Despite experiencing a less active first half of the year than planned, U.S. Oral Surgery Management has big plans to expand its network later this year, including entering new states and recruiting more surgeons.
The Irving, Texas-based MSO has partnered with several practices so far this year, growing its footprint in Colorado, Kansas, California, Maryland, Virginia, Florida and Arizona.
USOSM CFO Henry Moomaw recently spoke with Becker's about the company's growth this year, its goals for the rest of 2024 and other initiatives the company plans to pursue.
Editor's note: Responses were lightly edited for clarity and length.
Question: How would you describe USOSM's growth so far this year?
Henry Moomaw: So far this year, it is a little behind our expectations. The M&A market has just been a little soft, so we have not had as many new partnerships with practices as we initially anticipated. We have partnered with seven different practices through May of this year. We had planned on doing maybe a dozen or so, but the pipeline remains really strong. We've got a lot of potential partners with whom we're continuing to negotiate.
We do have five additional practices that are signed up that'll be joining us in July and August, so it's picking up now. I think a lot of it was driven by the macroeconomic conditions and the interest rates being really high and just a lot of trepidation from partner practices that are out there. We're not aware of too many of them that we've lost to competition. It's just that they're not ready to join us yet. We do think the tide is turning.
On the recruiting side of things, that team has done a phenomenal job. We have 12 different associates that will be joining us this summer. These are surgeons coming out of residency programs and joining our existing practices.
Q: Is USOSM focused on recruiting surgeons right out of dental school?
HM: Absolutely. We start early and on. We want to be a presence and make sure they know who we are early on in those programs and throughout the residency to get ahead. They're making decisions up to two years in advance of the completion of their residency program. They're making decisions on who they want to partner with, and they're ready to get to work. So we're always a presence in all of the residency programs and all of the schools. We're trying to make sure we're on the radar of everyone out there and all of the programs. There are only [about] 230 new entrants into the field each year, so it's not a gigantic group and it's really important we get a nice chunk of those to add. It's important to both backfill your retirements that are scheduled to happen from our existing surgeons and for growth opportunities of existing practices that have the bandwidth and can take on some additional surgeons.
Q: What made your recent partners a good fit for USOSM's network?
HM: It's the quality of the surgeons. That's part of what really differentiates us from some of our competition. We have the brightest and the best surgeons with whom we initially partnered, our founding surgeons, and they continue to lead us to other like-minded surgeons across the U.S. We're in 27 states, we'll be in Connecticut at the end of July. That'll be our 28th state.
The surgeons with whom we partner, they're industry leaders. These are folks who were stars in their residency programs and have built strong practices. We're very careful who we partner with. We're not going to partner with a group that's low margin, low quality. We've got two chief clinical officers because we deem that area so important. Of our seven strategic initiatives, our first is not on growth or profitability. Our first initiative is parallel patient care and quality programs, and we live by that. We have [also] put in place over the past year a dedicated three-person learning and development team that will help lead webinars to help the practice leaders and surgeons.
Q: What other details can you share about the new practices joining later this year?
HM: We've got one in Pennsylvania, the one in Connecticut. We've got one in South Carolina, which will be our fourth practice there. [We have] one in Hattiesburg, which will be our fourth practice in Mississippi, and one in Lafayette, California. That will be our 11th practice in California. Those are over $20 million in revenue and really strong practices with good surgeons. Those comprise about nine total surgeons across the five practices.
Q: What other initiatives does USOSM have planned for the rest of 2024?
HM: One of the things we're continuing to focus on this year is accurate clinical coding. That's led by one of chief clinical officers and it's really been embraced. It is working with the practices, reviewing some of their work, taking a sample and making sure they're accurately and properly coding each of the procedures they perform. That will continue throughout this year and probably into next year as well as part of our quality efforts.