this patient is, and we’re treating that patient with dignity and with respect, and we understand that they have made difficult choices, and we’re trying to find ways for them to build trust in the office immediately, because they’re coming in very nervous, and I think if all that goes right, we’re trying to lay out a comprehensive treatment plan and then educate that patient on exactly what they need to have done so they can be sure that not only in addition to maybe solving the problem that they came in for, that they’re really going down the path of good oral health. And that’s the goal, really, of the office.
So these comprehensive exams, you’re looking at everything, right?
You’re looking at everything. You’re doing a full series of X-rays. You’re doing a comprehensive exam. It’s the first time they’ve been in the office, so they’ll come in; we go through that series of X-rays. They’ll get to meet the doctor. The doctor will discuss the needs with the patient, try to understand the patient and what’s important to the patient. And then the doctors hopefully are also articulating what he or she thinks is important for their oral care. They come up with the treatment plan and then discuss the options with the patient.
In many cases, these are people who have not seen dentists for many years, right?
… Just here in Warsaw, [Ind.], going out with the owner doctor here in this particular market last night, he says it’s not uncommon to see patients that haven’t been to the dentist in over 10 years.
Of course, it’s like the old “Pay me now, pay me later” thing. When you come in after 10 years not seeing a dentist and all kinds of problems, it’s very expensive. And as you put it just a moment ago, these are the people who are on the financial edge. How can they pay for what is needed when they come into this office?
Well, that is true. Affordability is one of the biggest barriers for sure, and we recognize it. So we really try to keep affordable fees, and we use the scale of our organization to try to pass those savings off to the patient, and it gives us an opportunity to have what we think are very affordable fees.
So volume helps?
Yeah. Again, having almost 350 practices in 22 states across the country, we get scale, and we’re able to pass those savings through the scale of our organization on to the patients and have … affordable fee structures, because we know affordability is a priority for these patients.
In addition to that, it’s important to keep in mind that 70 percent of our patients have insurance, and we work hard to work with and participate with almost every insurance plan that’s out there. … And probably the final thing is we also offer payment plans and solutions through third parties that, if needed, we’ll present it to the patient so they can get the care that they need.
The payment plans that you offer are third-party. Why wouldn’t you finance something yourself? Why do you go that route, third-party?
We’re really not a finance company. Our purpose is to focus on creating access to care for this underserved population and trying to get them the care that they need. That’s who we are. We have a deep belief [in] that, and we’re very committed to that.
We’re not a financing company, and we outsourced that to a company called CareCredit, which is the most common source. It’s a health care finance company which 80,000 to 90,000 dentists participate with across the country.
Tell me about what you tell them after that first visit. We’ve heard from some people that employees are instructed as much as possible to get people to commit to a significant amount of care and either to the down payment or get the financing up front. How important is it that when they walk out of here after that first visit, they’re signed on the dotted line for a whole raft of care?
We actually think that’s very important, but we have a belief that if we’re doing what’s right for the patient [that] would do what’s right for the practice. It’s not about trying to sign people up to care for the practice’s sake. It’s trying to do it for the patient’s sake, and we’re big advocates for the patient. We have an obligation to take this patient who may not have been at the dentist in 10 years or longer to make sure they have a clear understanding of everything that they need to have done in their mouth, and if they don’t get it done, the risk associated with it not only from financial risks by delaying care, but also the systemic health risks that go along with it.
But is there pressure to add on to the menu, if you will, the amount of care that is anticipated and get people to sign on the dotted line for that on their first day?
Absolutely not. It’s just not who we are.
How much concern is factored in that, you know, these people with low income ultimately may not be able to afford the financing? In some cases, if you miss a deadline, some of this financing goes into 29, 30 percent interest retroactively. You teach your employees to look at the full financial picture here and make sure you’re not overselling, such that people who can’t afford to pay back are stuck with the big bill?
Well, I certainly understand the sensitivity to that. Our first obligation is not to assess if they can afford it or not afford it, whether they have insurance or they don’t have insurance. Our first obligation is to treat that person like I were the family member to say, “This is what you need, this is what you should have done, and let me tell you why you should have it done,” and then to work with that patient on ways that they can afford it. And if they can’t afford it, … they’ll work on saying, “OK, what are the most important things that you have to have done?,” and maybe sequence the treatment in a way that’s more affordable to the patient.
Sequence, but nonetheless, you want to have them commit to the full treatment, don’t you?
I think most doctors are here to help patients absolutely get the ideal treatment plan. So in order to improve the oral health, that’s why they exist, and I don’t think it’s different in private practice either. You know, that’s the goal: Let me help you improve your oral health. It’s a deep belief that we have in our organization, and given the patients we see, it’s important that they’re fully educated.
And that’s part of the problem. These people aren’t very educated about their own mouths, are they?
Typically not. I would say that most patients know when something is going on, though. … And they just unfortunately wait and wait and wait because of life. But then they finally choose to come in, and they need a lot of work.
But in a situation like that, you could say that a patient would be easily up-sold. Do you try to up-sell people into treatment they really don’t need or perhaps can’t afford?
Absolutely not. And again, this is the good part about who we are as our organization. We’re not about elective dentistry. We’re not trying — not that there’s anything wrong with it, but that’s not who we are.
So you said about — was it about 70 percent of your patients have insurance?
So about 30 percent comes from the third-party financing, correct?
Twelve percent of our patients use third-party financing. And you know, there is — unfortunately, dentistry insurance caps out. So once it caps out, people are out of pocket for the balance of it.
So you would have third-party in that case, though, right?
Well, it’s either the third party or they just pay for it out of their pocket. So not everybody uses it. Twelve percent of our patients use financing.
We saw a Moody’s report which said about 30 percent of your revenues one way or another are linked to third-party financing. Is that accurate?
I would say on the revenue basis that’s about accurate. That’s right.
So this is an important part of your business. The third-party financing is a key.
I would agree with that. It’s absolutely a key to providing the solution for these patients. There’s no doubt about it, because again, they’re struggling to get through life, so it does become an important part of the solution for them.
But do you worry about financing that ultimately could put somebody in the situation of having to pay it back at 29 percent or even greater? That’s a number that could be viewed as predatory.
I think I understand what you’re getting that. It’s not who we are. Our obligation is to tell the patient what exactly their needs are and then work with them on solutions [for] how to get that treatment completed. Yeah, 80,000 to 90,000 dentists accept CareCredit, and I would imagine that they’re all trying to do the same thing, and that is, “Let me educate my patient on what their needs are and then figure out a way for them to get it done.”
Do your dentists or your office managers make sure that your patients read the fine print on these agreements for the financing?
Absolutely. We have more rigor and process around this. We work hard on our own to make sure that the teams and the staffs not only understand the products, [but that] they understand the importance of disclosure; that there’s an incredible amount of transparency. And we think that’s just an important part of their role. And it’s also important to note that we don’t want the patient actually to take financing, because we pay for it. You know, you mentioned the revenues. We will pay a third-party financing this year. Our organizations will pay approximately $20 million to use patient financing. So our preference is for them to pay on their own, but if they can’t, our goal is to get them into the care that they need, so we’ll look at financing as part of the solution.
Well, help me understand that. If they’re going out getting the financing on their own, why are you paying into it?
Because that’s the way that CareCredit can make this work, for instance, for the patient. So we have to pay CareCredit. Part of it is to make sure that it’s just part of the economics. And it’s not just us. Every dentist has to pay.
I guess that the concern is like, whenever you get into a case where, “Hey, don’t worry; we can finance it,” the concern is the people one way or another are buying something — in this case it’s dental care — that they can’t afford.
Well, I don’t agree that they can’t afford it. I mean, I think that people are making smart decisions. They’re coming in seeking care. They’re in pain; they’re trying to fix a problem. And in certain cases they have to use financing, and I just think that they’re educated enough to make those decisions. But ultimately, I think they take their care as a priority.
Let me ask you about that, though. Is there — and this is a much broader philosophical question — but is there something wrong in this country that poor people are so up against it and with their backs against the wall to get reasonable dental care that they have to, in some cases, finance perhaps beyond their means or at a high interest rate just to get a toothache repaired?
Well, I definitely think this part of our country is hurting; there’s no question. And over the last three or four years, it’s probably been even harder times for this part of the population. So it is unfortunate, and there’s no doubt about it. And I think that’s why we play an important part in trying to create solutions for them.
We get letters all the time from patients saying, thankfully, “You changed my life,” people who may have driven an hour or an hour and a half. So you do have to ask yourself, why have they been without care? Where have they been? And what has happened in our system, health care system, dental health system that is preventing them from getting care?
If these people who are at the lower end of the economic scale were able to afford dentistry all those years when they’re trying to get their kids through school and everything, Aspen probably wouldn’t have a business, would it?
I think that’s true.
Help us understand why private equity firms are so interested in this business. You know, generally private equity goes where the money is.
Well, I think private equity goes where there’s good business, and we have a good business. I think they like what we’re doing, the value we’re adding to the community. They understand that we’re providing good work to people, hopefully providing excellent patient service. And they also understand that we can be successful doing it. And they believe that by doing that we can continue to grow. We’re in 22 states, and we have half a country to go.
Do you think private equity really cares about the type of care? They care about the bottom line, right?
The private equity firm [concern] is that we have very much concern about making sure that we’re doing the right things, absolutely.
And the bottom line?
Well, of course the bottom line. They’re in it for a return on their investment, there’s no question. That’s no different than how a private practitioner may think as they invest new capital and new technology or chairs or a new office. So these are small businesses. If you take a look at the traditional practice, it’s a small business. They’re also looking for a return. So it’s no different in that regard.
Having investors like that in the mix, how much does that add to the pressure to continue the growth and to keep the profits flowing?
Well, certainly they want us to grow, because if you can’t grow, you can’t get a return. I mean, growth is an important aspect of what we try to do. It’s not a strategy; it’s an outcome. And the strategy is how do we get to communities and create further access to care and get more people who need care through our doors. That’s the strategy. Growth is an outcome of them.
Growth is not the strategy?
Growth is not the strategy. Growth is not a strategy. Growth is an outcome of strategies.
Tell me what the plans are. You’re right now at 350 offices. Where are you headed? Global domination, right?
No, I wouldn’t say global domination, but we do believe that there are communities across the country that are still like Warsaw, like areas in Michigan. I mean, we went into Michigan in 2007 and 2008 when everybody was leaving. We know places like Flint, Mich., Bay City, Mich., Muskegon, Mich., are underserved. We know there are people — good, hardworking people — trying to make ends meet in those markets that need our care and need our services. And there are other communities across the country that need it as well.
If I’m a dentist, why would I prefer to work for Aspen as opposed to opening up my own office?
Lots of reasons, really. You may have a lot of debt coming out of school, so there’s a lot of additional risk about thinking [about] opening up your own practice. You’re not really taught that in school either. You’re taught clinical stuff. And so where do I locate? How do I think about what patients I want to come into my practice? What equipment do I use? And then how do I run this small, complex business? So they look at us as an opportunity to say, “I can offload the nonclinical services to Aspen, and I can focus more wholly on the patient experience and their care.”
So the dentists, they come out of school with a lot of debt, and there are a lot of advantages to come in here. I suppose the downside to working for a large company like this is, well, you lose a little bit of freedom, and you lose a little bit of connection link to work deriving more profit. And the way you answered that is you have a bonus system. Tell us a little bit about the bonuses and how that impacts, potentially, care.
We, Aspen Dental Management, don’t have a bonus system because we’re not paying the doctors. The doctors pay the doctors. The owners of the practice pay the doctors. So for their associates, they have incentive systems for their associates. But the owners of the practice are no different than, again, in traditional practice. I mean, they have production, and then they have expenses, and they’re left, hopefully, with some profit that obviously gives them the ability to live.
I’m sorry. Let’s back up for a minute. And as best you can, help me understand the relationship between the dentist owners and the corporate entity which provides the managerial services. It’s kind of complicated. If you could just walk me through that and help me understand, if that would help me.
OK. So dentists establish a practice. We can help them establish, like we did here in Warsaw, helped Dr. [Kurt] Losier establish a practice here. He owns the practice. He controls the practice. He’s the clinician here. He has doctors and, you know, hygienists working for him. He outsources things like accounting, billing, collections, you know, kind of all nonclinical things to us so that can free him to focus more on the patients.
So when you say he owns the practice, does he own that chair you’re sitting on?
Every state’s a little different, so I’m not sure. The rules and regulations are different in every state. So in some states, the dentists will own all the physical assets of the practice, and in some states not.
And explain why that is?
I think in some states they feel like if you own the equipment then you exercise control over the dentists. … I would say in some states we do own the physical assets, and in other states we don’t.
Why that arrangement? Why not just own the practices and hire the dentists?
You just can’t do it. There are very few states where you can do that. In most states, you cannot do that based on regulation.
And so this is just a way to get around regulations essentially?
No. It’s really philosophical that we believe in continuity of care. We believe that the dentists should be running the practice. Even aside from regulation, we believe doctors want to be led by other doctors. And we believe that the health care decisions, just like regulation dictates, should be left up to — those health care decisions of patients should be left up to the dentists.
So Dr. Loeser owns this practice, but it’s an Aspen office, so he doesn’t own it in the purest sense, does he?
Yeah. He owns the practice. Absolutely. He pays us a fee to provide back-end business services, but absolutely he is 100 percent owner of the practice.
So in a way it is like a franchise in some respects.
No, not really, because I don’t know how you would franchise dentistry. We provide business services, OK? Each dentist is a little bit different. They use different supplies. Some have different techniques. They’re all different. What’s common is we’re going to do their billing; we’re going to do their collections; we’re going to do their accounting for them; we’re going to do all those things that your typical traditional practice has to do for themselves.
Yeah. So how do you incentivize your people and the dentists along the way here in order to keep the money flowing?
Well, the incentive for everybody is let’s do the right things for the patients, to have a clear understanding who this patient base is and what their needs are. That is our focus. That’s who we are. It’s a part of our DNA.
But every business, especially a business where private equity is involved, you’ve got to have goals of some kind and ways of rewarding people to reaching those goals, incentivize them. So explain how do you set up a system to ensure that the office manager is doing his or her job.
Well, here locally, the dentist is in charge of the staff. And so there’s the local owner to make sure that there’s a person here that they’re doing their job; that they are treating patients with respect and with dignity; that they are making sure that there’s clarity on their treatment plans; that they’re making sure that the office is clean, that the office is presentable; that we have a good staff in place, so we have the appropriate staff in place. So the local dentist owner is here making sure that those things happen on a daily basis.
But they have to meet certain goals in order to derive income. There’s a bonus system, right?
When you say “they,” who’s they?
Well, office managers, for example.
So the office managers are rewarded based on controlling expenses and making sure that they reach a certain patient satisfaction score. Those are important components to us. And so we want to control expenses, and we want to make sure that that happens.
The doctors don’t have any budget to reach. They’re not rewarded based on heading any level of production or any level of budget. It’s just not who we are. They’re focused on trying to, again, create access for this patient, make sure that they’re signed up for their treatment plan as best they can, make sure there’s clarity around that, and making sure that they can improve this person’s life by giving them the oral care that they need.
So doctors don’t get bonuses, or their income is not linked to their production?
I wouldn’t describe them as bonuses. They get a percentage, you know. So in traditional practice, they get 100 percent of the profits. In our practices typically — and again, every doctor is a little bit different on how they pay their dentists — they get a smaller percentage of those profits from that practice.
I guess you could say any dentist gets a bonus if they’re the sole proprietor. As you say, they get all the profits.
In this case, I guess the concern is that if you create an environment where you’re trying to meet a goal — it’s like being a salesperson on commission: There is an incentive to do perhaps a little more work than might be necessary.
I think it’s important to keep in mind, again, that the dentists don’t have these goals. They just don’t have them. They don’t exist. If the office does well they get a percentage of the profits of that particular practice. And again, that’s no different than what’s in traditional practice. And it’s significantly less. Again, I’m talking about the associates — dentists who work for the owner dentists — is significantly less than what happens in traditional practice typically.
But if a dentist doesn’t meet production goals, what happens?
There are no production goals. That’s what I’m trying to describe to you. There are not any production goals for the dentists. The typical associate in the typical traditional practice typically gets a percentage of their production. And we don’t even do that. Our doctors typically are paid by their owner doctors in a fashion that if the practice is doing well, I’m going to share some of the profits with you. That’s typically how it works.
So maybe I should just back up and ask you, how do you pay your dentists?
We don’t pay the dentists. And it’s different by owner practice, by the owner. So how Dr. Loeser pays his dentists and how other people pay the dentists, typically there will be variations on how that’s done.
It’s completely up to them?
It’s usually up to them, but usually it’s not on production, it’s not on a budget, it’s not anything like that. It’s typically, again, going back to — it’s either a flat daily draw in some cases, or in some cases there’s a percentage of the profits of the practice. But again, it’s different by owner dentist.
It’s up to them, though.
It’s usually up to them. Yeah, absolutely.
So for the nonclinical employees, the ones who would be directly an employee of Aspen, how do you pay them?
They’re mostly salaried individuals. In certain cases, the manager or the team will get incentives based on patient satisfaction and how well that office performs.
Well, explain a little bit more about that, you know, the performance of the office and how they are incentivized.
Well, in the manager case, they’re incentivized by making sure that they’re controlling expenses. So they have an opportunity to get rewarded based on how they control the expenses, make sure there’s perhaps less overtime, make sure there’s not additional supply cost, making sure that … we have the right number of hours in the staffing. And then they also have a layer in a patient satisfaction component as well.
So you’ve got to run a business, I understand that, but the concern is that there is an incentive to do more work than is needed. And how do you guard against that?
I just don’t think it’s in the DNA of the doctors to do that. … If the doctor said, “This is your treatment plan,” none of the staff members says, “Well, you don’t need that; let me go do something else.”
So the treatment plan comes in, and the office manager sits down and does a consultation in essence to close the deal. So they are involved in that, and so there’s got to be some sort of incentive for them to get the patient to sign on the dotted line. How does that work?
We know that patient is better getting the care than not getting care, and their incentive is trying to get that person to get care. But what we do, what’s important to know is that the doctors aren’t wearing two different hats here. They’re trying to make a clear clinical decision based on you coming into the practice regardless of your insurance, insurance type and your ability to pay.
They’re looking at you and saying, “This is what I think that you need,” and they’re working with you to craft an ideal treatment plan that meets those needs. Then the manager just takes that and starts to talk to you — this is what your insurance will pay; this is the estimate of what we think it will pay; this is your co-payments that need deductibles; this is how long those procedures typically would take and how fast we can get those things done for you — and answering any other questions that that patient may have and hopefully that patient does start.
One of the things we’ve heard a lot is that there is — and this is from some of your former office managers — is that there is a lot of pressure to, if somebody needs a tooth pulled or a few teeth pulled, to move them into dentures, and if they’re into dentures, to move them into the high-end, what [are] called Comfort Fit, right, the high-end dentures.
Comfort Fit, yeah.
So, first of all, is Aspen known for being a practice that encourages people to get dentures? Or is it just the fact that you get these troubled mouths that come in here?
It’s more the latter. It’s not about doing dentures; it’s about trying the treatment plan on patients on what they need. One of the segments of the population I didn’t mention is seniors, so we look at seniors as a big opportunity as well, because we’ve recognized that they’re kind of forgotten about. Seniors are growing at two times the rate of the overall population. They have lots of needs.
And it’s not uncommon that their dentist is probably retired or maybe moved out of the community that they’re in. And in many cases, seniors may need a denture or a partial. And so if you look at the statistics over the next 10 years [given] the aging demographics, dentures are continuing to rise.
And of course Medicare doesn’t help out —
They do not.
— in these situations. So there are a lot of seniors in a tough situation. But you would not accept the characterization that Aspen pushes dentures?
Absolutely not. We offer a choice.
So we talked to some office managers who say one of the things they’re instructed to do is to — you know, it’s not unlike going in to buy a car. You go in to buy the standard transmission and no air conditioning. Well, who buys no air conditioning anymore? But anyway, you go in to buy the stripped-down car, and there’s a push to sell a lot of options. Maybe the basic dentures are fine, but the Comfy Fit is what they’re told to get. Is there a pressure to do that kind of thing?
Absolutely not. It typically is treatment planned by the dentists. I will tell you there is a difference. There’s a better-quality tooth; there’s a more natural-looking tooth; different acrylics; even different process. But we leave that up to the patient.
One other thing that that we heard is that the Comfy Fit — you actually make those, right?
We make all the dentures, yeah.
Is that an important part of their business model as well, to do your own dentures?
We think it’s an important convenience factor for not only the dentist, but for the patient primarily.
It’s also profitable, I imagine.
Well, you don’t do any procedures that you think that aren’t profitable, so I mean, there are — whether it’s crowns, fillings or whatnot, I mean, I don’t think we look at it any differently. We don’t look at profit by procedures. It’s not who we are.
Is it possible that as you go forth and do a lot of this denture work, are you pulling a lot of healthy teeth as a result?
Oh, absolutely not. And again, those are decisions by the clinician, but they are in the business of saving teeth first and foremost. If people are losing teeth, they’re because they probably have periodontal disease or those teeth just can’t be saved.
Tell me a little bit about these add-ons that are a part of the whole mix here at Aspen and why that’s important.
I wouldn’t call them add-ons. If someone has periodontal disease, they have periodontal disease. So I think sometimes patients come in who haven’t been at the dentist for a long time, thinking that they could maybe get a cleaning. In reality, what they may need is, you know, a procedure called Soft Tissue Management [STM], which is a lot more involved, because they have some form of periodontal disease. And periodontal disease typically in America goes undiagnosed. … And so we recognize that it’s out there, we try to educate the patients on it, and if they have it we’re going to put a treatment plan — the doctors will recommend a treatment plan that will help eradicate that periodontal disease.
What about the coatings and the toothbrushes and all the —
I’m not sure what you mean by coatings, but there is a toothbrush —
The Rotadent toothbrush, right. I think the hygienists call it a periodontal instrument basically, and they think that’s a better tool, particularly for people who have periodontal disease, to help them as they go through their series of treatments.
We spoke to an older woman who was sold one of these toothbrushes, and I think it’s about $150, and she said that was a couple of weeks of grocery money for her. And she was wondering why she had it and why she was sold it when you can get an electric toothbrush at a drugstore now for under $20.
Well, that clinician who recommended it obviously is a big believer in that particular instrument.
Right, but it’s an expensive item for somebody who doesn’t have a lot of disposable income.
I guess it is, but if it’s helping you save your teeth, and it’s going to reduce, perhaps, costs down the road, and you can enjoy your life better, and if that’s the clinician’s recommendation, then hopefully they’re getting the benefit of having that in the Soft Tissue Management treatment.
I want to show you one case, though. I want to see what you think about this. I’ll give you time to read this, because it’s unfair since you probably haven’t seen this.
This is an 87-year-old woman. She was told she needed to have teeth pulled, and so she, on her own volition — she’s hard-of-hearing, all kinds of complications — she went to an Aspen office. And you can take a look at that. But basically, first of all, they gave her $3,000 worth of deep cleanings, and then they gave her, on her list for the comprehensive care, a total bill on the order of about $18,000. Her annual income is $15,000. So ultimately her son found out about it. She was able to get all but the $3,000 of the comprehensive treatment back.
So a woman who goes in to get two teeth pulled is on the hook for $3,000 and actually had signed on the dotted line for another $18,000, and were it not for her son going back and complaining, would have had to pay that out and on some sort of a third-party financing plan. That to me sounds like somebody is pushing a person who really can’t afford it to get a lot of care they really don’t need.
I would say that if any of the patients are unhappy, I’m confident that [if] they go back to the office that the office would resolve their concerns.
It’s hard for me to comment on what this patient’s needs are, but if she has needs, are we obligated to make sure that she understands what those needs are so she can make a decision on what she wants to do with her oral care?
Well, yes, I think that is an important obligation to let her know, but in the case of an 87-year-old woman who can’t hear very well, to get her to sign on the dotted line without perhaps somebody there advising her seems like it might be a little bit predatory potentially.
Well, I don’t think so. And I certainly hope not. I hope that the team was clear about what she needed and that she completely understood what she was getting into. And I was hopeful that, you know, obviously the team would do a good job for her.
Well, although you have to wonder if at her stage of life, if she’s really understanding what she’s getting into. And that’s the concern that was raised by her son.
Yeah. I think it’s a delicate balance. I completely understand what you’re getting at. I’m hopeful that the team presented and was clear about what the expectations were and what she’d be going through, and they were probably thinking that this person completely understands it and wanted to go forward with it. What if they did not diagnose it? What if they didn’t tell her? What if she had an infection all of a sudden that she had a problem with? I mean, there’s another side of the story.
But if there is this long list of things and there’s a toothache and kind of their head is spinning at this point and they say, “Hey, you need all of this done; sign here,” is that really a choice for somebody? Is that an informed choice?
Absolutely it’s an informed choice. I’d say the vast majority of our patients actually don’t get the full comprehensive treatment.
They just don’t.
What are the percentages? I’m curious.
I don’t know the percentages offhand. I’d say 50 percent of the patients accept treatment; 50 percent of the patients may not. And of the patients who accept treatment, they may not get all the treatment done.
But isn’t it sort of implied that if you don’t get the full thing, you won’t get the financing or the package or —
No, not at all. That’s not how it works.
But is that the way it’s presented to them at the time?
No, we present the whole thing. Of course we’re going to present — it’s our obligation to make sure that they understand exactly what’s happening in their mouth. We’ve just done a full comprehensive exam. But if they choose not to go forward with the full treatment, we’re going to help them with their emergency need.
All right. So the office managers, just to clarify that point, because their income does have a link to revenue, doesn’t it?
It does in the sense that they have to manage the whole office, so the office has to survive. We have bills to pay. We obviously have to make sure that the office can thrive and exist. And so they helped that doctor manage through, you know, those types of things.
They’ve got to sell the service. I mean, the doctor — here is the menu of services. It’s up to them to close the deal.
Yeah, it’s up to them to educate the patient to make sure the patient’s aware of what’s happening in their mouth, along with the doctor and the rest of the team, so the patient can make an informed decision. That’s what’s up to them.
But if they don’t, they don’t get paid as much?
I’m not sure about that.
Well, help me understand that.
Well, because I think —
Everything I’ve seen is that there are revenue targets in all that, so —
Not everybody has to accept the full treatment for the office to do well. They are trying to present the treatment and make sure that the patient understands what’s going on. But an office can do well if the patients don’t accept the full care.
But as you’ve pointed out, dentists are not motivated to do more than they should. Or put it this way: There’s a disconnect here between the dentists and ultimately signing on the dotted line for the treatment plan. The office managers are not dentists.
And they are there to say, “Here’s what the dentist says, and we can finance it and make this possible for you; if you just the sign the dotted line, we’ll get to work in your mouth; that will be better.” And these are people with a bad toothache. They’re at a big disadvantage, aren’t they?
I don’t think so. I think they’re advantaged because they are able to have time with the dentist outside of any worry or concern about money, that the dentist treated them in a way that doesn’t judge, doesn’t worry about their payer type or their payer mix. And many times when they’re talking to the manager, they’ll bring the dentist back in. So to the extent that they can’t afford or don’t want to go with the full treatment, then they’ll figure out how to sequence back from there to make sure what are the most important needs for that particular patient.