Too much focus on numbers over team members can end up hurting DSOs in the long run, according to Jason Luchtefeld, DMD.
Dr. Luchtefeld is the founder of coaching firm Inspero, where he helps DSOs and private dental practices improve their performance and reach their goals.
Dr. Luchtefeld recently spoke with Becker's about some of the challenges facing DSOs and dentists, and where he sees the dental industry headed in the next five years.
Editor's note: Responses were lightly edited for length and clarity.
Question: What are some of the topics you hear about most from your clients?
Dr. Jason Luchtefeld: The biggest one right now is maintaining a good team. The idea of having any number of people to choose from to build a team is vastly different than it was a few years ago, and the ability to keep a good team is also more difficult than it used to be. Coaching people on communication, especially among the team, is the number one topic that's coming up. Even in the DSO world, the number one complaint I hear from dentists is communicating with their teams.
Oftentimes, a dentist in a DSO is not the owner, and there is sometimes an expectation that the dentist is still exerting some sort of leadership in the practice. That can be really sticky when they're not the owner and there's not necessarily the same level of respect from team members when the person's not writing the check and the management of the office may or may not be on site to help facilitate that communication. So the leadership and communication skills from bottom up and top down are all things that I'm finding need attention.
Q: Is there a lot of difference in what a DSO executive might come to you for versus a private practice owner?
JL: Yeah, in some ways, because the DSO owner is typically trying to scale. They're trying to find a way to make multiple offices have somewhat of a similar philosophy around care and have teams that provide care in a relatively consistent way. That's really hard to do at scale, compared to a single office where, if I'm owning a dental office and I have say, six to 10 team members, I can bring them together. I can teach them. We can work through things, troubleshoot and learn and grow from it. In the DSO, unless you have a manager on site to be helping with that who knows the company philosophy, knows how to take input from other people in the office and translate that, what happens is you lose the ability to scale a consistent philosophy … What you end up having to do is develop backbone systems that are necessary for a certain quality of care. That's something I also can help DSOs with, is figuring out what those systems are for them, and then trying to put those into place across multiple offices.
Q: What are some of the risks that come with not having those systems in place?
JL: A big [risk] comes back to the teams within each office. When you don't have a cohesive network and support system, you end up with a fragmented team that doesn't know where to go for support. They don't know who to go to for answers and leadership and that, over time, can really just tear a team up. So the real advantage of a DSO is if you have a few offices within a reasonable geographic location, bringing them all together can be hugely beneficial. I get that it's expensive, but the trade off in what you gain from team morale and team energy and team communication far outweighs that financial impact of a day out of the office, because you get people being able to share their concerns. They can troubleshoot ideas. They can troubleshoot solutions. You get everybody under one roof where the leadership can share a consistent message, and everybody hears it the same way, and they can then have a dialogue about that. There's so much value that it's shocking it's not done more consistently.
Q: What are some of the biggest mistakes you see DSOs making?
JL: I would say it's too much of a focus on the spreadsheets, so focusing too much on production, collections and overhead. Those are important. If you're not making money, you're not able to have an office and you're not able to pay people, so I get that. That's foundational. You have to be successful, however, I'm seeing too often it comes at the expense of the humans involved. There needs to be a lot more emphasis put on, how do we take good care of our people? This partly gets back to teaching communication, providing a foundation of communication in an office that is respectful and forthright and also allows for different opinions, knowing that ultimately there's a decision that not everybody may like. When decisions are made that are based on reducing the supply overhead from 7% to 5%, and then the assistants are complaining because they can't take an impression because they can't order something they ran out [of], that kind of decision-making is really like stepping over dollars to pick up pennies, when you're ignoring the team [and] how the team is taken care of in order to save a percentage.
Q: Where do you see the dental industry headed in the next five years?
JL: I think we'll continue to see the growth of DSOs. With the amount of funding they have and with more and more dentists of all ages interested in having less of a role in the management of the office, I think that all feeds into the continued growth of the DSO market. You're still going to see a segment of the population that really likes having ownership, likes private practice [and] likes the full suite of things that an owner dentist gets to do.
As far as other things, I think the explosion of technology, specifically artificial intelligence, in the last 12 months has been just amazing. From what I'm hearing, the continued integration of a variety of AI-based technology may reduce our need for some team members, and I think it's going to improve our ability to communicate with patients. I think it's going to improve our ability as dentists and team members to do dentistry, from diagnosis to treatment planning, to treatment execution. It's almost like we're going to have a built-in consultant with AI in which it's going to be able to dig into our database of patients in a number of ways, from imaging, to our notes and the financial side of things, and spit things out to us for how we make decisions. It's going to give us more options for how we make decisions, and that's going to be incredibly valuable.