Dentistry Uncensored with Howard Farran
Dentistry Uncensored with Howard Farran
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906 DecisionOne Dental Partners with AJ Acierno, DDS & CEO : Dentistry Uncensored with Howard Farran

906 DecisionOne Dental Partners with AJ Acierno, DDS & CEO : Dentistry Uncensored with Howard Farran

12/26/2017 11:36:31 AM   |   Comments: 1   |   Views: 415
906 DecisionOne Dental Partners with AJ Acierno, DDS & CEO : Dentistry Uncensored with Howard Farran

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906 DecisionOne Dental Partners with AJ Acierno, DDS & CEO : Dentistry Uncensored with Howard Farran

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AUDIO - DUwHF #906 - AJ Acierno

Dr. Alan J. Acierno is a practicing dentist and the CEO of DecisionOne Dental Partners, headquartered in Schaumburg, IL. After receiving his D.D.S. from Creighton University, he has practiced dentistry in both corporate and private environments, where he discovered the benefits and challenges of each practice. Compelled with a vision to make a difference in the way dentistry is practiced, Dr. A.J., together with his brother and fellow dentist, Dr. Michael Acierno, founded DecisionOne Dental Partners in 2011.

Over the past five years, DecisionOne has grown to 19 dental practices. As the company continues to grow, DecisionOne remains dedicated to the mission of changing the way dentistry is done to improve lives.

Howard: It's just a huge honor for me today to be podcast interviewing Dr. Alan Joseph Acierno who's a practicing dentist and the CEO of DecisionOne Dental Partners, headquartered in Schaumburg, Illinois. Isn't that where BISCO is headquartered too?

Alan: It is, it is. We do a lot with BISCO.

Howard: Man, I love that guy, Byoung. It's Byoung Suh?

Alan: Yeah, yeah.

Howard: I just love that guy. After receiving his D.D.S. from Creighton University, he has practiced dentistry in both corporate and private environments, where he discovered the benefits and challenges of each practice. Compelled with a vision to make a difference in the way dentistry is practiced, Dr. A.J., together with his brother and fellow dentist, Dr. Michael Acierno, founded DecisionOne Dental Partners in 2011. Over the past five years, DecisionOne has grown to nineteen dental practices. As the company continues to grow, DecisionOne remains dedicated to the mission of changing the way dentistry is done to improve lives. And, you know, to have nineteen locations, I mean, not even one tenth of one percent of all the dentists who ever lived had nineteen locations. And, so, I mean, you're just wow! I mean, talk about a unicorn riding the tooth fairy! And you're the only person I've ever met who did a TED Talk. I love your TED Talk, and that's why I called you to be on the show, and I was wondering, do you think right now, before we start talking, we can just insert your TED Talk?

Alan: Yeah, I'd love it. Yeah, go ahead.

Howard: That was just a great TED Talk. So, now we're back, after the TED Talk. So, tell me, first of all, your TED Talk was ‘Healthcare has lost its soul’, by Dr. A.J. Acierno. Tell us about that talk. What was going on in your journey? What made you go out and do a talk like that?

Alan: Well, first I was invited to do it and I was privileged to be invited. What happened is that I have a passion for healthcare. I've always had a passion for healthcare. I don't know why. I mean since I was little I was ... that's what I love. I was going to Creighton, I was doing osteoporosis research, and I wanted to be a physician. And I saw what was going on with the world of medicine and I was just, kind of, disenchanted with it, ended up getting out of that. My brother was in dental school. My brother was like, "Hey, man, try this out!" Got into it, loved it. It was actually, "Holy cow! I actually make somebody better when I, you know, when I do something. This is terrific." Really, my passion has been growing probably since 2007, 2006. My passion has been growing about healthcare and the fact that our healthcare system is broken. It's broken on many different levels. It's broken on the federal system, it's broken on the private system, it's broken in our soul, and my whole entire objective going forward is to make sure that I try to change that, see if I can do something different. Trying to do it in dentistry, it's not easy, but that's our main focus.

Howard: Well, I completely agree. I mean, healthcare all the way back to the witchdoctors, who you would go to and they'd make you a lotion and a potion, was a doctor/patient relationship - and now it's a doctor/patient/insurance relationship. It's kind of gone from a twosome to a threesome.

Alan: Yeah, absolutely, and if we're not too careful, it's going to be a doctor/patient/government relationship.

Howard: And what do you think about that? What do you think about that?

Alan: Well, the only thing I can say, everybody always asks me this, and, you know, I sit down with a lot of politicians, a lot of politicians since my TED Talk have been asking me questions in regards to it, and my answer is this: if we make any decisions, any decisions that we ever make, and the result of those decisions is that whatever decision we make is worse, then we've got a problem. Healthcare has gotten progressively worse in our country. It was a country that everybody used to come to to get the best healthcare possible. You know, I see rankings all the time, and this and that. I mean, we're hovering in the mid-30s in countries. We're one of the worst industrialized nations in healthcare. I mean, if that doesn't speak volumes to the decisions that we are making, I'm not quite sure, you know, who's looking at what, but it's not going to be good.

Howard: And it's the same in education.

Alan: Yeah, absolutely. I mean, our education ... we keep having the same bozos making the decisions that keep making our system worse. I mean, I never understood - if I'm the CEO of a company, Howard, if I go ahead, or if I'm a dentist in an office and I screw up a patient's tooth, that patient fires me. I'm gone. In the world of politics and our government and the people who are making decisions, those people are allowed to screw up, and what do they do? They get promoted. It is really ... it's crazy. And that's why our healthcare system is the way it is. That's why our education system is the way it is. And we need to do something about it.

Howard: Yeah. Carter ... I mean, the Department of Education was started by President Jimmy Carter in 1979 and we were basically Number 1 in the world.

Alan: Yeah.

Howard: And ever since we've just been going down, down, down, down, and what does every new president try to do? Oh, give it more money! And I'm just sitting here looking at it, saying, "Well, dude, it was perfect before you started the Department of Education." I mean, wouldn't the first thing you do is just close down the Department of Education, so you can get Washington D.C. out of my State and my city and my town. And let us innovate and figure out what's the best way for our people to educate their children. Not having some Washington D.C. 3,000 miles away from Phoenix telling us how to teach a first grader?

Alan: You know, Howard, you bring up a good point there, and the one thing that I listen to right there is the word 'money', right. You know, profitability and making sure that a business is strong, that's always a positive, right. The problem is that, in many cases, medicine, education, now dentistry unfortunately, when people see an opportunity to make a lot of money for themselves, they jump on it. And sometimes they don't have the passion - not sometimes, most of the time - they don't have the passion to actually continue what was great or what made that field great. All they really care about is, "Now, how can I get rich off of this?" I really worry about that in dentistry. I call myself a small fish, because, listen, I'm not going to grow as fast as these private equity run groups. I'm not going to grow as fast as some of these other huge, large conglomerate dental companies. And the reason is because there are things and pillars that we are going to stand by, that we make sure that we never leave. And we have to keep focused on that. Listen, if I was a dentist that wanted to go ahead and make a flip of a company in five years, and become a millionaire and go ahead and retire, then you base your company differently than you do right now and how we do things in our company.

Howard: Okay, so, you got out of school in 1997, from Creighton University. Now it's 2017. Twenty years later – two decades. How has dentistry changed from when you entered the playground to where it is now? Is the playground better today than when you found it?

Alan: The playground is not better, I would say. The reason why is this: back in that day, there were two things that have changed since 1997. One, and really only one of those, and I say in my TED Talk, only one of those are really important, right. Back in the day, insurance was an arm's length away, okay. Now, it's in your face. Back then the consumer required something different. The consumer ... actually, most consumers cared about the type of dentist, the relationship that they were going to have with that person fixing them. And now it is, patients want to make sure that cost is down, make sure that their quality, they just don't put up there on the list, you know. Can I get in fast? Can I get out of here fast? Is it going to be an inexpensive product? It's changed quite a bit. And now the insurance company has done crazy things to our field, by the decrease in reimbursement, whether it's small or whatever, the decrease in reimbursement has created a massive problem within our corporation. What happens is that we have marketing, H.R., I.T., all these aspects that a dentist has to deal with, and basically, they keep on hiring people, keep on hiring people, as we get decrease in reimbursement. Well, it's not rocket science! That means you've got to see more people. And when you see more people, the quality and the patient experience decreases.

Howard: In your nineteen locations, are they like Aspen where everyone looks the same and they're all the same, or de novos with a cookie cutter approach, or are they not de novos, but mergers and acquisitions, where you're rolling up? Are you rolling up existing practices or are you rolling out a de novo, cookie cutter, franchise formula like a McDonald's or an R.B.'s?

Alan: Everything that we do is on an acquisition level. And what I ... so, this is a personal experience. I've had a lot of CEOs of dental companies telling me I'm crazy. So, I'm going to tell you something that is different. When I look in an acquisition, I look at the people first, and I look at the culture that's within the practice. Those people in that practice are worth more than anything that I'm buying, okay. They have relationships with the patients, and I firmly believe that. Suzie at the front desk, Betty the dental assistant - those are the most important people that are part of that practice. When I go, and we do an acquisition, if those people aren't coming along for the ride, I'm not interested. The whole aspect is because I care about patient relationships. I think that is the Number 1 aspect of healthcare. I think that is the Number 1 aspect if you're growing a practice. And, so, that is extremely ... so, you're going to go into every one of our practices and you're going to see a completely different scenario. It depends on where, the geographical area that they're in; it depends on the type of dentist that's in there; it depends on the people that he or she surrounds themself with. It's different.

Howard: So, you don't change the name to DecisionOne Dental?

Alan: No, we do not.

Howard: So, do you call yourself then a dental support organization? Are you a DSO?

Alan: Yes. I would say DSO, yes, yes.

Howard: As opposed to a DMO?

Alan: As opposed to a DMO. I mean, there's ... you know, those words are thrown around quite a bit. I'm a member of the ADSO, which is a great support dental organization, ADGP. I'm also on the board of both of those. You know, anybody that is really above a five-practice facility, that is managing other practices, is a DSO.

Howard: So, why did you choose to do a roll-up, where you get a line of credit and you went out and bought nineteen - and you're coming up on twenty locations, as opposed to a roll-out?

Alan: In Chicago it's a little bit different, right. We've seen ... so, here, let me give you a little bit of background, let's go all the way back to 2007, 2005, when I was looking at maybe our first practice, our first satellite practice. If I looked at ten practices, seven of them were million Dollar practices. I look at twenty plus practices a month, and I would probably say that we see less than three of them - two, three at most - are million Dollar practices now. The fact is that dentists have gotten hurt, you know, and there are a lot of dentists after 2007, 2008, said, "Hey, I need to ride this wave a little bit longer." They didn't grow their practice, their practice decreased, the amount of patients that are in the practice are not enough to actually do a ... you know, not enough to just keep him as a location. So, what we do is, we'll roll them up into one of our locations, if necessary.

Howard: Yeah, dentists' income peaked in 2008 at $211,000 a year and now it's gone down about 3,800 a year for the last decade, and now they're down to 174. Every single year, the average median dentist makes less money than the year before.

Alan: Howard, let me tell you a little bit of a quick story. I was at a conference about two months ago and we had two senators within the conference and they were talking about pay of dentists, they were talking about insurance and all this, and the opening conversation - the opening conversation - when we talked to them, their question was, "Well, how much does a dentist make? What are you ...?" So, we told them the average of what's happening in the United States and they looked at us straight-faced, and said, "Wow, man! Well, you guys can get a pay cut then." So, we're not even on the same level playing field as what our politicians and some people are thinking. We're actually in a whole different world, you know. They look at us and say, "Well, you're making a lot of money, therefore you guys deserve a pay cut. Why would we go fight the insurance companies for you guys, because you guys are already making a lot of money. So, what's the difference?" It's really a sad reality of what's happening. Two is that I think it's creating poor decisions by dentists. I mean, look at the average - $261,000 is the average debt that a dentist is coming out with, right. I mean, let's call it ... let's get the facts on the table. The fact is this: if we are decreasing the amount of money that we are making per year as a dentist, that means dentists are finding more things on patients in order to make sure that they can get those ... they can pay that bill. No one likes to talk about that. That's ... I hope that doesn't happen. But the fact is I believe it's happening, and if we don't get this in control, what we're going to end up with is a lot of ... with a decreased patient experience, a trust factor that is poor with dentists, and we need to upright, you know, we need to upright that. I think group practice is the way that you upright it. That's how I found myself in this position. I love private practice, man. I thought private practice was awesome. The reason we started this group was I had a decision to make. My decision was: man, can I ride this wave out until I'm retired and get out of here before I'm punching a time clock for somebody, or can I start something that's actually going to change the way dentistry is being done, and try and take this train that we've already seen in medicine and try to get it into a different direction? That's what I'm trying to do. And I said it, the hard part is that I'm a small fish compared to a lot of other people, but I can never go off those values. I've got to stick by those values no matter what, and that's what we've got to do going forward at DecisionOne.

Howard: You're in Illinois, and they haven't paid their dentists or doctors, or they haven't even had a budget in how many years?

Alan: Yeah, if I ran my group for one day like Illinois runs their government, I'd be out of business in about the first fifteen minutes, you know. It's terrible. It's a sad reality. We are seeing an exodus of people out of Illinois, and Illinois has a lot of great things to offer. But we need to change some things within our government here.

Howard: There's dentists on Dentaltown in Illinois that the government, the State Governor of Illinois, owes them over a million Dollars for dentistry they've done on their employees, and they still haven't got paid and they don't know if they should keep doing it or just cancel all those patients. I mean, is that just insane or what?

Alan: It is. I mean, unfortunately that ... I don't even want to tell you what the State of Illinois owes us, you know, it's a ... yeah, the reality is that they're not paying their bills, you know. And then patients suffer because of it, because there are a number of locations out there that I know of that are not taking State employees anymore.

Howard: Yeah, it just seems like, I mean, I'm 55, it seems like government effectiveness and management has been going downhill ever since I started paying attention to politics high school. I mean, it seems like politics has been going downhill as long as I can remember. It seems like every next president is worse than the one before.

Alan: You know, Howard, I'm not a ... I haven't engrossed myself in politics, so I only know what I know. The best way I can explain it is something that me and you understand, it's dental school, right. When you're going through dental school, you got all these guys and women that have been in dental all their life, and they're not changing. And what they know is what they know, and they're not going to look outside the box, they're only going to do the things that they know how to do, right. And dental schools hopefully today are a little bit different, but that was my experience going through dental school. And when you leave you go, "Oh, my gosh, there's a lot of things that you can do out there!" And, in the way I look at government is, you got the same people, the same problems, the same people that are thinking in the same box, creating the same issues day after day, but they're getting fat and rich, so, therefore they're not going to change anything.

Howard: So, you say, you look at twenty plus practices a month. What is your sweet spot? If you've looked at twenty practices a month since 2007 and you've only bought twenty - you have nineteen locations now, but you're closing on one on Friday - so, twenty a month for ten years, so, that's twelve ... I mean, how many have you looked at?

Alan: We started looking at about twenty a month about, I would say, twenty-one months ago.

Howard: So, what do you see ... why ... if you're looking at twenty a month, why did you pick that one. What is the sweet spot? What are the numbers? What are you looking for?

Alan: First and foremost, the dentist. What type of dentist is it?

Howard: And you want that dentist to stay with you?

Alan: I would love it. I think that would be terrific.

Howard: Is he contracted to stay with you if you buy him? How long does ...?

Alan: No, absolutely not contracted to stay with us. That is that is decided before we even start the process. So, basically the first thing we do is sit down with the dentist. I think one of the best things in our company is we have twenty-eight dentists - we've only had one dentist leave us to go back home. A dentist that came to us after dental school moved back to Michigan afterwards. Great guy. We miss him a lot. But he's the only one.

Howard: So, you have twenty-eight dentists in twenty locations?

Alan: That's correct.

Howard: So, most of them only have one dentist?

Alan: So, normally we have one dentist. We are ... our dental locations, Howard, again different - a lot of CEOs look at me like I'm crazy. Our operations, our offices, are Mom and Pop, neighborhood locations. That's what they are. They are ... when you walk in, it is Sue at the front desk and Sue has always been there. That's what we want. We want to create those relationships with the community. Now, let me ... I'm going to go off on a little bit of a tangent here, Howard. This is the major issue that dental students have to understand, okay, that is going on in dentistry. I say that we want to be a community organization. We want to make sure that doctors are first, and patients are first. We say all this stuff, right, and basically, Howard, I've heard even some people on your podcasts. I hear it all the time. Every single corporation, every single dental DSO is saying the same thing, "Oh, yeah, we care about this, we care about this!" What a dentist has to do - especially a new dentist - they have to understand how to vet these groups out there for those that are saying it and saying it, as compared to those that are doing it. When I have a new dentist and I go in for an acquisition, I will tell that dentist, "You are allowed to call any twenty-eight of my doctors, any of them. I don't care. I'm not even going to tell you who they are. Go look them up and call them. If they tell you something bad, I want to know, because I want to make sure that they're happy. I want to make sure that we're doing the right thing. So, you can call anybody you want." Howard, I would encourage you, I would encourage anybody, come to any single one of our practices, we want people to see what we're doing, and I want dentists to come and see what we're doing, because it's a difference between what you're saying and what you're doing, and, hopefully, we're doing the right thing.

Howard: So, why does ... like, how old was the average dentist that sold to you? And why did they sell?

Alan: So, we've had, let's see, like eight dentists that have sold that are in their 60s, and said, "Hey, listen give me a year", right. You'll have to ask them, but I think they're pretty happy. And a year turns into five years, a year turns into three years. And they just keep doing it because all of a sudden, we've taken away a lot of the headaches, and the love of what they've always liked to do comes back to them and they get a renewed passion. And that's why they stick around. I don't force any doctor out. I don't have any, you know, like, we want to make sure that they're happy, and if they're happy, we're happy.

Howard: So, is it because you think they're wearing too many hats, they're overwhelmed, they just want to do clinical and they want some help in marketing and I.T. and other stuff like that?

Alan: I think it's two major things. One is - and a lot of people like the joke about this, but this is serious - I think the drama within a dental office wears on people, okay. I think it wears on men and women. I think the second thing that occurs in dental offices is that, when we affiliate with an office and all of a sudden now there's collaboration with twenty-eight other fellow doctors that are going through the same thing, man, out of their four walls that they've known just for twenty-five years, it's a renewed, like, "Holy cow! I didn't know that you guys were going through the same problems I was. Oh, my goodness!" You know, it's a collaboration aspect that we really pride ourselves on here, that I think they enjoy. I think they enjoy an outside help coming in and saying, "Oh, man, I didn't think about that. I think we can do something like that." So, I think that helps.

Howard: Oh, absolutely. I saw that with Dentaltown in 1998, when a dentist could log on after work and share a crazy, insane story and then twenty other people say, "Oh, yeah, absolutely been there, done that."

Alan: That's right, absolutely.

Howard: So, when I think of drama, I think of H.R. So, what is the drama? Is it ... what is drama typically like?

Alan: You know, drama ... here's the whole thing, and this is probably the biggest tip I can give you, and this is the tip when we go teach at the dental school, this is what we say: drama is because of expectation. Expectations aren't delivered to the team members. As long as team members understand their expectations and the expectation for them to be successful, then the drama decreases, right. It's when ... you see, we have a unique world, you know, and I talk to a lot of CEOs of different companies besides dental. I mean, if I went to anybody that owned a, you know, my buddy that owns a sign shop, a very successful shine shop - he owns ten of them. And if I said to him, "Hey, Gary, what I want you to do is this, you're going to go in in the morning, you're going to huddle up with everybody and you're going to say, 'Hey, this is what I need done today and this and this.' I want you then to go bury your head in a room, work on a sign, don't talk to anybody. And then at the end of the day, I want you to go, 'Hey, so how did it go?'" I said, "Would you run a successful business?" And, you're, "Man, that would be really impossible. I don't know how to do that." But that's when we ask dentists to do every single day. Dentists are in there working on their patients and doing what they love. They're relying on the rest of the group to make sure that they hold the business together, and that is really difficult. That is a big headache. So, drama ensues based on that. There is an expectation factor that's not there, that has to be delivered.

Howard: Satisfaction equals perception minus expectation. And when, you know, when I go into the grocery store, when I go into Fry's or Safeway, I know where everything is. If every time I went in there, everything was moved around, that would stress me. When I come back to the dental office, I want the same hygienist to clean my teeth, you know, so. And one way to get really happy, especially with family and friends and outside of business - just lower your expectations. You know what I mean?

Alan: Right.

Howard: I've known, I've done that so much with patients over the thirty years. I mean, you have to realize that crazy Harry isn't going to floss, so just accept it, you know what I mean?

Alan: Yeah.

Howard: I mean, go to the zoo. The giraffes and rhinos ain't going to floss either! You just got to lower your expectations. So, about these nineteen locations you picked. Is there a Dollar size, a number of operatories? Do they own their own real estate? Tell me the things that you're looking for.

Alan: So, as I said, the first thing is the culture and the doctor. The second thing would be is the amount of patients that they have in the practice. You would want to make sure that you get between 1,200 and 1,500 patients if you are trying to establish a location.

Howard: 12 to 1,500. How do you define that? 12 to what?

Alan: Based on ... 12 to 1,500, and how I define that is this: based on our experience of nineteen offices and the hundreds of other offices that we've looked at, when you have between 1,200 and 1,500 patients, you can run a very successful dental practice.

Howard: But is that at their on-computer and currently on their computer, 1,200 to 1,500 people are scheduled for something like a six-month recall or whatever? Or are you talking about 12 to 1,500 charts, where they've walked in and out of this location in the last twenty-four months?

Alan: 1,200, meaning in six months you did 1,200 adult profis, maintenance, whatever. That they've gone through your re-care cycle at 1,200. So, you're probably going to have around a active, what traditionally a consultant would tell you active, around 2,100 patients. What we look at active is people that are actually coming through your practice, not people that come when they please.

Howard: So, you're talking about 1,200 people that have been to the hygiene department in the last six months.

Alan: That's correct.

Howard: Wow, that is a cool definition. So, a lot of people listening right now are saying, "Come on, A.J., why are you promoting hygienists when they get paid $40 an hour, and the PPO only gives me $55 for a cleaning. I wish there was no such thing as a hygiene department." How do you pay a hygienist $40 an hour to do a $55 cleaning with overheads at 65 percent?

Alan: You know, hygiene makes your practice, right. Hygiene is the catalyst to what goes in your chair, you know. Very seldom ... I, you know, I always look at a dental practice ... a dental practice ... you know, I practice still three and a half days a week, right. I'm in the mix. If I start seeing a lot of emergencies in a practice, there's something wrong, right. If we are proactive and we're doing the right things for the patient, you should not have a whole portion of your practice coming in with major emergencies, right. That means you're either not promoting good re-care or you're just missing stuff. So, the question is, what we want to make sure is that a hygiene department is full, therefore they are going ahead and feeding the doctor's schedule. That's important for dentists to understand that, you know.

Howard: So, is hygiene a loss leader to keep the dentist who's more profitable full, or do you think you can actually make a profit on the hygiene department?

Alan: I think you can make a profit off the hygiene department for sure. Yes. And it's an efficiency thing. We do not allow any of our ... we do not like - I shouldn't say allow, it's up to the dentist, it's up to the dentist of what they want to do. However, we would sure like to see one-hour hygiene appointments. I do not like the half-hour hygiene mills that I see out there. I just don't agree with that.

Howard: First was culture, second was a doctor, three was you needed 1,200 patients. By the way, when you look at those 1,200 patients, do you just run one code for those 1,200, or are there several?

Alan: No, yeah, we'll look at perio maintenance, we'll look at adult profis, we'll look at trial profis, you know, those are really the main group.

Howard: So, what would four, five and six be, looking for that ideal office?

Alan: Then we'll start with the team. You know, that goes into it a little bit with culture, but hopefully we'll start with the team. We'll look at the systems that are run in the practice. Now, the systems could be a positive or a negative. So, let me talk about this, Howard. So, let's just talk about collections, right. We're actually looking at a practice right now, their collections are around 85 percent. At the table we can all say, "Hey, man, that's a positive because we know that we get 98.7 percent collections in our offices. So, therefore this is going to be great. We can boost them up and this is going to be terrific." But, on the other end, it's a negative for the experience of the team members in there, meaning, okay, now you got to collect over the counter. I mean, you've probably heard of this, and you've even seen it. All of a sudden that person that's been there for thirty years, is like "Oh, my gosh, Dr. Howard never said that. We've never done that before. We can't do that", you know. I look at that very carefully - and this is why we're only at nineteen, okay, Howard, as opposed to being at sixty. This is the for sure reason: I do not walk into a dental practice and if I've got to change out team members in order for me to make it work financially, we do not do it. It can be the best practice in the world. But if I got to fire somebody or if I got to let somebody go, it is never going to happen, I walk away from the deal. The other deal is this: if I walk into a dental practice and I know that I've got to change something - what we do is we look at a dental practice, we do our due diligence, we will sit down with the doctors and we are as honest as can be and say, "Here's the plan that you are going to have going forward of things that we would like to change in your office." And if they don't want to do it, we say, "Listen, it's no harm, no foul. Good luck to you. You know we don't want to come in there and upset you." Right, and that's the way that we go about it.

Howard: And, see, to be successful you've got to be humble and hungry and hustle, and that's humble. These guys can get free consulting in the world just to put their practice up for sale to a guy like you and then have you come in for free and tell them why you're not going to buy his office.

Alan: Yeah, there's no question about it. In fact, there's a couple of practices that we have done where we have put one of our people in those practices and said, "Listen, we will teach you what we need to do. If you want to really do this then, you know, here it is. Here it is for a month. No charge to you. Here it is." And the worst-case scenario is you'll learn it and then you do it, you know. That's a big difference between learning it and doing it, as you know, but it's a ... we just want to be honest and upfront with somebody. Listen, I am a dentist. The worst thing that I can do in my career is upset the person that actually does everything in the office or most of everything, the highest productivity in the office. I mean, that is crazy. We're different than a T-shirt maker. A T-shirt maker gets sick, I grab another person and put them on the line. If a dentist gets sick, I'm not grabbing people, you know. It's a ... we are a unique operation. This is what frustrates me when I see - and I'm not saying it's bad, because I know it's been good for dentistry - but when I see private equity groups and all these business guys that are forming these companies, when I started our dental group in Chicago, there were three of us. Now there's seventeen, okay, and out of those seventeen, fourteen are not owned by dentists, okay. What frustrates me the heck is that they think they can run a dental office just like they run a T-shirt company. What frustrates me even more is unfortunately some of our colleagues, Howard, are jumping on that train because they are like, "Listen, I'm going to push all aside, I'm going to push all my ethics aside, I'm going to jump on that train because I'm going to get rich in five years and I'm just going to build this shell company." And that is a sad reality, and that is not going to help dentistry long term, you know, and that's what's going on right now. We had this first wave of DSOs, with those big, huge giants, right. And then, now, this big, second wave is going through, and the problem with this second wave is that you can build, you can amass thirty practices, you can build a shell organization - no culture, no training, no nothing - at all it is is just, "Can we hold this box ... this house of cards together for five years and flip it to another private equity and make a ton of money – twelve times X. Can we do that?" And that's crazy. That is not, like, we are hurting dentists. We are hurting patients. We are hurting our field. And it's a problem.

Howard: And that's the venture capital market. You know, put in a bunch of money and flip it in five to seven years.

Alan: It is, it is, and I'm not saying that all venture capitalists and private equity is like that. Listen, there are some really great private equity outfits ...

Howard: Explain the difference between venture capital and private equity.

Alan: So, in my ... I can just tell you what my experience is, okay. Most of the time, if you're going to VC something, and then a private equity. VC is going to be a little bit easier to the dentist, meaning they're going to be able to work with you and your vision and your passion. Private equity most of the time is looking for, "Listen, I've got a five to seven year out, okay. We are going to come in here and we're going to grow everything from what we learned from other companies and bring it here and we're going to do this." And the foot is completely on the gas. I'm not saying that's bad, because there are some private equities out there that are really good at doing that and care about the patient. I'm unfortunately saying there are a lot of private equity out there that really don't care about the patient or the dentist and just care about the investment that they're going to make in five to seven years.

Howard: So, you bought your first one in 2005, right?

Alan: That's correct. We bought our first satellite in 2005. Yep.

Howard: So, 2005 to 2017 - in twelve years you bought twenty. Where are you getting all your money to buy twenty dental offices?

Alan: So, we have a bank deal and we ...

Howard: So, you're using bank debt as opposed to VC or PE?

Alan: We use bank debt. We have a - call it an angel investor, one of our buds that about five years ago got in and helped us out to kind of kickstart it. You know, we were, kind of, at four or five offices and Mike and I had (my brother) had to make a decision, "Hey, do we really want to do this or are we going to, you know, just lay back in our vision of, hey, if we're going to really do something different in dentistry, we better, you know, let's try to do something." And five years ago, is really when we started forming the group of what the group is now. Starting our infrastructure build and then moving forward. Ever since then that's where we started using bank debt to do a lot of our financing. We do probably four or five acquisitions a year, which are just complete roll-ups - not locations, roll ups - meaning patient bases that dentists ... they can't sell. We do about four or five of those, but we use cash to do those instead of using bank debt on those things.

Howard: So, back to when you're buying an office, you talk about 1. culture, 2. doctor, 3. number of patients, 4. the team, 5. the systems. Do they all run on the same practice management system, like, Dentrix, Enterprise, or Eaglesoft, or ...? What do you run them on?

Alan: After about four to six months, we try to put them all onto a separate web-based program that we have. Right now, we use QSI as our web-based program. I'm not trying to promote anybody, I'm just saying what we use.

Howard: Is that what Pacific Dental uses too?

Alan: Pacific Dental uses version of that, but, yes.

Howard: What did they do? They bought a copy of it and then added on their own stuff for the last twenty years?

Alan: That's what I've heard and then they, you know, I think they tried to go to a web-based program, I'm not quite sure where they're at with that - going to their own web-based program. Listen, a lot of these groups what they're doing is, they're just hiring a few programmers - a few, I mean, like, fifty-four programmers. I know two large groups that are doing this, and they're just building their own system.

Howard: Fifty-four programmers on their project?!

Alan: Yeah, they're going to put in ... two groups that I know of right now, are going to put between 5 and 10 million into their own program.

Howard: Which groups are those?

Alan: I don't think I can ... I don't think they would like me to say.

Howard: Can you email me after?

Alan: I will, for sure, yes, absolutely.

Howard: Because I think it's the weakest ... like, if someone said, "What's the weakest part of America?', I'd say, "Well, it's the government." If someone said, "What's the weakest part of dentistry?", I'd say, "It's the practice management software."

Alan: There's no question about it. I will tell you this, Howard, we are working with a group down in Celebration, Florida. We're working with a group down there that is piloting a web-based program. We are their first group practice pilot base. We're working very hand-in-hand with them, really to design our own type of web-based program.

Howard: They're doing it for dentistry or just for you?

Alan: They're doing it for dentistry. We're helping them.

Howard: What's that group called? Can you tell about that group?

Alan: They're called CareStack.

Howard: CareStack.

Alan: CareStack.

Howard: And they're going to start ... when someone tells me they love Dentrix, I mean, tell me no more, because I'm not going to listen to anything you say. I mean, you have to be so kindergarten and, I mean, when it doesn't hook up to an accounting software, Quicken, Peachtree, I mean, I couldn't even ... when you tell me you love Quicken, again, you're an amateur. I mean, I use Peachtree. If I told my team, we were going to switch to QuickBooks Pro, they'd say, "You have an MBA. Are you out of your fricken mind?" And then you go onto Dentaltown, "Oh, I love Dentrix!" It's like ...

Alan: Well, what happens is this, it's a ...

Howard: It's called CareStack?

Alan: CareStack.

Howard: C-A-R-E-S-T-A-C-K.

Alan: And they're out of Celebration, Florida. Great guys, great. I mean, these are just ... these are out ... you know, what I'm seeing right now, Howard, this is a paradigm shift that I'm seeing pretty soon, okay. I'll tell you this, and our group is working with these paradigm shifts and we're small enough, see, my ship is small enough that we can move it pretty quickly, right. So, a lot of these industry leaders that want to get into dentistry and want to have these new ideas - A.I. - A.I. is gigantic right now. A.I. is going to blow up. We're working with a group on A.I. We are working with a group on this new web-based program. We're working with a group that's going to deal with our internal customers, our internal patients: how do we get in front of them in the way that they like to be in front of. These are all individual groups that we're working with, because that's where dentistry is really going to move to. The technology front of how you interact with your patients and your new patients is going to be completely different five years from now, than it is right now.

Howard: Oh, absolutely. I mean, a dentist says, "Oh, I love Dentrix." You say, "Well, your hygienist just walked out the room and dismissed a patient. She did a clean, exam and bite wings. Did you make $9.12 after taxes or did you lose $23?" Has no idea, and then says to me, "Well, do you think I should have another hygienist?" I'm like, oh, my g*d! I mean, it's just bat sh*t crazy. I mean.

Alan: What happens a lot too, Howard, that we see, is that a dentist goes from running their ... you know, the big difference, you asked me before, 1997 to today, back then a dentist used to run their practice based on, "Do I have enough in my checkbook?", right.

Howard: Right.

Alan: Is my checkbook more? Now, today, if you run your practice the same way you did, you will be bankrupt. There is no question about it that you will not survive.

Howard: Yeah. So, how do you ... so, when you buy a dental office, do you have a formula? Is it like, you know, eight times earnings, or what is your ... what do you buy them for?

Alan: No, we buy ... you know, each one of those on our list - and there's a whole bunch - and listen, Howard, I'd be more than happy to share with you are our acquisition checklist. It's not ...

Howard: I wish you would log on to Dentaltown.

Alan: I'll do that.

Howard: And, you know, we have fifty categories: root canals, fillings, crowns, insurance, DSOs, all this stuff, and just say, "I just did a podcast with Howard and these are the things he wanted me to post."

Alan: Yeah, yeah, yeah.

Howard: And I also think it would be really good, because I think, since it's got a quarter million dentists on there, it might stir up some fish in your own backyard that say, "Hey, I want to meet A.J."

Alan: You know, the deal is this. My goal in life is not to build a gigantic dental company. My goal in life is to make sure that I'm a piece to a puzzle that steers dentistry off those train tracks that they're on right now, which is the same train tracks medicine was on; and I hear from all these dentists that say, "No, no, no! We're not going to be like medicine! Oh, my gosh, medicine's too big of a business. Dentistry's small." This and that. Listen, let me tell you. The amount of money that is being thrown into dentistry right now to buy dental practices and to form dental groups, is obscene. Nobody has seen this in healthcare like it's coming in in dentistry right now. And, if we are not careful and we do not keep our eye on patients first and doctors being able to do the thing that they always love, with patient relationships, we are going to have a major problem on our hands ten years from now.

Howard: Is there a sweet spot on the revenue size of the practice? I mean, do you like to buy a practice ... does it have to be like 1 million or ... what is the sweet spot?

Alan: The sweet spot's 800 to 700. That's the sweet spot.

Howard: 800 to 700?

Alan: Yeah.

Howard: And then, once you buy the practice, how do you pay your dentist?

Alan: So, we pay our dentists 30 percent of collections, and then we have a, you know, we do a 10 percent profitability with them at the end. We do an open book system. What I mean by that, Howard, and for all ...

Howard: Will you post all that on that thread?

Alan: I'm more than happy. What an open book is - this is real, real important - is that we share our profit and loss statements openly with all our dentists. Every single thing that's in there. We do not back end the profit and loss statements, meaning this: I share profitability with the doctor, or I do this with the doctor in order to make sure that the office is doing well, whatever these groups do. Well, what they do is, they will back ... they will take everything from their corporate infrastructure and they will spread it out to all other offices, so their offices' profit and loss statement looks like they have all these expenses on there. Then they don't have to pay their doctors these bonuses at the end of the month and therefore the doctors get screwed. The corporation doesn't care because if the expense wasn't in the offices, it was going to be on the corporate overhead, so they don't care about that. So, it ends up, the doctor gets hurt in those situations. We ... the reason why I do ... why we pay our doctors the way we pay them is, we did an analysis back in 2009, 2010. We did an analysis of all dental practices that we were looking at, and we were looking at private dentists and how much they were paying themselves. And, more than, I mean, more than probably, I think it was - I forget those numbers - probably 60 percent, let's say, 60 percent of those dentists, they were paying themselves less than 30 percent. What happens is that we want to make sure that our group, and when a dentist is in their practice, that it is as much like private practice as possible because we as dentists like private practice. Private practice is great. We enjoyed it. It doesn't mean though that we can't reap the benefits of a group practice.

Howard: So, you pay them 30 percent of collections?

Alan: Correct.

Howard: What about lab bill?

Alan: No, we take care of it.

Howard: But don't you think that when you pay the lab bill, then the dentist doesn't have any incentive to watch the cost of their lab bill? I mean, if the dentist is the most expensive, staff is Number 2, lab is Number 3. I mean, what's to keep them from ...? What?

Alan: It depends on what type of culture you have in your company.

Howard: Okay.

Alan: If you have a culture where the dentist feels like they're being treated like crap, then yes, that is something that you're going to have to watch. If the dentist feels like, hey, listen, this is somebody that really cares about me and I can sit down with a dentist and have an honest conversation of, "Hey, Doc, do you really want to pay $300 for this crown, when we have a lab over here that's producing the same quality of crown for 150?", or something in that regard. Those are honest conversations that we have to come up with with our docs. They need to know why. They don't, you know, a lot of times group organizations will come in and be like, "Doc, you need to do this, and this is what you have to do, and we're taking away half of your lab, you're going to have to pay half of your lab. So, therefore, use this lab", and the doctor is like, "Well, if I'm paying half, I guess I have to use this lab." It's never spoken to with the dentist of this is why you have to do this, or this is why you should do this. That's the way we come about, that's our culture. Our culture is to get doctors not to just say, "Okay, I'm just going to do what Dr. Acierno says." I want to make sure that people say, "Hey, listen, I believe this, and this is why I believe this." And then they jump on board. Culture is a big deal. We use a lot with culture. We spend a lot of money on culture. And I think it's proven with our percentage of team members that leave our group. We are at 6.1 percent in team members leaving. It was at 4.7 percent. It's at 6.1 and I am absolutely disgusted by that. I want it down, you know, I want people to love working for us, right. I don't want to have to get rid of anybody. We want to make sure that we teach people and we give them opportunity to learn and continue to learn. I have an optimistic feeling of anybody that comes and works for our group, that they want to do a good job, that they want to treat patients well, and I'm going to respect that. And if they mess up, I'm going to give them another opportunity to try to help with that. And that goes the same way with our doctors.

Howard: So, on your twenty locations - well, nineteen now, almost twenty - of your nineteen existing locations, what is the ... will you go through the overhead line items and how much you spend on each category? Dentist, staff, lab, supplies, you know, etc.?

Alan: Yeah, so, every ... well, let me tell you this. Every office is different, okay. We treat every office individually, okay, Howard, so, I don't sit there and go, "Oh, my gosh, we have to have this", right, because that's not fair. There are practices in our group that are fee-for-service, okay, that don't need as many staff - doing the same productivity - that don't need as many staff as a PPO office that is seeing a third more patients, right. So, their staff salaries are going to be a little bit higher. I cannot treat that office fairly against that office, right. And it depends on sometimes the reimbursement factors of geographical locations. I just don't do that. I don't think that's fair for the dentist. Again, that's another thing that people think I'm a little crazy on. They're like, "Oh, no, no, no! You've got to have the ...". We, yes, we do 25 percent, we love our salary and benefits at 25 percent not including the doctor, right. I would love to make sure that our marketing costs are at 1 percent or less, because we believe that if you create relationships in the community, you don't have to spend a ton on marketing, Right. I would like our lab costs at 6 percent to 7 percent, if possible. We have ... we're pretty unbelievable on this. Our doctors are able to buy any supplies that they want, any supplies that they want, we can. Our company averages 3.7 percent on supplies. And the reason why is because recreate a culture that we explain to doctors, we have a doctor that is full time with us that looks at every single product that we use. They look at every single review of those products, and then they look at other products and see if there is something that's more cost-effective, that is just as good of a material that they're using right now.

Howard: My g*d, tell him to get on Dentaltown and post that list.

Alan: He will, he will.

Howard: Tell him I'm begging him to. So, you talk about salaries, 25; marketing, 1; lab supplies, 6 to 7; supplies 3.7. Any other line item categories?

Alan: No, those are ... listen, Howard, those are the only thing that our team members can actually affect, right. We do not like to inundate them with everything, because we want them to actually effect change, right. It's September. September is predominantly a low income month for dentists, okay. We don't have a lot of days in the month. Some doctors like to take a vacation in this month. It is a low income month. The question is, do our team members understand the effects financially on the practice? That's what we try to train, that's what we try to teach, that's what we try to get them to understand why they do what they do.

Howard: You know, it's so sad, because in order to have the budget and be predictable, we should have the lunar calendar where we have thirteen months each twenty-eight days. And the Romans, Caesar, so screwed this up by going to twelve months. I mean, February has only twenty-eight days, so, the first quarter of Wall Street every year has three less days of revenue. Well, those were three profit Dollar days. And, you know what the chance is we could get the entire planet to go back to the lunar calendar?

Alan: Zero!

Howard: Yeah, and what's also sad ... I don't want to get on a tangent here, but what's also sad is, I also hate the way the grocery stores are growing stuff in the off-season in the southern hemisphere and shipping it up here, because when I was little we ... when I was 10 years old in Kansas, which would have in 1972, everyone knew with this season of strawberries and blueberries and corn and it was exciting. I mean, you're excited to wait to Halloween, to Thanksgiving, to Christmas, and people in your school would be saying, "The strawberries are blooming, we'll be, you know", and now you have strawberries 24 hours a day, 7 days a week. So, no-one gets excited. So, there's no Christmas or Easter or Hanukkah for strawberries. So, if you pay your doctors 30 percent of collection, is it safe to say that your dentists cost 30 percent and staff 25 percent? Or does it not work that way?

Alan: It works out a little bit differently, because then you get the hygiene revenue in there, right. So, when it's all said and done, it's probably going to be around 23 percent, right.

Howard: Well, in the salary of 25 percent, that included the hygienist, right?

Alan: It could include the hygienist, but the revenue of the hygiene department ... so, you got the doctors are usually 70 percent of the revenue of the office, and hygiene is usually 30 percent of the revenue of the office, right. So, you got 30 percent of that 70 percent that they're ...

Howard: Okay.

Alan: And then, so, it ends up to be around 23 percent, right, of the total revenue of the office. And then we hope that ...

Howard: So ...

Alan: Go ahead.

Howard: So, after you pay the dentist 30 percent of collection, which works out to 23 percent, because they're doing 70 percent of the production, the hygienists are doing 30. What would total overhead goal be?

Alan: Our total overhead goal, if we can ... are you talking about a PPO office or are you talking about a fee-for-service office? This is a big deal. You know, when I was ...

Howard: Well, for both, because that's the point of intelligence. When somebody has a one size fits all shoe, you know they don't know what they're talking about.

Alan: It's crazy.

Howard: And it doesn't surprise me that a guy with nineteen offices knows that it's always: the devil's in the details.

Alan: This is the other thing that gets me crazy. When I talk to somebody and I say ... they ask me, "Well, what's your budgets per office?" And I say, "Well, what do you mean?" "Well, what do you want your office to average per month?" And I'm like, "Well, which month are you talking about?" And they'll say, "Well, we want $100,000 a month." I'm like, "So, in August this year, in August - the biggest month of the year - you're planning on doing only 100,000?" I'd say you're going to fail that month. If you tell me that 100,000 in September, then I'd say that you're doing pretty good, you know, like, it all depends. What I would say is this: 25 percent profitability at the end of the day - at the end of the day - is the best thing. Before loans, before depreciation and all that, if I can get my ...

Howard: So, you're talking about EBITDA?

Alan: If I can get EBITDA at 25 percent, we will be extremely successful in our offices.

Howard: So, 70 ... so, after you've paid the doctor, 25 percent net income EBITDA, which is Earnings Before Interest, Taxes, Depreciation and Amortization.

Alan: Before any of that stuff, we hope that we can get 25 percent. Absolutely.

Howard: Man, you are an operator. G*ddang, I wish you would ... and you have all that written up and explained?

Alan: We have it, I don't know how well-written up, Howard, but.

Howard: I really wish you would post that because this is all the stuff that's never taught in dental school. They come out of dental school, $300,000 in debt. So, let's talk about ... so, you did a roll-up, you acquired a bunch of practices, so, your twenty offices already have your dentists. Are you looking for associates join you? Or are you ... ?

Alan: Absolutely! We are always looking for associates to join us. We've actually affiliated with over forty dental practices. And you say, “Well, what happened to those other twenty?" Those other twenty, we've rolled up into other locations. So, there were dental practices that only had 500, 300 patients in their total practice, so we've rolled them up. Yes, we are always looking for associates. We're always looking for dentists that want to be a part of something different. If you're a dentist and you're looking for, "Hey, I just want the best price for my practice and I don't care who takes it over", we're probably not going to be that group. If you are somebody that is like, "Hey, listen, I really care about my patients and my practice and what's going to happen afterwards", I promise you that this is ... you're talking dentist to dentist. My brother is a dentist. We have another C-level dentist on our group. Like, we believe that that is extremely important.

Howard: Do you get mad when your brother, Michael - he's your older brother, right?

Alan: Older.

Howard: When he tells everybody that he's the smarter, good-looking one and does that ... are them fighting words when you hear that getting back you?

Alan: Well, my dad usually breaks us up. So, my dad's the CFO of the group. So, he ...

Howard: Really?!

Alan: Yeah, I'm no kidding you. So, we are a very family-run organization. We have, I think it's ten, no, it's eleven family members total that are part of our group.

Howard: Oh, my g*d, that is cool.

Alan: And everybody always thinks that's crazy, right, and it is difficult, but the fact is that when you're passionate about something and the best people that can you could surround yourself to be passionate, are those family members that are passionate along with you. I mean, our group here and our support center and our group that is helping our office, support our offices, those people are very passionate about what we do. One of the things that we do in our group too is, our org chart is very horizontal. We do not like a vertical org chart. And if you look at our org chart in our company, we flip it upside down. Top is patients, CEO is at the bottom, right. Even though it's horizontal and we squish it, CEO is at the bottom. Patients have to be Number 1, then you've got your team members, Number 2. Those are who is affiliating with our practices. Those are the most important arm to our group. Anything else is just supporting. We're supporting them, we're making them better by supporting them. It's not us in charge of them. If that's the case, man, then we're just nothing more than corporate America.

Howard: You know, Dan Carney was the founder of Pizza Hut in Wichita, Kansas, where I grew up. And when I opened my office, he's a friend and he flew out from Wichita to come to my dental office and help. I thought I was so lucky to have a founder of Pizza Hut, with 2,800 locations, in my office looking at all my deal, and he was helping me. But, I'll never forget one of the most important things he ever said to me, he says, "You know what? Every millionaire success story ever known, by the time they had five employees, they had their own in-office bookkeeper full time, getting to know their costs." And here, you know, I know your older brother is a dentist too, from Creighton but your dad's the CFO. I mean, having in-office ... you've got to know your numbers.

Alan: You do.

Howard: And when I go into ... I've been doing this for thirty years in dentistry, teaching my boys, and we'll go to a new restaurant and I'll say, "Can I speak to the manager?", and I'll just start asking them, you know, conversation, "How's it going?", this and that, and I'll ask them, like, four or five business numbers. And when they don't know their numbers, I'd tell my boys, starting when they were little, I said, "This place will be gone in a year." I mean, 80 percent of businesses fail. This guy didn't know his basic numbers.

Alan: Yeah.

Howard: And it is so telling that your dad is your CFO.

Alan: Howard, one of the things that you haven't asked me, and I'll ask this: What is, when you were saying that I was faking it, what is the hardest thing about my job? Okay, my hardest thing about the job is this, is that we teach this: people first, systems second. People plus systems is going to equal financial success, right. The fact is though, you have to look at the measurements and the finances to make sure that what you're doing on systems and people is right, right. You've got to measure it. If you don't measure it, it's not it's not worth anything, right. And what's hard is that we have a lot of team members that look at us and they'll say, "Why do we have to look at the numbers?" Or if they come from another group and they join our group, they'll say, "You know, the group I was with, all they cared about was the numbers", right. And I look at them and I say, "Well, the word there is 'only', okay. We've got to care about the numbers. You have to or else we're not going to succeed. But if it's only about the numbers, you're right, that's bad. It's got to be about people and systems and making sure you're happy. But if you're looking for a group that doesn't care about the numbers, well, you can join that group, but they're probably not going to be around long."

Howard: Yeah, when people say to me, "Well, I don't like watching the numbers", I say, "Well, I hope you like being broke!" You know, and when they say they don't like looking at the numbers, I tell them, "Well, you know what? You know, I don't like loading the dishwasher. I don't like taking out the trash. I mean, I don't say washing dishes is meaningful and purposeful to me." When I was a little kid I thought it was unfair because I had five sisters so, since I was the only boy, because my brother Paul wasn't born until I was 17, I had to do all the mowing and I thought, Well, that's racist, sexist crap. Why do I have to mow the lawn just because I'm a boy?" You can do sh*t you don't like, but you do it because you have to.

Alan: Yeah.

Howard: I mean, I had ... when my mom pulled up to the garage, I had to jump out and open the garage door because we didn't have garage door openers back then. And it was a wooden door that damn near broke my back and my sisters would giggle, but since they were girls they didn't have to do that, and they didn't have to mow the lawn. But I don't care if you don't like the numbers - you have to do it anyway. And you're self-limiting belief is what's holding you back. Learn to like the numbers. Hey, we're past the hour, but you're so amazing. Can I keep you in over time? I've still got a few more questions.

Alan: Absolutely. Go ahead.

Howard: So, on Dentaltown, you said that you are always looking for associates and then go to to contact you.

Alan: Absolutely.

Howard: Is that the best way to contact you? Through

Alan: Absolutely.

Howard: Would you give out your email address or is that too personal?

Alan: Yeah, absolutely. Mine is ajacierno - A-C-I-E-R-N-O - @decisionone -'one' is spelled out, O-N-E -

Howard: A lot of them believe that when they go work as an associate somewhere, especially for the big dogs, you know, the big corporates, that that associate contract is non-negotiable, that they just put it in your place and say, "Sign here", and that's it. And then sometimes their dad or their uncle Henry or their mom saying, "Well, why don't you go run that contract by an attorney?" What are your thoughts on associate contracts?

Alan: I would say that associate contracts have gotten so finite, right. I mean, it's gone through the legal system, it's gone through, and these things have been passed on to be passed on. The associate contracts are pretty much a lot all the same, and they are pretty darn airtight, right. So, would you need a lawyer? I tell everybody, anybody, you are going to work for a group. Make sure you have a lawyer look over the contract. Absolutely, 100 percent.

Howard: Would you post your associate contract on the message board?

Alan: Absolutely. I have no problem with that.

Howard: Oh, my g*d, you're so ... thank you so much for sharing. And if someone is listening to you in dental school ... oh, another thing they're listening to is, you know, if you're going to be patient-centric and you have got nineteen locations, a lot of them want to know, they like, "Okay, A.J., I've already got $300,000 of student loans. I'm building my practice. Is it worth all that money to buy all this fancy equipment?" You've got nineteen locations. How many of them have chairside milling, digital impression-making, CBCTs? I mean, these are majorly expensive items. What are your thoughts on expensive technology?

Alan: It depends on what you're going to use it for. And here's my view on technology, okay. If your technology is going to ... if it's kind of like buying a fancy car, if you're going to buy a fancy car because you just want a fancy car, that's fine. You better have the money to make sure that you're saying that's why you want it. If you're going to buy a piece of equipment because you want to increase the patient experience, you want to go ahead and increase your productivity of the office, then that's a whole different story. We have three CBTs in our offices and in our locations, mostly because those are the doctors that do implants. We have no digital impression and we have, I believe, two CERECs that absolutely go unused, okay. The question is, would we like to. Yes, I think digital impression is our next step with technology that we would like to expense in there. The question is, again, if you are a group that's planning on just buying digital impressions for everybody, Howard, I think you are absolutely crazy. It depends on what dentist wants it and how they're going to use it and the plan of attack for using it. That's the smart way to do it. I mean, you and I know colleagues and friends, I mean, Dentaltown, you're inundated with all those, "Oh, I've got to have a CEREC, I've got to have a CEREC!" And sits there, 80 grand sitting on the countertop, right. That doesn't make that person a bad person, that just makes ... they just made a bad decision, investment, in their practice. And that's what it is, it's an investment, you know. If you want it because it's going to look cool. Okay, that's your money, you spend it like that. In a group practice, we're not going to spend money because it's cool. We're going to spend it because it's better for the patient or better for the doctor. If it's not one of those two things, it should not be spent.

Howard: So, in nineteen locations, you got two locations with a CEREC that's never used?

Alan: Correct.

Howard: And how many locations with a CEREC where they use it?

Alan: Zero.

Howard: Yeah, yeah. By the way, you know what you need to do with those CERECs?

Alan: I'm not saying it's bad. I'm just saying ...

Howard: I know, but you know the most overlooked thing on We've had free classified ads forever and there are 6,500 ads. All your ads expire at ninety days, so when I say there's 6,500 ads, those are all current: looking for associates, looking to sell your practice, wanting to buy a practice, associates post their resumes just like they do on Monster Jobs, but it's free. But, my g*d, if you've got two CEREC's sitting there, post them for sale on the classified ads of Dentaltown. I tell everybody, I've never seen a high piece of equipment that I couldn't get half price used on Dentaltown today. And it's different between do you want to go to a brand-new car lot and drive off the car. If you bought a car in Chicago and drove it off the car lot and went to sell it, what percent would you lose, just driving it off the car lot?

Alan: It's got to be 20 percent. I don't know.

Howard: Yeah, yeah.

Alan: Someone's crushing it somewhere.

Howard: So, there was a guy yesterday that sent me an email. He's all thanking me and everything, because he didn't have the money for this and he got it on Dentaltown. He said he got it for one third of what he was looking for, and he just wanted to thank me for that. But, last question, and I hope you don't think it's rude, but I am kind of curious about it. This is the final question, and I'm asking at the end, so if you don't like the question, I can just stop the podcast. But we're in this area of politically correctness and everybody's offended and you look at some of these people in history and they find something wrong with that person and they want to not like that person anymore. You're Italian?

Alan: Yeah.

Howard: When the Sopranos were out, there was a lot of people saying that the Sopranos was a racist, sexist show that was degrading Italians and shouldn't be played. Did you find that offensive, being an Italian?

Alan: Zero, zero offense to it. Listen, my nationality happens to be Italian. Italians happen to have a history behind itself here in America, that's not great, right. So, the question is does that mean that I run from that or I get offended or anything like that. No, it's not. It's just reality and then we just make ourselves better as we move forward. I think we have a major problem in this United States of being able to not be able to say, "Listen, that was the past. Let's look forward." Our politicians have a problem with that and it starts from the top down, right. When you have somebody that constantly wants to just beat the past up and constantly wants to bring that up and incite violence and incite people to hate each other, that's a bad thing. And we have nothing but that that's going on in this country right now. And until somebody can come up and step up and say, "Listen, the past is the past. It's time for us to right now forgive and start moving forward", you know. When you start giving other people privileges to do that, then you're in a bad place. That's not a good situation for us to be in. And I think you're seeing a turn of tides. That's why you're seeing the likes of Donald Trump and the likes of a Kid Rock running for Senate. The reason why is, people are so fed up with individuals that are saying, "Well, you should do this, you should believe this." I'm a big Simon Sinek fan, right. I'm a big Simon Sinek fan and I'm a big Disney fan. Those are two things of my life, man, that I love, right. And I love learning from other people, their successes and their failures, okay. And leaders are not people that tell you what to do. Leaders tell you why, right. And if you can tell people why you want to do something, get people to believe in what you believe, they're going to follow you, right. And the aspect is we have a failure of leadership in this country, we have a failure of people being able to deliver a message of why they are that way. And that's the sad part, you know, and hopefully one day, if things go well in my dental career, that's something that I might want to do as we move forward, you know, and maybe donate some of my time to the political world from the private world. But until then, you know, it's ... right now healthcare is my passion and if I can figure out a way that government can't screw up healthcare ... you know, I always say this too, I can't believe that we put the decisions of healthcare into an organization that can't even run the Post Office correctly, right, but they think now they can run healthcare, which is absolutely the worst thing in the world.

Howard: One of your two fans, one of them was Disney. You know what I like most about Disney?

Alan: What's that?

Howard: Same thing up the street from you in Chicago is Citibank - not Citibank, Chase.

Alan: Yeah.

Howard: Walt Disney and Jamie Dimon, the CEO of Chase, live at their company. Walt Disney lived above the fire station, and Jamie Dimon never owned a car. I've had dinner with him three times, because whenever he comes to Arizona, each branch of Chase gets one dinner ticket, and my branch always gives it to me, and so I've eaten dinner with him three times, and I just think it's so damn cool. He was a protege. His mentor was Sandy Weill, Sandy, of Citibank. What was Sandy's last name? Was it Weiller or Sandy - look up Sandy, the founder of Citibank - and, but, man, when you talk to Jamie, he says, "I don't have time for a car. I don't have time after work to drive out into the suburbs of Schaumburg, Illinois." He says, "Chase is my life", and he has a penthouse up there and the dude is older than me.

Off Camera: Sandy Weill.

Howard: Sandy Weill. Read his book. Oh, my g*d, I forgot the name of Sandy Weill's book - that was one of the greatest banking books I ever read in all time. But, I think the fact that Jamie Dimon lives ...

Off Camera: ‘Tearing down the Walls’.

Howard: ‘Tearing down the Walls’. G*d, that was amazing and, you know, that was his protege. So, Sandy Weills should get all the credit, but you know what his lesson was at Citibank? He was a Brooklyn boy and he got a job at this bank and he just asked one question. He asked his boss, he says, "Well, when my mama goes to the store and writes a check, how does that check get all the way to this bank and get the money back?", and nobody could explain it. Nobody could tell, because everybody just knew one piece but nobody knew the whole big picture. And so, he started after work, chasing down, well, how does a check clear? What is the numbers? And every part of the process he walked through, he realized it was a stupid process and just made it faster and cut out steps. And then, of course, computers were coming online and, oh, my g*d, he turned this ... starting in the mailroom, he's turned this damn little crappy bank into Citigroup, and Jamie Dimon was supposed to take over and when he found out that wasn't going to happen, Chase grabbed him and it's the same thing. But it's that attention to detail and the lesson learned is, I'll go up to a dentist and I'll say, "Your hygienist just did a clean, exam and bite wings. What were the codes for that?" "I don't know." "How much revenue did you get for that?" "I don't know." Well, you're signed up for twelve different PPOs, you don't know the cost of what she just did, and you're getting paid twelve different prices? And then I go out front and say, "Hey, Doc, send out this insurance claim." "Oh, I don't know how. Shirley upfront does that."

Alan: Yeah.

Howard: So, that's exactly why Sandy Weill built Citibank and Jamie Dimon is carrying his torch. It's attention to detail.

Alan: Yeah, absolutely.

Howard: It's execution. It's hustle. It's be humble. Listening to your customers, listening to your staff, and attention to detail, and the deeper you dig into your business, the more crazy stuff - like practice management software. My biggest pet peeve on practice management software. The fact that it's not hooked up to an accounting process is a no-brainer, but the fact that I've walked into a gazillion offices and you go into the report generator and say, "What percent of these features have never been used one time ever?" It's like 80 percent.

Alan: Yeah.

Howard: When I check in a Hertz rent-a-car, the guy pulls out a Palm Pilot and just has seven steps and does it like that. And then when I go into the Hilton and she checks me in. She's got like eight steps and does it like that. You go boot up Dentrix, there's like 5,000 icons, your receptionist doesn't know what half of them mean, so, she doesn't have a process, so, she doesn't even know what they're doing. And, man, if you tell me that that's great, you have no idea what you're doing. So, thanks for the lead on CareStack ...

Alan: CareStack ...

Howard: That's why ...

Alan: Yeah, one thing, Howard, you know Disney always says, you don't build it for yourself, you build it for the customer, right. That's really a huge thing for us here. What we're doing is we're trying to create a patient experience for not what we want, not what's better for us, but what's better for our patient, tight. And what you're saying, those things that you're saying right there, can we make the checkout process - the most painful process a dental visit - can we make that better? Can we make the patient experience better before they walk in? Well, those are all majorly important things that a program has to help us with, not hurt us with, you know, and hopefully the likes of CareStack and other individuals that we're trying to help, we would love to do that.

Howard: Technology should be there to help us.

Alan: That's absolutely correct.

Howard: When you're buying technology and it slows you down and becomes a cluster sh*t, I mean, it's just crazy. And word out there to any practice management people, the Number 1 function you need to do obviously is hook it up to accounting, and, but I didn't even want to say that, because I know it's going to be some lame accounting like Quick Books or Quick Books Online that's good for a Kool-Aid stand, but not a real business. It has to be like Peachtree or something sophisticated. But, Number 2, be able to close out all the sh*t you're not going to use so that you could reduce the clutter from 500 features that 80 percent of the dental offices never use, down to a system so that I'd bring on a receptionist, assistant, hygienist, I say, "Here's our processes. Here's the seven things we do in order, and you can't go to Number 4 till you've done Number 3, and you can't do Number 3 till you've done Number 2. And this is how we check out a patient." And, you know, just keep it simple stupid to be efficient.

Alan: That is a true statement. Processes are a lost art in dentistry right now. Bettering the process is important and making sure that you look at the process, you know, is important, and that's something that ... hey, listen, that's collaboration. I don't ... I work on people. I have to go to my team members and collaborate with them to get a better process. The answer is in the real smart people that work in our group. The answer is not in my head. The answer's in their head. Sometimes we don't ask the front desk person or the dental assistant, "Hey, tell us your ideas. Give us your ideas." We just got done doing a full team member SWOT, all 250 team members in our company. We sat down with, we talked to them, "Tell me what you like, what you dislike, what opportunities do you see and what threats make you not want to do it", and you will not believe the amount of information that comes to us that we're like, "We've got some really smart people that work here and we need to listen to them a lot more."

Howard: Okay, final question. You just used a term that flew over someone's head - SWOT.

Alan: Yeah.

Howard: They're in dental school, you have to explain what SWOT meant.

Alan: We SWOT every single patient that walks in our practice, so, what it is is SWOT: strengths, weaknesses, opportunities and threats. So, basically, if I sat down with the patient, I would say, "Hey, Mr. Jones, what do you like about the dentist? Mr. Jones, what do you dislike about the dentist? If there was anything in the world that you can do to your mouth, what would you change?" He would tell me. I would say, "Then what's your threat. Why would you not want to do that, whether it's money, fear, whatever?" I want to know those things, because one, I don't want to screw up in front of that patient and I don't want to do the weakness, and two is I want to make this person better. I want to hear what they want. I want to treat people how they want to be treated, not like how I want to treat them.

Howard: Well, man, I am your hugest fan. I think the world of you. And there's two beliefs I'll never back off on: one is transparency and one is checks and balances. When, you know, Lincoln said, "Absolute power corrupts absolutely", everything has to have checks and balances, and transparency. I mean, you know, the fact that you're so humble, come on the show and tell everyone your secret sauce, what you're doing, total humility and the way you hustle. I mean, there's probably not one tenth of 1 percent of all the dentists ever that will have nineteen offices. It was just a huge honor to have you come on this show.

Alan: The honor was mine. The honor was mine. What you guys are doing and what you guys are doing for all of us dentists is absolutely tremendous. I appreciate what you guys do and keep up the good work on your guys' part.


Alan: So, when I was a kid, I remember going out and we were in public and we could see a physician or a dentist and my mom and dad would say, "Hey, listen, you better straighten up. There's a doctor over there." And if you come from an Italian family, you know that if your mom says that, you'd better do it. And so, what would happen is we'd go into the office and they would know everything about us. It was really weird. I mean, they would know what sports we were playing, they would know everything about our parents, everything about our grandparents. I actually at some moment in my life thought that the dentist and the physician were related to us. It was at that moment that I knew that's what I wanted to do. That type of relationship was what I wanted to see. So, I went to undergrad and I did osteoporosis research for four years. It was about the third year that I started to figure out, something's wrong, something's different. Instead of hearing about, "Hey, is Mrs. Jones getting better?", I started to hear, "Hey, what insurance does Mrs. Jones have? How much reimbursement do we get? How many patients do I have to see today?" It was something that I really didn't want to do. Now, there's a joke in the medical school world that says, if you don't go to medical school, you go to dental school. So, I went to dental school, and it was a little bit easier of a transition for me because my brother was there. And it was awesome. I mean, I got to make people better, and I got to form relationships. Now, in dental school, if you're ever there and you get a filling done, it takes about three hours. So, we had a lot of time to form those relationships. But what was different was I enjoyed it. And so, I go to graduate. And now graduation was a big deal for me. In fact, what happened in graduation is, you can see on this picture, this is a paradigm shift, everybody, because six years prior to this picture, those are two brothers that were ready to kill each other. And it's a paradigm shift in our family because my brother got to hood me. And I left school and my first year I was just getting my feet on the ground. I'm just trying to figure out, hey, what is this whole dental thing about. And then the second year, I started figuring out, something's missing. It's not like it was in school. There's something different and I started to study it. I really started to have a passion for it and I found something out. I found out that I was part of a healthcare system that's lost its soul. What happened was a system that was based on relationships was now based on, "What insurance do you have? How much is that going to cost? Are you in network?" What was weird was, there was no more advocates for any patients. I mean, true advocates. People that actually care about others more than themselves. Advocates of people that, they just don't put it in their name. They actually do those things. So, I was like, man, that is weird, because all my physician friends - you could take any hygienist, you could take any nurse, and you ask them, "Why are you in this?" and they'd go, "I'm in it for the patient." Well, if that's the case, and patient-centered models are all over the place, why is the system still broke? The reality is the system doesn't allow us to do it. Three things have changed the landscape of healthcare: insurance, government and patients. Let me give you a little hint. There's only one of those that really matter. Insurance. Way long ago someone real smart said, "Hey, the hospitals and the doctors are making a lot of money. And we need to push that more into the insurance pockets." Then somebody even smarter came along and said, "We've got to figure out how to do that. I got an idea. We're going to make an insurance drug. That insurance drug is going to be called in-network. And what they're going to do is, we're going to tell patients, 'If you go in-network, you're going to save a lot of money.' And then we're going to go to the doctors and we're going to say, 'Hey, listen, if you see these in-network people, man, you're going to see a lot of people and you're going to make a lot of money.' And then they got them hooked on the drug and then they decreased reimbursement. They made the premiums higher. I mean, it is really a mind-boggling situation. You have one of the few companies in America where they can go ahead and increase their prices and their product continues to get worse. What happens in insurance should not occur. Listen, in dentistry, $1,500 in 1980, $1,500 you were allotted to spend in insurance. In 2017, you're allotted $1,500. You know what? I did learn something, a couple of things about insurance. One, insurance had an unintended consequence. The unintended consequence was they put business before patients in healthcare. That was one. Two, I can learn to be an advocate from an insurance company, because an insurance company is a great advocate for their stockholders, just not for the patients. Second's the government. You know, this is a hot topic that's going around the world. We have individuals making policies on healthcare based on votes, not based on making people better. We have people that have never advocated for one patient going ahead and setting the landscape for the entire healthcare system. I've heard for the last ten years about, "Dr. Acierno, what do you think? I mean, all these new people are insured." I think it's great. The more, the merrier. The problem is we have given a product to a majority of people that if they use it, they go bankrupt. Now, we have the patients. Patients are pretty simple. You know, we've become very complicated. However, all we want is quality care. We want it to be efficient. Some might call that fast. We want to make sure that people actually care that we get better. And we would like it affordable. Okay, so, now, I'm somebody that's a big Walt Disney fan. And what Walt Disney says is, you make it for what they want, not for what you want. That's our customer. The patient is our customer. We'd better learn how to figure out what they want. So, what if? What if altruism, where you actually cared about others more than yourself, was back in healthcare? What if teamwork was brought in in all our hospital systems and in our dental offices? I mean true teamwork. Teamwork where there's efficiencies and there's affordability, where team members actually want to come and work in your place, not have to. What if we gave doctors the time and the tools to make excellent, quality healthcare. Once again, where we're Number 1, not back in the pack. Now's the time to change healthcare. The paradigm shift is that we have to make patients better. I cannot control that insurance and government have brought in negative influences. I cannot let them, though, put wedges between the patients and us. Business and healthcare have to learn to coexist. What business has to realize is that the profit is different than a T-shirt company. In healthcare, at the end of our fingertips, is a mind, a body and a heart that cares about us making the right decision for them. This is not a call to action. This is being done today. We have been able to put a business model together that is sustainable, with great quality healthcare. We have twenty-seven colleagues that have this vision, that make decisions every single day, based on altruism, teamwork and excellence. I'm not here to tell you that it's easy. I'm here to tell you that it's hard. I'm here to tell you that there's a lot of negative influences out there that's trying to make it hard. But I'm going to tell you that we're going down trying. This is too important for everybody out there. I am happy to say that we have once again found the soul in healthcare. Thank you.

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