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VIDEO - DUwHF #881 - Steve Parker
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AUDIO - DUwHF #881 - Steve Parker
Dr. Steve Hurst was born and raised in San Diego. He graduated from UCLA School of dentistry in 1993 and married his classmate Dr. Bridget Hurst in 1995. He spent two years with the Public Health Service and four years in a Loan Repayment Program in Central California.
In 2000 Steve and Bridget returned home to San Diego with three kids in tow and currently practices general dentistry with a strong emphasis in Implant dentistry.
Dr. Hurst is a Fellow of the California Implant Institue (CII) and was instrumental in starting CII’s Live Surgical Implant Program in 2012. The program provides 50 U.S. patients a month with no cost extractions, bone grafting and Nobel Biocare implants. Dr. Hurst is responsible for patient screening, initial CBCT diagnosis, surgical instruction, post-op follow up and final restorations, which include Crown and Bridge, locator over dentures and Full Mouth Fixed restorations.
When he is not working he enjoys surfing and spending time with his wife and 4 kids. Alexis their oldest just applied to dental school.
Howard: It is just a huge honor for me today to be podcast interviewing Steve Parker from The Profitable Dentist, all the way from [00:00:13] Floyds Knobs, [1.4] Indiana, which is up the hill looking down on Louisville, Kentucky, where I spent a summer. I love that - I spent a whole summer there. Steve Parker is the Editor-in-Chief of The Profitable Dentist magazine, President/CEO of Excellence in Dentistry, founder of Dentiva Coaching & Consulting, Founder/President/CEO of WhiteRock Dental. He has spent the past fifteen years coaching and consulting with dentists and dental groups on leadership, strategy and business development. Parker has spent the past three years repositioning The Profitable Dentist magazine and Excellence in Dentistry to leverage the emerging trends in post-graduate dental education. He speaks nationally, and contributes to industry journals on topics ranging from leadership and strategy to practice management systems and launching a group practice. You know, I ... the original founder of The Profitable Dentist is one of my best buddies. I love him to death. Woody Oakes. An amazing man and his ... Woody was always an idol and a mentor of mine, and Woody's idol and mentor was going all the way back to Earl Estep in Country Gold, and I think that, you know, that Earl Estep, Country Gold, you know, that Texas slang, Woody being really Indiana, pure [00:01:30] Hoosier, [0.3] me being Kansas, there's just so much golden knowledge and pearls from Country Gold, Earl Estep, to The Profitable Dentist. How's Woody doing? And give him a big shout out and some love from Howie.
Steve: Will do. And first of all, thanks for having me on - I really appreciate the opportunity today, Howard. Woody's doing great. He did suffer a little heart incident, not quite a heart attack, in October last year, and then November a stroke from that, and then for the people who are followers, who are going to [00:02:07] Destin, [0.6] Woody did a little video and announced in April that he had prostate cancer, or excuse me, prostate cancer, and he was being treated for that. So, normally prostate cancer isn't a big thing but when you kind of triple whammy it on top of heart problems, stroke, spending time in the hospital and you're seventy - he turned seventy last Sunday - it's just a lot, so. He has recovered very well. He's back up and around every day, and we keep him very involved here at the magazine. He still writes a column, 'Words from Woody', and I keep him involved as much as I can in podcasting and seminars. So, for a guy who's seventy and has taken a lot of hits like Woody, he's doing pretty good.
Howard: Well, you tell him if he's ever got five, ten, fifteen minutes to come on the show, it would be great to see him.
Steve: Will do.
Howard: I just love that guy. What would you say though, you know, podcasters, when we look at Dentaltown, there's a quarter million dentists on there. When we ... when Steve Jobs stuck the internet in the smart phone, we come out with the online app, now sixty thousand dentists have downloaded that, but they seem to be mostly born after 1980. It looks like Millennials are on the app, the old guys are on the desktop. But a lot of these Millennials would look back at the last thirty, forty years, and say, Earl Estep, Woody Oakes, Howard, they graduated decades ago, during the golden years, and...
Howard: ... dude, those guys don't apply anymore because now dentistry has got corporate, they got a bunch of student loan debt. What would you say to a Millennial says that the golden years were three to four decades ago, not now? What would you say to that?
Steve: I think there are elements of that, and I agree, I think there are elements of that that are true. You and I both talk to dentists every day. I talk to a lot of dentists who will call me and they're sixty-eight, you know, the ADA just did a thing last year that said ninety six percent of dentists at age sixty-five are not financially prepared to retire. And I think that's right, anecdotally, from what I hear. So, I think that generation, and maybe let me draw this distinction, I think there are two things. One is that generation saw themselves as a dentist first; the younger generation sees themselves as a business person first. I talk to young dentists and they will spend as much time in their, definitely fourth year, a little bit in their third year, and very intensely the first and second year after graduation, looking at how they run their business. They'll understand [00:04:39] EBITDA, [0.3] they'll understand [00:04:40] AOR, [0.5] they'll understand hiring, firing, those sorts of things. So, they understand that they are in a business. The older generation, I think, you know, again I'm not a dentist, Howard, so I can't draw those conclusions, but I think as far as clinically, you might find that the older generation spent a lot more time and developed their clinical skills to a much greater degree, where the younger generation understands, 'I'm in business, I'm gonna spend my time on that. My clinical skills are enough'. So, I think there's [00:05:16] [SOUND DISAPPEARS]. [0.1]
Howard: Well, you know, I think the Millennials are focusing on business more now because thirty years ago you could come out of dental school, make a lot of bad mistakes and still be successful. But today, with that type of debt load, you know, you really can't make too many major mistakes when you come out of school, I mean, you've got to hit the ground smarter than you did thirty years ago.
Steve: Yeah, I would agree with that. Your cushion for error, and I have consulted with a lot of practices that are ... the dentists are okay dentists, they're good dentists, and they make a lot of money and they do extremely well. But I really do think both groups - if you want to group them - and I have five kids, you know, I own five Millennials - there's a lot to learn about them, and learn from them. It takes a little bit, but I think that both groups have a lot to learn from each other.
Howard: Well, if you have five kids you have to be either Catholic or Mormon.
Steve: That's right. Well, it's my second wife, so, I brought three to the deal and she brought two. So, it all worked out really well.
Howard: Nice. I got four. Best decision I ever made. Four kids, that's so amazing. So, what would you say to - let's focus since this is a podcast, they tend to be more Millennials - what do you think are the ... if she's driving to work right now, and she said, How could I learn to be a better business person, how could I learn to be a more profitable dentist, what is the low-hanging fruit of the better decisions that she needs to make that so much that thirty, forty years ago wouldn't have been as important?
Steve: I think the low hanging ... first of all, I think the access to information is so much greater, you know, what you and I are doing right now, we couldn't have done, you know, a decade ago. We would have, you know, we would have had to spend some money, got on a plane, go to a seminar and talk to somebody, talk to a bunch of dentists and then find some dentists who are saying, “You know, what I'm going to tell you about is how to run your darn business.” And that may or may not have been of interest to you, but it just didn't exist, you know, certainly a generation ago. You know, the iPhone is only ten years old. So, access to that kind of information, quickly and easily, just is a new thing. So, the first thing would really be when you, you know, the conversations that I have with dentists are, “Let me see your PnL”, and most of them will hand me their tax return. And I'll say, “No, no, no, you know, that's the adjusted thing, that's the thing that the accountant has …” You know, I had an accounting professor at Indiana University that said, Accounting is organized fraud! You know, that's what we want it to be. “Give me your PnL, what really happened in your practice, or a cash flow statement.” They have no idea what that is. Younger dentists understand that, and they understand they're going to have to buy a practise, so, they jump into it, they Google search what the heck is a PnL, or, what the heck is EBITDA, you know, an incredibly valuable piece of information you should know every month in your practice, most dentists don't know. What is EBITDA? Why is it bad for my AR to be really high? How good should my AR be? You just Google a question like that and you'll get, I don't know, two hundred and fifty-three thousand answers, where a generation ago you got nothing. You had to call your accountant, who charged you two hundred bucks an hour to kind of explain it but not really and move on. So, that's what the younger generation, they just gave access to those tools, so, you know. I get a lot of questions from them that are really smart. They'll ask very pointed questions. You know, what percentage should my AR be, what percentage of revenue should my AR be? Well, you know, ten years ago nobody ever asked that question. All they asked was, “How do I get more new patients?” So, for the Millennials, I think, they go into it kind of knowing they're in a business and in the business of dentistry.
Howard: You know, the complete Western Hemisphere, North and South America has a billion people, and Africa has a billion people, and I think when that Internet hit the cellphone and became a smartphone, now you've got five of the fastest growing economies in the world in Africa. They're sitting there reading Wikipedia and their crop yields, you know, have gone up, I think, like, fourfold since 2008 just on learning how to farm on their Samsung. I mean, it's just ... I think 2008 to 2108 is going to be humanity's finest century just because of what you just said, the access to information. I mean, you know, that's why I do this podcast, to put something in her head as she's commuting to work for an hour, you know I mean, as opposed to listen to the toxic news about all these depressing, you know, international events, North Korea just fired another missile, I mean, you know, they need to stay focused. But you're right on your accounting. What did you say your accounting professor said, accounting is an organized fraud?
Steve: Accounting is organized fraud. So, he would say a good accountant says, you know, I'm trying to ... a bad accountant says, “Two plus two is five”; a good accountant says, “Two plus two is four”; and a great accountant says, “What do you want it to be?”
Howard: Well, that is the next level accounting, I mean, you know, when I got out of school every dentist used an accountant that, you know, the dentist was their only client, and after the dentist got off the phone with them, they were talking to a dry cleaner, a corn farmer, a dairy farmer, and they only knew accountants for tax accounting, for the IRS.
Howard: Unless they probably traded the, you know, the [00:10:45] SCC, [0.5] but they still are ... they're just now waking up to managerial accounting. It's like, my accountant shouldn't be a yearly event to tell me how much taxes I owe, my accountant should be specialized in dentistry to help me look at this dashboard of numbers and make some better managerial decisions based on these. How would you recommend a young dentist learning managerial accounting?
Steve: I would say there are two elements of accounting. One is, you know, the accountant who looks in the rearview mirror and tells you what happened and files your taxes and says, “Here's how much you owe.” I'm a fan - you know, I'm an entrepreneur by nature - I'm a fan of an accountant who comes to you in October and says, “Okay, where do you stand now? And we have ninety days to do something about that. So, if you stay on pace with what you're doing, you're going to have a tax bill of $52000 come January 1st, and there's just not a darn thing you can do about it. Once you cross over to January 1st, by April 15th or March 15th, and if you're a corporation, you're going to pay this money. But here we are in October and you have a little cash in the bank and you might need a new piece of equipment. Let's go ahead and buy that equipment in this year, you know, for this purpose 2017, and let's take the full depreciation now and let's cut our tax bill from fifty-two thousand to twenty-two thousand. Let's do a couple other things that minimize that tax burden.” So, what's easy for business guys to understand, you know, what we're taught at business school, what dentists aren't taught, is that amount of money can be changed dramatically. So, when a great accountant says, “What do you want it to be?” Making money is not such a good thing, if I don't have to borrow money, if I don't have investors, if I don't have any outside interest, if I'm not sharing dividends, you know, I want to break even, or maybe lose a little bit for several years, because every dollar I make, I'm giving Uncle Sam a piece of it. So, let me make as few as I can. So, a good accountant comes to you in October and says, “Let's look at your year, let's see where you're going to be and let's do some things now while we can before, you know, the ball drops in Times Square and then the door closes for that opportunity.” So, and I think a lot of younger dentists understand that. They do more tax planning and understand that every dollar of profit on January 1st, you're giving Uncle Sam a piece of that when, you know, not to get into the politics of it, I think the dentist practice-owner has a better handle on how to use that money than Uncle Sam might have.
Howard: I've read some of your articles where you talk about being ... that dentists make being the owner and leader of their organization more complicated than it needs to be. What do you mean by that?
Steve: What I mean by that is, dentists - I have a lot of good dentist friends that came out of dental school and they're very clinically trained, very bright, understand the clinical practice of dentistry. But then they have this thing that they're wrapped in, called their business, and they just struggle with making it so complicated and I'll sit in meetings and talk about accounts receivable, for example. Accounts receivable is just kind of a loan to customers or a loan to insurance companies, usually interest free. It's really that simple. So, any money that's sitting in AR is work you've done, a service you've delivered, but money you haven't collected. Howard, I walk into practices that have a year or a year and a half worth of AR sitting on their books. That means that's a year's worth of work you haven't been paid for. And if it's that high, it didn't accumulate, you know, last week; it accumulated over years. So, it's money you're probably - a lot of it - you're never going to collect. And just that fundamental understanding is a struggle with dentists. They, you know, somebody else is taking care of that, and, well, obviously they're not, but they should be. Talking to patients, communicating with patients. What I always tell dentists is, Imagine you're the patient, you're in the chair. Is this the kind of thing you want to hear? Is this how you want to be treated when you walk into, you know, I'll walk into a lot of reception areas and they have furniture from the '80s and they have, you know, it just, it's very dated and somebody is about to ask you for a lot of money. If you were walking into this, or your family, or your wife and kids, would you feel comfortable saying, Oh, yeah, I hear what you're saying and yeah, I want to pay, you know, $4000 for a treatment plan. So, really internalize it, make it, you know, just think of yourself as a customer. And what's surprising is a lot of dentists don't, I mean, they just don't do it. Sometimes we'll get out of the car, I'll say, “Let's just walk in. We're a customer right now. Let's just walk in.” And they'll see that ratty old sign and they'll see the grass is, you know, overgrown and they'll see the shrubs need trimming and they don't see it as the dentist, as the guy going in every day, but as the customer, you know, it's pretty simple stuff. So, I think like that, just the mechanics of business, and that's simple customer relations, the mechanics of business, they over-think, they make it ... they think, Wow, that's too complicated. You know, back to your point, they call the accountant, instead of going onto Google and saying, you know, “How high should my AR be?” or, you know, “What is a customer acquisition cost?”, or “How much should I spend on marketing?” or anything. They just think it's too complicated and, you know, they have the front desk person to do it.
Howard: Yeah, I mean, do you ever watch Shark Tank?
Steve: Love Shark Tank. You know, Mark Cuban is on there and he went to Indiana, so, absolutely.
Howard: Oh, did he? Really.
Steve: Yeah, yeah.
Howard: And Mr. Wonderful out of Canada. I mean, what's amazing though, is almost every dentist that you talk to couldn't even answer any of the Shark Tank questions. Like, you know, Mark Cuban, you know he's going to say, Well, what is your new patient acquisition cost? Every dentist will say, What? What is your average revenue on a new patient? What? You know, what is your return on asset, return on equity? Tell me something about ... what are you going to do with the money I give you? Uh, I'm going to go learn how to place implants in the Dominican Republic.
Howard: I mean, I think dentists should just watch Shark Tank, I mean, for starters.
Steve: It would, you know, just the fundamentals that are on there. You know, if I can give you half a million Dollars, what are you going to do with my money to turn that half a million into five million, and how did I get my money back? You're right. You hit the nail on the head. It's that simple. If you're borrowing money from a bank, that's all they want to know: How am I going to get my money back and how do you keep it secure?
Steve: But, you know, one of the biggest problems with dentistry is it's ... health care is in the same field as, like, religion in the fact that people just don't like to mix money and religion, or money and health care, and you don't want to go to church and have the whole sermon be on you need to give us money, here's our overhead, here's the bills, but they need money. It's just very hard for ... so many dentists, I mean, they hate to "sell dentistry". They don't want to see it as a business, they want to fix your broken tooth. They don't want it to tell you that it's going to cost a Dollar and you need to pay me today. How do you change their mindset, that if, that they, you know, the ADA says the average dental office has sixty five percent overhead? So, if you did a Dollar of dentistry and you didn't collect the money, you paid for that dentistry, you paid the rent, mortgage, equipment bill, computer, insurance, labor, staff hygienists, you paid for two thirds of that dentistry that wasn't collected because you didn't collect the money. It's actually one of the largest drivers of overhead is the collection policy and they just don't want to talk about the collection policy. It's taboo. How do you try to get a young Millennial to say, I know you didn't go to eight years of college to be a salesman but it's not a four letter word and you have to start seeing this as a business?
Steve: I think Millennials, you know - again, you know, I own five of them - so, one of the fundamentals of a Millennial is they need to feel they're connected to what they do, and they need to feel it has an impact and has meaning. So, what I generally try to get them to understand is, you're not selling dentistry. You are suggesting a service that's needed. Now, don't tell them they need something that they don't need. Just tell them what they need, and I promise you, you will find enough. Treatment plan what they need, and you will find enough. And then let them decide. And when you communicate it, I always say, it's desperation selling, you know, and maybe you've probably never seen this. There's a dentist who desperately needs ... he's, you know, got some tax bills sitting unpaid, payroll is coming up, he didn't take a paycheck the last time, he's got a big case sitting in the chair and he just has to have it. There is such a sense of desperation with that patient, that the patient feels it, the staff feels it, and it's not what the patient needs - it's kind of what the dentist needs to survive. And you just have to get past that. Just do your job. Propose what they need, over and over and over. Follow the routine and then let them pick, and if you do that enough during the day ... I always have practices measure proposed treatment versus closed treatment and have that number in their ... they need to know it every day but certainly every week and watch that numbers stay steady or go up. And what they'll find is, the more that they propose, the more that gets collected, or the more that gets done and collected. Don't, but don't spend your time trying to force something down a patient's throat that they don't need. And I think Millennials are good about that. They need to feel like they're saying, Gosh, Mrs. Jones, you really need this, when she does versus feeling like, Gosh, I need to make a mortgage payment and I've got payroll coming up. I think they're pretty good about that in general. I work with a lot of them from the beginning. I speak at a lot of dental schools and they do seem to have a little bit better bead on that, maybe, than some of their, you know, their counterparts my age.
Howard: So, let's talk about dental schools. I mean, obviously it doesn't make sense to get out of high school and work at McDonald's for twenty years to save up and go to college in cash and graduate debt free. Obviously other people's money is a great use of leverage to go to school, become a dentist and then pay back that loan with doctor’s wages, as opposed to saving up for it in retail fast food wages. But, when ... do you think there's a limit? I mean, when you come out of school $350000 in debt, do you think that at that point you have to stay with other people's money and buy a dental office in order to have the cash flow to pay that off in a reasonable period of time, like a decade or less? Or do you think she should go to a big corporate dental chain or be an associate of some dentist and just pay down debt for three, four, five years?
Steve: I think both can work. I think if you come out and you feel ... first of all, a lot of business is just about competence and enthusiasm. As a leader, your staff and your team looks to you for leadership and part of leadership is competence and enthusiasm. So, if you're not excited to come in every day and you take the hard decisions, you just take them, they're tough, you make them, we move on with our business, your team will suffer. So, if you struggle from that, you need to be seasoned a little bit, and if you think that's clinically, work for a larger ... work for corporate dentistry, hone your clinical skills, but at the same time kind of hone your system skills and your process skills and your procedures skills and, you know, in dental school you have half a ... you have all morning to do a crown prep. When you're in your own practice, man, it is coming at you, and the worst thing you've got is a really full schedule and you're really successful because you've got, you know, you've got a crown prep coming at you, you've got something coming at you all morning long, you've got to be on top of it. It takes a little while to learn that routine in any profession, but especially dentistry. You know, very few people come in thrilled to come to the dentist, and if it's something restorative or they're in pain, you know, they're not happy to be there to begin with, and, you know, so there's all that emotion. That's a lot to throw a person who just went through four years of dental school into. So, I think it really depends on what you're comfortable with. If you are comfortable clinically, then understand you're going to go into business and start spending your time building your business skills. If you're not comfortable in either one, there are a lot of options today that didn't exist, you know, a decade ago. You know, when you get out of dental school, how many corporate dentists, how many corporate dental organizations could you go to work for if you wanted to? I mean, did you know of any? I mean, they just didn't exist. Today they do.
Howard: Well, they actually did exist and then they imploded. There was Orthodontic Centers of America. It was big, it was the only one that ever made it to the New York Stock Exchange, and then it spectacularly imploded. There was a dozen on Nasdaq and they all went away. And then there was a sleeping dog for a decade and now they're all back. But, you know, I tell these kids when they go work at Heartland or Pacific or Aspen, I'm like, “That company, you know, supports and organizes five hundred dental offices. How could you not learn business?”
Steve: Right, right.
Howard: I mean, you have ... they have access to an office manager, that office manager has access to a regional coordinator, that regional coordinator has access to Rick Workman, the CEO, or Steve Thorne, the CEO, or Fontana. I mean, how ... I mean, you, when you come out of school, you need to practice. I mean, you should be able to do all of your requirements in dental school, now you could do that every single month and get proficiency in your basic what is a block, what is a tackle, what is a pass, what is a receptionist? You know, you're not going to learn some complicated flea flicker play but you're going to get your base down, but I see so many smart dentists taking all those Heartland policies on Word document and just changing, you know, Heartland Dental to Joe Harry's Dental Office and saying that they learn more business there. I mean, as opposed to, say you were an associate at a single office, you know, obviously a one office location could not be as business savvy as a five hundred dental office location, I mean. Do you agree with that or not really?
Steve: Yeah, I think the key thing to keep in mind is, you know, back to the Mark Cuban thing, the Shark Tank thing, businesses are built on a model. So, here's the interesting thing, Howard, as a business guy. Very few businesses are revolutionary, they change everything. Steve Jobs and Apple, he changed everything. There's one. You know, you and I could probably spend an hour, and, you know, drink a beer and come up with half a dozen. Most businesses follow a model. Dental practices are not rocket science. You work for Heartland and you figure it out, you figure out here's what the front desk does and says, here's how they process paperwork, here's how they file an insurance claim, here's how the treatment coordinator functions, gosh, if I just do that from my practice and maybe my associate two years from now and my next associate five years from now or three years from now, that's a pretty good business model that nets you a profit, which is what you're really about. At the end of the day, you have more money coming in than going out. You can't work for one of those companies and not learn a lot about cashflow, about business period. They are not spending more money than they're bringing in. So, if you just understand what they do and why, you know, it's a great model. Then, you know, decide to go out on your own, put your own spin on it, your own particular flavor to it, in your own particular town, and the business fundamentals are already there. So, you don't invent anything.
Howard: So, when you talk to most dentists, or you look at dentists' overhead, you look at their accounting, the number one category that gets out of whack is always the biggest expense, labor. Do you see a lot of high labor, what do you think the causes are, what do you think labor should be, how often, in your experience, is labor ... are they paying too much for labor?
Steve: So, I'll walk in and usually, you know, part of what we do with our brand, The Profitable Dentist, is, you know, I like the word 'profitable', meaning you bring more in than you send out - you're right, overhead or labor is number one. Usually it is a misunderstanding of, in my opinion, the roles of the people you're hiring. You know, the right people in the right chairs. If I have a front desk person and I have a certain volume of business, I have a lower volume of business, that's a front desk person slash two or three other things. If I have grown my practice to, you know, a million two, a million five, I have room for a front desk person and that is his or her job, period. They need to be the best at it. So, if they move on to something, you know, if I have a treatment plan coordinator and I have six hundred, seven hundred, eight hundred thousand, treatment coordinator is also doing something else. But when I hit 1.2, 1.3, 1.5, that's their sole job and I have an expectation of them. What I usually find is there are two or three people at the front desk. You're doing eight hundred and fifty, nine hundred and fifty thousand Dollars, you have three people at the front desk. One of them is the main front desk person, one of them is her niece, and the third one is a part-timer who's our niece's friend. At the end of the day, again from a business perspective, I'm going to look at a metric, and a metric basically means what does every other business in my area doing. So, if they're spending twenty percent on staff, why am I at thirty two percent? How come they can do it with twenty, and I can do it with thirty-two? And, nine times out of ten, I'm going to find it's because I have people in positions who have grown into it and really, I just, I have too many people, or I have a poor job description of what I expect of these people, so, I have two or three people doing something that really one person could do.
Howard: What do you think labor should be?
Steve: It really depends on your, I think, depends on your area. Again, I'm going to pull a metric. If I'm in San Francisco, I mean, I'll see labor in the twenty to thirty percent range, and it's very geographic specific. But what I like to see is somebody who is hitting this area, you know, Louisville, Kentucky area, hitting that average or if they're ten percent over that average, they know why and they're okay with it. They're okay with it because it's a person that's been with them for a long time and they know they're just overpaying them, but not just drop that back down and say if the average is twenty six percent, I'm going to be at twenty six percent, period. It's okay to be at twenty-eight or thirty, if you understand why you're twenty-eight or thirty. If you're twenty-four and you're struggling, maybe there's a reason. Maybe you're underpaying the person that you have. So, what I've seen in really every aspect or every percentage of a dental office is, there are a lot of geographic factors and there are a lot of practice-type factors. So, if you're, you know, even high overhead is okay if you understand it and you're profitable.
Howard: So, you know, when I got out of school, you know, labor, you know, everybody said labor should be and percent and now a lot of people say labor should be twenty percent, but thirty years ago I would send Delta a claim for a thousand Dollar crown and a thousand Dollar molar root canal, and they would just pay the percent. Today they send me the fee schedule and these PPOs are generally about forty percent less, so you could almost say the number one overhead in dentistry is the adjusted production between your fee and the fee that the insurance is going to pay you and a lot of these dentists, you know, are signed up for ten, twelve, thirteen different plans and the fee for a filling might be anywhere from a hundred to two hundred, and you got to say, Well, you know, what is your overhead and what would your overhead be on this procedure if you're getting paid half the amount for this procedure than another insurance company. Could you possibly be making money at both fees when they're literally, you know, double?
Steve: Right, and...
Howard: Well, so, what are your views in PPOs in general, and some offices, you know, they're twenty percent Medicaid and you look at this high overhead, then you look at the sliding scale of reimbursement from the PPO, then it drops off the cliff for Medicaid, you know, what ... how do you think they should get their head wrapped around PPOs and insurance and all that?
Steve: Great question. Again, I'm a business guy, so, I look at things in terms of what I call ratio management and the beauty of ratio is there are one, two or three variables that I can adjust. So, the ratio of PPOs, if I have, you know, let me back up, I'll say, I'll go in an office that has eighty or twenty PPOs. They're taking them all and the first thing we do is we'll dig into it a little bit. And, in fact, we just did an article in the magazine about this and how to take fewer PPOs - and it doesn't mean draw a line and hack them - what it means is to understand what you get from each one. I'm taking eighteen PPOs. I start to look at it, and three of them usually I have four patients that that's all that is on them. We expected more, we hoped for more and it hasn't happened and three years later. It's, you know, that's a bad conversation to have with your patient, but it's a good conversation to have with your business. You just need to find a way to transition them to filing their own claim. It doesn't mean you don't take their insurance, it doesn't mean you don't take it, you know, you've had this podcast a hundred times, but it's a way that you can say, These I need to carve off and say I just ... we don't take them anymore. And then you take the ones that are your highest - in business you call them A, B and C, the 80:20 rule, eighty percent of my income probably comes from twenty percent of my PPOs - identified those, move them to the side and don't touch them. Those are the ones that we're just going to stick with. And then we're really looking at the rest of them. At the end of the day, Howard, what happens is, if I go from thirty percent to forty percent write off on this big bundle of PPOs in the middle, the big variables, the ones that I'm going to look at, if I just keep taking them, I've got to produce another twenty to twenty five percent more just to break even next year, or not take them. So, what happens in a lot of cases is it's more profitable to not take them and spend your time marketing to that, back to the 80:20 rule, the twenty percent that are paying eighty percent of your production and collections, it's better to market to those people and just, you know, just the rest of them to say, “We don't take your, you know, we don't file the claims. We'll work with you. You can file it and try to find a better way to work with them.” But at some point, if your average is down in the sixty percent, fifty five percent range, which a lot of them are, yeah, it's your biggest expense and it won't get smaller, I can tell you that. It won't go, you know, they're not going to come to the next year and say, Hey, we're going to reimburse you seventy five percent instead of the fifty five percent we have been.
Howard: So, a lot of dentists are trying to move towards an in-office discount dental plan instead of ... what do you think of in-office discount dental plans?
Steve: I like anything that keeps the office from carrying the debt. There are a lot of them out there, a lot of them are being developed. I know there are a lot of State laws about them and I would ... what I generally advise is check with your State. Some of them haven't worked out so well. Some of them have. Any way that you can keep from carrying that debt or that account in-house, I'm a fan of. So, any kind of a third party, anything [00:35:16] that's yourself and [0.8] you pay somebody to collect your money for you, I'm a fan of. You be the dentist - don't be the bank. When I go in an office with fifty percent of their revenue in AR, they're a bank - they're a bigger bank than they are a dental practice.
Howard: What do you think of if she's working for Aspen right now and she wants to own her own office one day and she asks you what practice management software do you like? There's a lot of other companies that have dental dashboards, like Dental Intel, Practice by Numbers. Do you like any of these practice management softwares more than others? Do you like or promote any of these dashboards?
Steve: I do. There are several that are really ... that are developing on a handheld device and, you know, as we talked a little bit ago, the iPhone is ten years old, it has changed the way people work. I'll tell you this, when I drive in from Floyds Knobs every morning, driving down the hill - we're about five hundred feet above Louisville, you know, you said you lived in Louisville. I look over Louisville every morning - when I drive in, one of the first things I do is open up a little app on my phone and I see how we did yesterday - and I own several businesses. I see how each one did, and I see how product sales went. If we're doing a seminar, we're doing our, you know, annual seminar or even some small micro-seminars, I see what the sign-ups are. We, obviously, we sell a lot of product, a lot of CE product, I look at all that on a phone, as I'm coming in, or drinking coffee, or sitting at lunch. That's a thing you couldn't do a decade ago or a generation ago. You would get a stack of papers on your desk every week that said, you know, here's how we did this week, and you'd flip through it and you'd circle some things and you would ask for some clarification. You can do that any moment of any day now. So, I'm a fan of a lot of these, Practice in Your Pocket, any of these small apps that put it in your hands, that as a dentist keep you on top of your business. So, and there are a lot of them out there. But, and I think there will be a lot more next year and a lot more the year after because it's just the way that we work and we function now, you know, we didn't do that ten years ago. We, you know, we said, Hey, how are we doing today? and the office manager said, Man, we're slammed. We're doing great! And we felt good and went home and, you know, we were losing twenty percent and, you know, not paying payroll taxes.
Howard: So, if you're driving to work, a lot of them find my guest by, they follow me at twitter @HowardFarran. So, I'm going to retweet your last Twitter, so they can find you there. You're @Excel (E-X-C-E-L) InDentistry, ExcelInDentistry, and your website is TPDMag, for The Profitable Dentist magazine. So, TPDMag.
Howard: What would my homies find if they went to TPDMag?
Steve: Well, today what they would find is a lot of our past issues. They would find a lot of our CE products. One of the things that I'm trying to do with the magazine, Profitable Dentist magazine, is - and, by the way, one of the reasons that I love it when I got here and partnered up with Woody, was the idea that a dental practice is about making a profit and that's not a bad thing. You know, you said earlier how 'selling' is a bad word. I think a lot of dentists think that making a profit is a bad thing. And what they would find is the magazine. So, what I'm doing is transitioning that into online content. Believe or not, we have about five thousand pieces of content, whether it's audio, video, pictures - we have a lot of pictures from the past. I showed Ryan a couple of what we started. He said, “You absolutely have to show my dad.” We have tons and tons and tons of content. So, what we're going to be doing is putting that online in ... as kind of an entertainment. Part of it's educational, part of it's entertainment. I believe you should have both. We should have a lot of fun when we work. What they will also start to find is more interactive content. A lot of like you do on Dentaltown, CE content, message board type content, things that will help you become a better business practice owner as opposed to just a better dentist. It's also being a great dentist, but if you're in practice for yourself, you need to understand that, you know, you've got to make a profit or, you know, you're not going to exist very long. So, that's what they'll find. That's what they'll find there. We roll this out fourth quarter of this year. We've been working on it for about two years. It's a lot larger task than I thought it was when we started. We have an extraordinary amount of content which, I think, you're a part of from years ago at our seminars and in our magazine, and, so, that's what we hope to give people.
Howard: A lot of dentists, when they think of a profitable dental office, they think the staff should have a bonus system. What are your thoughts on staff bonus systems?
Steve: I like the word 'incentive' much better than a bonus. I like ... I have sort of a fundamental with incentive plans and that is it comes out of new money. So, I don't like the bonus out of what we're doing now. I like the staff to create something new. So, if we're, you know, if our average daily production is ten thousand, and we want to bump it up, I'd like to pay a percentage in incentive to make that an average of twelve every day. So, we can just ... we can predict it. And I think staff is really good at finding creative ways to do that, if you let them. So, I'll pay them a percentage of that extra as an incentive to make our average day twelve grand instead of ten grand. So, but number one, it has come out of new money. I don't want a bonus for what we're already doing.
Howard: Nice. Because if you give a bonus out of what you're already doing, you're just raising your overhead.
Steve: Well, they'll sit around and say, Hey, how did we do? You know, are we getting our bonus? I don't want them sitting around and saying, "Do we get it or not?" I want them saying, you know, “What can I do to make that bonus happen?” And, you know, they say there are three kinds of people: people who make things happen, people who watch what happens and people wonder what the hell happened. I want people making things happen and I'll reward them greatly for it. Especially in a dental practice. So, that really is a measure of what we're already doing and then make a, you know, not to use an overused term, a big audacious goal. And if we hit that, then everybody shares it. It's a big deal. You find your new normal. You know, now you're ... you know, it's no big deal to be hitting twelve thousand a day, and, what do you know, a year ago you would have killed for that. But today, just what you do.
Howard: Do you see any trends in the more profitable dentist than you see in the least or less profitable dentist, in terms of, like, say, your office hours or your type of equipment you do or the type of dental procedures you offer, like Invisalign or implants? Take that one by one. What about office hours? Do you think...
Steve: No, I think ... so, I'll step back a little bit and wrap that up into one thing. The trend I do see is, and again as a business person, is somebody trying something. So, what I know is that if you do something different, you're going to get a different result. Try it. If it doesn't work, don't do that again. You know, understand why it didn't work, measure it, don't do it again. If it did work, and it worked a little bit, if you're, you know, if your production jumped three percent, figure out why that is, tweak it a little bit, and make it five percent. But I think that, you know, here's the interesting thing, Howard, I could sit down ... when I started this business in the dental business about fifteen years ago, I sat down, and I did exactly that. I said, “What are successful practices doing?” What I found was, they're doing everything, across the gamut, and I think it's because the owner is engaged, interested, enthused, again has the confidence to be the person in charge, and they're doing something different. Now, if you're happy with what you have, keep doing it, and you're going to continue to get what you're getting. But, my early consulting would be somebody who would call and say, "I need a bunch more new patients and I need them now because I got payroll in two weeks, you know, and I didn't take a paycheck this time." Number one, you're miles too far down that road. We can't fix that quickly. And one little silver bullet isn't going to do it. But what does happen is, when the owner gets involved and engaged and interested and everybody sees it, I promise you something good will happen. They say anything that is watched and measured will improve. So, just watch it. If it's your office hours, you change them a little bit and production goes up. You did a good thing. If it doesn't, do something different.
Howard: If she's working right now, as an associate, like, say, we always argue about corporate dentistry but, you know, most associates are in private practice, but...
Howard: She's an associate right now and she wants to have her own office. How important do you think demographics are?
Steve: I think it's important if you measure it against what you want to produce. So, and I know I've listened to you in the past on kind of suburban or rural practices and I agree with you wholeheartedly. I came from a very small town in Indiana and the physician, the dentist, all the professionals there had a great business, great practice - and some of them still do! It's thirty-five years later. I'm an old guy - I'm 56 yesterday, so...
Howard: And I'm 55 today.
Steve: Yeah, I know. By the way...
Steve: We're having a co-birthday party right now.
Steve: Yeah. I want to take ... we're going to deviate for two seconds here, Howard. By the way, I forgot to do this at the beginning. I told everybody here I was talking to you today and it was your birthday and they said, "Holy cow!" So, somebody ran out and got you something. Here we go. I have props. By the way, I saw you do your Chris Griffin interview and he had props, so I figured props are safe. So, I have this. Can you see this?
Howard: Yes. Ah, thank you.
Steve: Happy Birthday! I think we're about a year apart. I'm fifty-six.
Howard: And I turned fifty-five. The speed limit is fifty-five.
Steve: There you go. Happy Birthday.
Howard: Same to you.
Steve: But, you know, if ... I think it really is all a measure of your circumstances. So, if you are comfortable living in a rural area and you come into it with your student debt and you're paying your nut, your overhead and you have a little left over, you're doing the right thing. I think the problem in dentistry is when that doesn't happen, and dentists start to tinker, and they are behind or they're negative and they continue that for a year or two years, five years, ten years, and they, you know, to the point that they're in a big hole that they can't get out of. So, I think it really is ... I don't think there's one true answer to it. I think, again there are people who survive in small towns or people who do, you know, there are docs that make ... that take fifty grand a year home and they're on the corner of, you know, on a busy corner of New York City. I don't understand it. And there are docs who bring home five, six, seven times that and they're in a town of twenty-five hundred people in, you know, the middle of Indiana. So, you find your rhythm, but at the end of the day, it's about looking at the numbers and more came in than went out, and it's repeatable every day - you have a good business model - every day, over and over and over.
Howard: Another big source of stress especially since, like, say thirty years ago we had indemnity insurance, you just sent you fee to Delta for a clean, exam and x-ray, and they paid a hundred percent. Now they're sending you the fee. In Phoenix, the average hygienist makes $40 an hour and the average PPO insurance fee for a cleaning is fifty-five. I mean, when you're paying someone $40 an hour to do a $55 cleaning, that's tough. So, a lot of dentists wonder, Should I be doing my own hygiene? Is the hygiene department just take it as a loss later? Should I have hygiene assisted, where I have the hygienist work two chairs with a helper, an assistant? Because the dentist doesn't set up the room, seat the patient, that the dental assistant does. And when the dentist is done doing a filling, he doesn't break down the room, clean it and reset up. So, what's your thoughts on the hygiene department in general?
Steve: What I see is, and, you know, again as a magazine, we see everything. You know, I see articles coming across every day, I see people who are doing lots of interesting and amazing things every day in the world of sole practitioners and in small groups. So, I think the hygiene department drives, and I think it's right. Hygiene department drives restorative dentistry. I think hygiene department in the next twenty years, can drive a lot more. And there are a lot of people experimenting with a lot of perio treatment in a hygiene department that, you know, we're not doing today, that may not be billable, may not even have an insurance code today, but it's certainly a treatment and I think, again, back to your Millennial question, you know, there's a lot going on with oral systemic health. I see those articles come through every day. Some of them I can get, you know, some of them I can get my mind around, some of them I can't, some of them are a little too far out. I think we take it one step at a time, but I think the fundamental of the hygiene department is it is, once it grows beyond just cleaning teeth to a focus on oral health with Millennials, I think they get that, understand that, and you have a connection with the customer as well as a patient that brings them in and incrementally instead of just, you know, saying, "Hey, I've got a hygienist, I'm going to bill X Dollars an hour, you know, every hour of hygiene is worth a hundred bucks, and if I'm writing that down to seventy five, it's worth seventy five and I'm paying her forty or forty five, that's all I can make on hygiene." I think that's all you're going to make. I don't think - my personal opinion - I don't think speeding up hygiene helps you. I think it complicates your schedule. I know docs who do it very well and, you know, I'm glad they do. I think the average office will struggle with that. But I do think there's more to be generated in that one hour of inventory, where a patient is sitting in a hygienist's chair, that could help you with your practice, that is very rapidly evolving - and most of it comes from the oral systemic health kind of movement, we'll call it.
Howard: A lot of people say numbers. They'll say, “You know, eighty percent of dentists this and ninety percent of dentists that”, and I always say, “Can I see your receipt on that?” And I never, ever receipt. It's always some gut feeling. And Dentaltown, one of the features on a thread is, if you start a thread, the first post you can create a poll and there's, you know, people have been creating polls and you can just switch over to ... there's even a link for just the polls, to go back in and read, and you got to remember that when they're trying to tell you who is going to be the next president of the United States, these big places, Gallup, would only survey maybe twelve hundred Americans and they'd be plus or minus three percent, so, when you look at the fact that there's only two hundred and eleven thousand Americans alive with the license to practice dentistry, a poll of three hundred is more significant than you than you realize. But every time there's a poll on practice management, it says, “What issue bothers you the most?” Every single time it's staff. I mean, if you ever ask a dentist, “What makes you just get nauseous?” “Staff.” “What makes you want not want to drive in to work?” “My hygienist.” You know, I mean...
Howard: So, and a lot of that is natural selection because to get accepted into dental school, you had to have the personality of a scientist or an engineer or an accountant, to sit in the library and knock out A's and calculus and trig and geometry and physics and bio-chem, you weren't that guy in a fraternity and playing and being in all these clubs, and you weren't that guy - you were the introvert scientist. So, now you have this natural selection of these introvert mathematicians and physicists, and the staff just makes them just ... it's the most stressful thing on every poll. What would you say to a dentist who's struggling with staff?
Steve: It's part of the deal. That's it. It's part of the deal. It is, you know, and I was trying to think of the Steve Jobs quote when you said that. You know, he said, if you want to be liked, you know, sell candy. You know, don't be...
Howard: Sell ice-cream.
Steve: Sell ice-cream, that's it. Sell ice-cream. Don't be an entrepreneur. Howard, I have had businesses my entire life. From telecommunications infrastructure to utility power to dental practices to dental labs to dental magazines to dental seminars, and top to bottom, start to finish, even ones that are humming and the best place to work, you have employee issues. For you, the dental owner, it is life and death. You are ... you know, what I always tell dentist is, “You are the only person that is going to be in this business of yours from the first day to the last day. Now, if you're lucky enough to have an employee that sticks with you that whole time, that's great! But odds are against you. Doesn't mean they don't love you, doesn't mean they're not good people, doesn't mean they don't care about you, but it's their job. You want to find out how much they love you? Tell them, you know, they're not going to get a paycheck for next month, and, you know, they'll find another job. You don't have that option. You're stuck with it. They can.” So, it's just part of the deal. And if you, again if you engage and you understand what they want, they, I think staff wants to do well. They want to enjoy coming to work. There are some days they're just not going to. They want to enjoy the patients. There are some days they are just not going to. They want to enjoy, you know, they love to have health insurance. Some days they are just not going to have it. There's always going to be something. So, you know, the only business that I know of that has no unhappy employees, is a business with no employees. So, it's just part of it. The better you are working with them, the good days, the bad days, the days you got to be firm and, you know, make difficult decisions and dab into conflict and deal with it directly, get on with it and move on, the better you're going to be. But, you know, it's part of the deal.
Howard: It's so true. I mean, you look at some of the greatest [00:54:27] people, [0.2] like Vince Lombardi. I mean, you look at Vince Lombardi, I mean, that was not a pleasant guy to be around with, but he made the team the best. Steve Jobs. I mean, the only way you could describe him would be an asshole...
Howard: ... but he changed the entire world.
Steve: But he loved it.
Howard: Even Jeff Bezos, the founder of Amazon, says if you never want to be criticized, for goodness sakes, don't do anything new.
Howard: I tell dentists, “If you want a friend, get on Dentaltown, you know, they'll talk you through, they'll to try to re ... get you pumped up.” I mean, staff are people and people are wild homo sapiens, they're animals. And, I mean, I've seen [00:55:03] staff, [0.2] where you present to the whole staff how high the overhead is, how it's completely out of line, how labor should be twenty-eight, it's thirty two percent.
Howard: You explain the whole thing and then, when it's done, the hygienist follows the dentist back in the room and asks for a raise.
Steve: Right. Yeah.
Howard: And the dentist is saying, “Did you just hear any single thing that was said?” So, yeah, staff are not your friends. Everybody who's going to get a gold medal in the Olympics needs a tough-ass coach. And if you want your coach to be your friend and feel sorry for you because you didn't sleep last night because your wife just had a baby, then you're not going to win a gold medal, you're not going to win the Super Bowl. You need someone to push you and you have to be comfortable with having uncomfortable conversations. But, you're right, they want to be a friend. And, by the way, when you mentioned ice-cream, I want to tell you something pretty funny about ice cream. So, one day I was lecturing, and I happened to be in the town where ice-cream was invented, and I went to the museum, and then I didn't think anything else about it. Then, about two or three years later, I was in another town and they had a museum that was where ice-cream was invented. And I want to tell you that I've lectured so many times ... I've been to three museums in three different cities where ice-cream was invented. So, don't believe everything you read on Pinterest, Facebook or even if it's a museum.
Steve: Howard, I like ice cream. So, I'm a fan of all of them.
Howard: Oh, my gosh, it's so funny. So, then I got to ask you the next question. If I said, “If you could have ... if I could wave a magic wand and give you one thing, what would you want?” And this will be the last question. You've been so sweet to be with me for an hour. But they always say [00:56:35] they want new patients. [1.4]
Steve: This is it, Howard! It's to be on with you, on a podcast.
Howard: But they always say, I want more new patients. What would you tell them, what's hot and what's not in getting new patients?
Steve: I really do feel an evolution in dentistry. I really do. I think that ... I call them later, you know, later generation dentists, you know, newer generation, mid-career, new career, mid-career, late career. I really do think there is a sea change. I get a lot of calls from dentists who say, Hey, I listened to, you know, this. I heard you talk about AR, I heard you talk about transition planning, I heard you talked about saving for this. They understand, late career dentists understand, they're not going to sell their practice to some, you know, dentist out of school for three or four or five times what it's worth and, you know, ride off into the sunset. I think they're getting that. That is becoming clear and they're asking the right questions. They're saying, “Okay, I'm fifty-six. I want to retire at sixty-five. What do I need to be doing now that I haven't done in the last thirty years or forty years?” And then, with young docs, I get a lot of them that are fourth year students, that we'll sit down, and we'll have a discussion about a strong balance sheet. I can tell you, ten years ago, if I even said 'balance sheet', most dentists would, you know, smile and shake their head and be polite, and have no idea what the hell we were talking about. I do feel that change. So, the one thing I would look for is just, is already happening. Understand that, you know, I've said it before, dentistry is an interesting profession. Nearly ... for a generation, nearly one hundred percent of graduates from dental school were going to be an entrepreneur. They were going to be a business owner at some point in their career. But they never trained to be a businessperson. So, they got out. They spent ten years, they finally got out of their practice debt, they did two or three bad associateships, now they're on their own, they're fighting a practice loan, which is way bigger than their student loan. And, you know, they've got twenty years of struggle - and I have a lot of friends who spent twenty years and are just happy to finally get that behind them. You know, the newer generation learned that. So, for the magazine, I see that every day. I see a whole new change, so, you know, and you probably have the same situation. You know, my readers are a whole ... I have to cover both sides, I have to cover the late generation that really thinks they want clinical and they want new patients, but what they want to know is how can I retire and what should I be doing now at fifty-six or seven. And then I have a young generation that says, Hey, I want to start a practice and I do not want to rack up anymore more debt and I do not want to struggle for ten years. What should I be doing now? And, you know, I think it's a pretty great time in dentistry. So, I think it's already happening.
Howard: When I look at retirement, there's another uncomfortable conversation these kids don't want to hear, and that is love. I mean, just because you love someone, why do you have to get a lawyer and write up a contract and get married. I'm telling you, the difference between married to one girl, to divorced once or twice or three times, is the biggest factor on your retirement age. And I just, you know, you need to get a contract and get married when you bring a human into this planet. But if you're all lovey-dovey, lovey-dovey, and someone keeps pushing the contract in front of you, like, “We need to wrap this up.” You know, “Well, if you love me, why do I need a lawyer?”
Howard: So, you know, I'm all for marriage when you're going to bring a child into this world. But if you're not bringing a child in this world, it's a racket and whoever makes the most money, aka the doctor, is going to pay out a ton of money. So, that's another factor.
Steve: [01:00:31] [INDISTINCT] [0.4] in dentistry, yeah.
Howard: You told me you had a picture of me. You said you found a picture of me.
Steve: I'm struggling here, Howard, I'm going to tell you. I had one. So, I had ... I was trying to figure out like this guy ... I don't know if you can see that. You know who this guy is? This is Destin. One of our Destin seminars. Who's that handsome fellow right there?
Howard: Oh, my g*d.
Steve: That was my [01:00:53] vote. [0.2]
Howard: Back in the day, I had a watch on, so that had to be before the cell phone. So, I did not have a cell phone.
Steve: But that was my vote.
Howard: Funny how the only thing I have from my Grandpa Howard is his pocket watch, and then it went to the wrist watch, and now with the iPhone, it's just a glorified pocket watch. In fact, I want to get a picture of Grandpa Howard's pocket watch and my iPhone to show you [01:01:15] what two generations have got. My [1.3] phone's back in the pocket now.
Steve: So, that was my vote, Howard, you need to know that. This was Ryan's vote, all right. I said, Hey, here's a picture [01:01:26] [INDISTINCT] sister. [0.3] And he said, Well, he doesn't have a sister.
Howard: Do you know who that is with?
Steve: This is ... I can see on here - this is you.
Howard: That's me.
Steve: Who is this?
Howard: Todd Vogel.
Steve: Todd Vogel.
Howard: So, we overplayed that. So, the joke was, it was Woody Oakes and Travis McPhee of The Profitable Dentist. So, we decided we were going to dress up and be their dates, when they were introduced. So, me and Todd dressed up like women in a swimming suit, but we dressed up so good, no-one knew it was us, so no-one thought it was funny. They actually just thought we were the girls with Woody and Travis and no-one even got it.
Steve: Well, that's what Woody said. He gave me a few things and he said, Ask Howard about this. He also gave me this. He said ... I'll show you this real quick. This is a cover of a magazine from 1992.
Howard: Oh, my g*d, can you give me a JPEG or post that...
Steve: Oh, absolutely.
Howard: ... on Dentaltown.
Steve: I'll send you a copy. Can you see this? This is ... who's this?
Howard: Wow, that was ... nice memories. What year was that?
Steve: This is 1999.
Howard: Wow, 1999.
Steve: [01:02:35] Gordon Christensen, you [5.0] and [01:02:40] Rich Madow, [0.6] I think. Woody said you guys went up to the ADA on a mission and ... to meet with them about advertising in dentistry, your business in dentistry.
Howard: We actually ... that ... g*d, I forgot all about that. 1999. Gordon Christensen, Rich Madow, Woody Oakes and Howard Farran went to the ADA and we had four complaints and, actually, like Martin Luther's 99 problems with the church that he nailed to the church door, they addressed them all. And they did. Number one was they didn't advertise. Number two was they didn't take a stand against PPO and managed care dental insurance. And number three was, oh, my gosh ... and, anyway, so, they didn't advertise, PPO managed care ... I forgot the others. But, anyway, the ADA got all into online marketing, Facebook, Twitter, you know, [01:03:43] Mouth Org, [0.7] they got all that deal. The PPO, it was [01:03:47] Ficus [0.5] was the attorney, they had like six attorneys. They launched multiple lawsuits against the dental insurance companies. Does that article say what the other two issues were?
Steve: No, it doesn't. It's ... and I know Woody's recollection was about mostly advertising. And we actually have a letter from the ADA that says, “How dare you use the word 'profitable' and 'dentist' in the same sentence?” And, you know, what he said, At the time I thought, Well, gosh, do you want to go to an unprofitable dentist? And how long is that going to last?
Howard: I thought it was amazing. There were four issues and they literally - probably because Gordon Christian was with us, if it had just been me and Woody and Rich Maddow, but, you know, I'm sure Gordon got all the credit for that - but they absolutely took us serious, and they were extremely stressful. They sat there in that meeting with lawyers and you could just tell ... because we all had a big social footprint. I mean, Rich Maddow had the ... what was his ... The Maddow Report; Gordon Christian had The CRA Newsletter; Woody Oakes had The Profitable Dentist; Howard Farran had Dentaltown magazine, and, so, they know ... what's that?
Steve: The Farran Report, at the time, wasn't it?
Howard: Yeah, it was The Farran Report from '94, 1994 until 1998, when I realized they were talking on the Internet to each other. And then, so, it was The Farran Report when it was just me sending you a message. But then, when the Internet flattened the earth and made it a two-way street, I dropped my name because it wasn't about me anymore, it was about, you know, just anybody, you know, the platform leveled the playing field to anybody that wanted to log on. And I want to say one last thing about the log on. I still get a lot of complaints about people not thinking that people should be anonymous on Dentaltown and the reason I still allow that. I want you to know that when you register, I know who you are. I have two full time employees that verify every single person. Number two, I ping your email address every month and once that e-mail address is inactive, your account's frozen till you tell me what's going on. But the reason I don't ... I allow anonymity is because I know my homies and they're not going to ask a stupid question in front of everybody in the world. You can't be an endodontist and ask the question in front of your referrals, so, what's best for dentistry is that there is an anonymous place where you can go and ask a question. But then people sit there and say, Well, I posted a root canal and the guy that's saying it's not perfect is anonymous. And I say, Well, we have a Report Abuse button. I know who the guy is...
Howard: ... and, but, you know, and if he's, you know, it's okay to say, Well, what about this? What's not okay is to say, “Well, that's horrible, that was dumb, you're stupid”, you know, whatever, but as long as you're professional. But, I think Woody is one of the grandfathers of dentistry. I think what Earl Estep and Woody Oakes did was amazing. Woody and Earl were talking about profitable in dentistry back thirty years ago when most people thought dentistry was a religion and they didn't like televangelists, they didn't like preachers asking for money and they sure as heck didn't like doctors. They'd say the sovereign profession of dentistry is about what's best for the patient not about money. And I agree entirely, until you go bankrupt and then you have to rethink that strategy. But, hey, seriously man, thank you so much for coming on the show today.
Steve: Thank you. I appreciate it. Do we have one more second?
Steve: Let me tell you one more thing. Woody wanted me to show you this. He told me a story. I don't know if you can tell, we've been in the archives the last couple days. I have one more thing that Woody told me a story about you speaking in Louisville and he didn't know when, so we did a little research. I can tell you it was in late 1990, just so you know, and you'd written a couple of books ... by the way, I have one here. You still have one of these?
Howard: Oh, my gosh! You have 'The Business of Dentistry'.
Steve: Yeah, I can't afford this, Howard. It's like a thousand Dollars on e-bay. So, I only have the cover. But he did, in the January '91 Profitable Dentist - this was when Woody printed them in the back of his office on a copier - there's a review, a seminar review - I highlighted some things and I'll send you a copy of these - it's called 'Seminar Review: Dental Mania by Howard Farran'.
Howard: Oh, my g*d.
Steve: Is this familiar?
Howard: Oh, yeah, I remember that. G*d, that was a long time ago.
Steve: Twenty-six and a half years ago. He talks about how impeccably dressed Howard Farran is. He says, “A doctor friend was impeccably dressed, shoes polished to a military shine, eyeglasses held with a gold strap around his neck. Very polished and relaxed speaker. He's very energetic and compelling.” So, there you go. Twenty-six years...
Howard: Well, I've got to give credit where credit is due. That was, you know, today we have Google reviews and Facebook reviews and Yelp reviews, that was the first and only person to write a review of my seminar. I was going around the country, when I would lecture, it'd be incredibly small crowds, ten or fifteen people, and I was ... I can't believe I started doing that. I was ... I got out of school in '87 and I started lecturing in '90. I mean, I'd only been out of school three years and I just wanted to do it to get out and meet other dentists and network, you know, throw my name in the hat, tell you what I know, hoping ... knowing that I would learn more from the audience than I would teach them. And Woody gave me a five-star review.
Steve: That ... it's the first one. Yeah, he [01:09:21] [INDISTINCT]. [0.1]
Howard: And the thing is, I don't even know what his circulation back then was, but it was huge. And I had done almost zero invitational speaking and, boom, I think I got like forty. Oh, my g*d, look at that.
Steve: There you go. There's a handsome guy.
Howard: There's a handsome guy! And, my gosh, I think I got forty invitationals from that five-star review. I mean, he absolutely put me on the map. I was a dumb little kid. I graduated in '87. I was lecturing in '90. He wrote that '91 - four years out of school, you know, when almost the entire audience would have been older than me, looking at me like, “Who does this young idiot think he is?” And Woody he gave me a five-star review, and the next thing I knew I was speaking for the ADA and the CDA and, I mean, it was just crazy.
Steve: It's this good-looking guy in a tie, right there.
Howard: Yeah, yeah. Long time ago.
Steve: I need to share these things. We spent some time going through this, so.
Howard: Well, tell Woody I need to get him on the show and I need to get Earl Estep on the show too. He's ... Earl Estep's on a farm. I've talked to his son; his son owns a lab in Dallas and he says Earl bought a big ranch and a bunch of big expensive tractors. He just spends all day making mountains and molds and re-carving the surface of the earth. But, tell Woody, love him to death. Thank you for all that he has done for dentistry. Good luck with everything you're doing with The Profitable Dentist. Go to TheProfitableDentist.com website. Steve, Happy Birthday!
Steve: Likewise, Howard, same to you.
Howard: Have a rocking hot day, buddy.
Steve: You too. See you.