Dental / Medical Integration with Pacific Dental Leadership Stephen Thorne and Dan Burke


Bill Russell / Stephen Thorne / Dan Burke

Stephen Thorne PDS Pacific Dental Services This Week Health

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Pacific Dental Services had a team of people at the HLTH conference. They are in the process of implementing EPIC system-wide. All the latest retail clinics have dental integrated with primary care and other services. Stephen Thorne, founder of PDS is excited to make this future a reality. Hope you enjoy.

Bill Russell: 00:00 Welcome to this week in health it events where we amplify great ideas with interviews from the floor. My name is bill Russell, recovering healthcare CIO and creator of this week in health it a set of podcasts and videos dedicated to developing the next generation of health leaders. We want to thank our founding channel sponsors who make this content possible, health lyrics and VMware. If you want to be a part of our mission to develop health leaders, go to the home page this week, and click on sponsorship information. This week we’re at the health conference in Las Vegas and one of the areas I’m keeping an eye on is dental medical integration. It’s amazing really that it hasn’t happened in earnest yet. I was able to sit down with one of the leaders in this movement, Pacific dental services founder Stephen Thorne and Dan Burke, the SVP of platform strategy to talk about this obvious integration. Have a listen, hope you enjoy.

Bill Russell: 00:57 All right, here we are again from the health conference in Las Vegas. We’re here with the leadership or some of the leadership from Pacific dental. We have Dan Burke, the senior vice president of platform strategy, and we have Stephen Thorne, the, you have a lot of titles with president and CEO and founder, founder Pacific dental. I, I’m really excited about this conversation for a couple of reasons. One is I, yesterday you had Bernard Tyson, CEO of Kaiser Permanente stand up on stage on the main stage and he was talking about mental health and he said, you know, in healthcare we’ve separated the head from the body. And that’s actually a phrase that I heard from your CIO before. And as we’ve talked about it, it’s like, you know, healthcare doesn’t, hasn’t for many years recognized oral systemic health as, as part of healthcare. But that’s changing. I mean, we’re seeing that change, you know, Walmart is sorta integrated. You’re seeing some other neat plays start to integrate it and some, I’m looking forward to having this conversation with you and I think for our audience, I think they’d be surprised how, how much it’s already starting to be integrated in terms of care model. So with that sort of as the backdrop, give us a little little background on Pacific dental, what the, what the model is, where you guys have been in, where you’re looking at go,

Stephen Thorne: 02:13 right. Thanks. And we, we are a DSL. We support, uh, almost 800 practices around the country in 22 States in 40 different markets, about 3,500 clinicians out there working hard every day. So most of the carers that are here and the, the groups people are talking about here in overall in the overall health, uh, we work with today, but it’s exciting for us because we’re the only dental company that is here, I believe. And so we, we see what’s happening out there in the, what we call dental medical integration and the link between oral diseases and systemic diseases. And so that’s the primary reason we’re here.

Bill Russell: 02:58 That’s exciting. You really, you haven’t found any other dental here? I mean I haven’t, I’ve walked through the,

Stephen Thorne: 03:04 I believe we’re the only dental company here and it’s super exciting and we’re, we’re dedicated this from a organizational standpoint, we are in the process of migrating our whole practice management system over to the Epic platform, which is obviously in a grid main stream, uh, overall health. So we’re excited about that.

Bill Russell: 03:25 So you’re going to be able to see the, the, uh, wisdom, which is the Epic platform. You’re gonna be able to see the wisdom, uh, information right next to the, uh, medical information. Correct. And so, so many of the carriers, I say in theory, because it really hasn’t been done yet.

Stephen Thorne: 03:41 Well it hasn’t been done yet, but we will be the first, I’m going to throw it down there. We will be the first to have it actually integrated in the dental and the wisdom product. But we’re, we’ve been working on this for a couple of years now. So with dental and medical integrated integrated, we have three medical practices we support. So it’s not like we have to go out outside our system to make this happen. We’re actually doing it within our current system.

Bill Russell: 04:13 And yours, yours is an exciting company. You guys believe in platforms. Obviously you haven’t a platform, a title, which is interesting cause I love that title. It, it’s a uh, it’s something that healthcare really should adopt. I mean I’m coming from the it background and essentially saying, look, you know, they think, uh, ERP, EHR, these are platforms but they’re not platforms. They’re applications still. Platforms are really a level above that and enable all sorts of agility. Um, but also the business models thinking in terms of platforms. So Walmart comes out with their chore in a whatever, Dallas, Georgia, a hundred thousand square foot facility and they put mental health, uh, primary care and dental as well as other things, labs and other things.

Bill Russell: 04:59 All in that same building is, is that the future of, of sort of what we’re, we’re going to be seeing is those kinds of entities popping up?

Dan Burke: 05:08 Yeah, I think, and another example, Walgreens, I believe they have two or three in Northern Florida. Now they have a dental practices right in, in the pharmacy footprint. Uh, I think what we see is just starting from the patient perspective, we think that’s the big, that’s why we’re talking about platforms.

Bill Russell: 05:24 because you guys have been retail for a long time. I mean, you guys are, I mean that’s your, that’s your background.

Dan Burke: 05:29 We’re in the neighborhoods. Yes. And it’s a, it’s called a retail location. Uh, it’s fully integrated, comprehensive oral health care under one roof, which is been a differentiator for PDs. Uh, from the beginning. Uh, Steve when he started 25 years, the 25th year. And by the way, uh, it was a general practicing dentist, but from the patient perspective that dentists would bring in the specialists.

Dan Burke: 05:49 So it’s built out for oral surgery. And then, you know, you name the periodontist, endodontist, a board certified pediatric dentist, orthodontist, they come for the patient. So from a patient perspective, in your neighborhood, you have comprehensive oral health care, which thankfully is becoming less rare. Uh, I’d like to think PDs had a lot to do with that. And what’s exciting for us now is we think, um, dental has been the ultimate in balkanized and separated. It’s been completely walled off, uh, for generations. And, and that’s been fine. Where dentists are by themselves, they, uh, literally are practicing by themselves and who can name anybody who’s ever taken their dental records with them from one to the next. So it’s been an incredibly inefficient system. So PDs, when we think about platform, it’s really about a mindset and it, and the nice thing is that the science is catching up with PDs mindset for 25 years, which is the mouth is part of the body. And so these ideas about whether it be Walgreens or Walmart or wherever, is the idea really is, can patients be seen as a healthcare system of one and can be treated as a healthcare system of one? And there’s this artificial balkanization of ourselves over and PDs says, yes, that’s why Vanguard partner for epics. So yeah, we, we think that’s, that’s why platform, and again, for us it’s a mindset and ultimately it’s about the patient and so that the dentist can be part of the clinical collaborators for that one health system. One.

Bill Russell: 07:14 So the interesting thing about your models, you guys really are everything. I mean similar to healthcare, um, you know, you have the big hospital there but you have all these entrants coming in and picking off this one thing or whatever, but then it’ll sort of gotten there. You’ve got a lot of competitors that are doing new business models and those kinds of things. Um, but you guys are pretty, I mean you guys are really coming alongside in all aspects. I mean, uh, uh, insurance all the way through, uh, all, all the different aspects of,

Stephen Thorne: 07:43 right. That’s, that’s been one of the biggest barriers. Dental has its own coding system, so much different than everything else. Medical and so it’s like a Chinese and Japanese. They don’t really talk to each other. That’s one of the reasons we’re doing this big investment into the Epic wisdom product that we talked about is because now we can talk to each other and they will be working in the same patient record. They’ll have access to cross coding, cross billing. There are some carriers doing that right now, United healthcare and blue cross blue shield of um, of Hawaii and a couple others that are testing this and what we’re S what they’ve all shown. And I’ve yet to see. I was telling Dan just before we started talking that they’ve all shown an overall reduction in overall healthcare costs. So as, as these carriers integrate dental in a more efficient and a more effective way into the overall healthcare, um, into their overall health plan, they’re able to save overall healthcare dollars on an annual basis. It’s a big deal.

Bill Russell: 08:54 Yeah, no, I, I would think it is. So is your sort of, you know, my knowledge of dental coming from healthcare is probably what you think it is. And so I refer to you as retail earlier, but I mean, do you, um, do you go directly to employers? Do you go, I mean, what did, what did, how do you, how do you market this? How do you, how do you help your practices succeed in their markets?

Stephen Thorne: 09:19 We currently don’t go directly to employers. We have a, um, a dental plan for patients that are uninsured. That’s a growing space for dental right now in the United States, but we mainly work with the, the large carriers in the United States. There’s one, uh, dental care that as the vast majority of it’s called Delta dental, but there’s others that are, are also very large. Humana and United healthcare and, and MetLife and those others. They’re very large carriers.

Stephen Thorne: 09:47 So we work with them. But more and more and more we’re looking at what’s the future that’s the past. What is the future? These sort of, uh, and I’ve heard a lot, I heard a lot yesterday about these, these update a TPA type plans. I think that’s going to be a big part of the future dentistry, I think.

Dan Burke: 10:07 But one thing that’s really exciting is a lot of these things didn’t happen in dental before. Again, because of the incredible disparate nature of it. I mean, you couldn’t coordinate the individual dentists to do that. What’s really exciting about PDs is now we’re at the scale where it’s really interesting. Yeah. We have density. I mean for the first time you have a dental company, like a PDs that can point to Nevada. Right here we can point to the inland empire in California, we can point to Colorado and Denver area, we can point to Arizona. And when we have density now we’re very interesting because now you can talk to a hospital system and we, and we have worked with one hospital system, particular I am one of those areas that I’ve spoken to and how do we work with them and integrate into them because then you can start going out to an employer and saying we can cover all of your employees. We actually have a dense network to support it.

Bill Russell: 11:00 So your, your model going back is you essentially came with dental practices traditionally had been like mom and pop shops. Correct. And you came alongside of them as a DSO and provided all those services. Correct. Um, but now what you’re talking about is if you, if you get enough aggregation of them, you actually have the ability to almost function like a system within that market,

Stephen Thorne: 11:22 correct? We do. We think the future will be that the aggregation in dentistry, when it to give, put it into perspective on numbers, is less than about 1% when I started 30 years ago, PDs has been in existence 25 years. It’s approaching 25% now across the United States. So it’s aggregating very fast. And then those as Dan just mentioned, we have massive density. So if you think about, um, as an example, a Medicare advantage program that’s out there where they’re taking full risk and when the studies show we can help out their diabetic patients in the neighborhood of 2000 and $5,000 a year and in overall reduced healthcare costs. Now there’s a direct causal relationship. No, nobody’s gone out that far. But does it assist and does the data show the improvement? Yes. So why not do it if those are the dollars? So that’s now possible. 10 years ago that wasn’t possible.

Bill Russell: 12:25 Well, this is going to maybe show my ignorance, but wondering why a health system hasn’t bought companies like yours. VC is heavily into dentistry and the reason they are is because it’s, it’s primarily a cash business is what I’ve heard. I dunno if that’s true or not, but I’ve heard it’s primarily a cash business and the margins are a lot higher than that. Healthcare. I mean, when you look at healthcare, most of these large systems walk in here and they’re there at 2% margins and dental is higher. But why is it a health system likes to just said, Hey, that makes a lot of sense. It’s just the cultural barrier.

Dan Burke: 12:59 We think it’s going to happen. It’s just a matter of when. I think part of it is just the maturity of the DSS. A large health system is not going to be interested in a DSO that’s scattered around and has 12 practices. Right. Well, PDs to give you a sense of our growth, uh, it probably took what? Just if you ever get revenues and you think about that as our size, right? It took about 21 and a half years or so. Steve knows good enough to get to a billion. Well, we’re budgeting. That was just a couple of years ago. We’re budgeting for next year to be approaching 2 billion. So, and then we’re going to double again in four and a half years. So if you think about, all right, I’m the numbers guy and it just got harder to break my phone bill. You just saw that right running, it should accelerate you because, exactly.

Dan Burke: 13:42 And that’s all organic. It’s all requisition in there. That’s a dentist saying to us, Hey, we want to help. We, I’m ready to open a practice and I want you to help me. And that’s us going out and buying dirt, building it up and, and helping them out or finding them a lease space. That’s all the noble, all organic. So when you start getting that kind of energy and that kind of scale, no question. And by the way, even just to be looking at maturity in the market, even when I got to know Steve, I think we got to know each other about 10 years ago. I joined eight years ago, uh, I guess over that now. Wow. But, um, the, the types of VC folks where Steve was describing the industry were perfectly, very good VC, but they tended to be a retail VC or some of the smaller niche healthcare VCs.

Dan Burke: 14:24 A few of the larger groups, but, but not too many now it’s the KKRs. It’s the ones that are called the Carlisle groups, you name it, they’re all in and they’re all at the gate waiting. It’s just where can they deploy their money? Um, and candidly we think once the large scale yeah, someone’s going to come in and we could all name the different groups that would be likely, but how could they not a, it, it fits nicely. B, the numbers are clear and uh, like frog doesn’t study an Avalara. If someone wants to get a copy of it, that would show if a patient’s on Medicare patients with certain systemic conditions and not, not the whole list, just a brief list where to have a dental benefit just just tied to periodontal disease treatment for those patients. With those systemic conditions, it would save $80 billion.

Dan Burke: 15:10 I mean, it’s remarkable. So once, once the payer starts seeing that or hospitals start seeing that it’ll happen just right now. I don’t think they’ve had a target to go after. Uh, they will. Uh, it probably won’t be us. We’re the only one that’s not owned by PE or VC. Nothing wrong with that. But we get to have Steve, and I won’t go off on this, but that’s a reason why people like me get to say to, I don’t have to go to a board. I don’t have to go to a P group. I don’t have to tell them that. What’s my turnaround in 12 months? Changes the game. I don’t need to make numbers. Next core, I guess get to say to Steve, Hey, here’s an idea and if Steve believes in it, we can do it.

Bill Russell: 15:45 That’s a, that’s fascinating. But the, it really is fascinating from, so you guys are at scale. You can get in there. Uh, well from this perspective call center, you have a

Stephen Thorne: 15:57 central massive centralized call center, massive centralized billing collection services.

Bill Russell: 16:02 Right. And a phone system is now we’re all integrated across the internet. We’re on ring. Yeah. Those are, those are, those are huge, huge movements. I mean, if I’m a small mom and pop shop and I’m going, alright, this is getting harder and harder for me. I need, I need a way to engage patients. I need to way to keep my chair filled. I need a way to expand into new areas. I need a way to, I need a way to do all these things. Plus the phone system costs money. The other stuff, it’s, it’s hard for them to stay, stay going and stay afloat.

Stephen Thorne: 16:37 Right. And that’s why the space is growing so fast across the nation. It’s, it’s, we’re growing at a very nice pace, a very steady pace, good use of capital. There are other groups growing just as nicely. Also in different, in different niches. I think what Dan said earlier is accurate. We’re the largest full service group or all the different specialties and I think that’s enables us to move over to integrate better on the medical side than others could. And we, again, that’s what we see as a future.

Bill Russell: 17:15 So what would a partnership look like? So I’m with a large health system. You have, uh, you have scale and what we’ve talked about, Nevada, Southern California, you have some scale. Sure. So I come to you and say, all right, let’s start talking about partnerships. Um, is it, is it building out new, uh, new locations that sort of integrated or is there a way to integrate it in other ways?

Stephen Thorne: 17:38 I think there’s a couple of different different ways we’ve been thinking about it. The, uh, this the simplest way is what we’ve done with, uh, another group in, in Arizona and

Stephen Thorne: 17:50 just helping them with getting their patients that need arts needed dental care over to our offices and for us with patients that come in that need a physician, get them over to see a physician, we see it on both sides. So just referral patterns, it’s referral patterns. And we’d take Dennis take blood pressure, you know, just something just super simple. Right, right. Elevated blood pressure. What is your position? When was the last time you saw your physician? Well, here’s a group we work with. You can get over. Patient walks into the, um, into the physician and has some inflammatory disease, whether it be diabetes, cardiovascular disease or mild Alzheimer’s, whatever. When was the last time you saw your dentist? Simple, simple things like that. Now the next step is I think some where these groups have the full risk coverage of helping them actually reduce costs.

Stephen Thorne: 18:49 And that gets to a whole nother level of thinking where we have, we have some density in those markets.

Dan Burke: 18:54 I think everybody wants this to happen. So your question is how do we work together? It’s going to happen because again, everybody wants it to, and I’ll go start with the clinicians. Steve’s on a, a board at Harvard on oral systemic counts. Harvard dentists and medical students take classes together. Now at NYU, they have to sit and take classes together at university of Pacific. They take classes together and they’re building one clinic where the, where the dental students and the medical students will actually learn together and they will, this will be something now they’ll graduate and assume there’ll be surprised that this always hasn’t been the way for the profession. Right? So from that perspective, from the patient’s perspective, we all want to be seen as a health system of one and where we’ve been building on the hospital system and you need a real example, Epic, it’s to my knowledge, it’s a single largest investment that any company in the United States dental company in United States has ever made.

Dan Burke: 19:45 You know, if you look at what we’re projecting to spend on that thing over 10 years, it’s, it’s phenomenal. And candidly we think it’s a great investment of course. Uh, but that, that’s just one, we’re just naming Epic. It’s not, doesn’t sit on its own. Epic is surrounded by other aspects of our platform. All that had been specifically architected to be thin and open so that we could be a fungible puzzle piece and slide in and connect. So not just referral. Once we’re on the same system as these hospital systems and they have access to full data and they can get a more complete health history. And what’s happening with some of their patients is certainly to serve systemic conditions. They’re going to want to work together. And the same thing with a dentist. And any hurdles in between. There are, I won’t say there, there’ll be easy to get over, but we’ll get over them because everybody on both sides of that chasm is pulling together to get over that one.

Bill Russell: 20:38 Uh, I went to a time management thing one time and, and uh, somebody raised their hand to ask the question. It’s like, Hey, should I have one day timer for work and for home? And a person looked at him and said one life, one day timer. And I think that the reason I bring that up is I own my own business. I go to do insurance and I have vision, which is one company. I have health, which is one company. I have dental, which is another company. Each one sets me a set of forms that I need to fill out. Okay. So I’m a very small company. I mean two people, two person company and I have to dedicate almost a full day to like figuring out insurance for two people.

Stephen Thorne: 21:20 And you’re in the business. Yeah. You sort of get it. So we see the same thing. And there are companies out there, I think I’m again a United health and Aetna are both trying a couple things in that area to consolidate some of those. Now again, remembered dentists use a different coding system. So there is a fundamental, fundamental different, different from what you know about medical terminology. Correct. Okay. We have a CDT common dental terminology, I think it’s called and ICD 10. Oh, okay. They’re different systems. Got it. So, so dental hasn’t been incorporated into ICD 10. No. Yeah, no, that’s it. Yeah. You’re laughing at me like I should know that. No, no, no. I’m not laughing at you. I’m just laughing. It is. And so that’s part of that inertia Dan was talking about that it just keeps going. We’re working on solvents. Dentists currently, uh, don’t have to use diagnostic codes, which when you talk to your physician peers, they go, really, no, dentists don’t use a diagnostic coding system. So we’re trying to solve some of those big problems on scale. No, I get it.

Bill Russell: 22:41 Physician burnout on the other side because it just, and actually if you step into healthcare, will you start to get more regulatory oversight and those kinds of things, which may not be warranted. I’m just curious.

Stephen Thorne: 22:54 Yeah, there’s a common question we get and there’s always that possibility of what ads it moves over to a Medicare type plan. Not so sure on a Medicare advantage plan because you’re working with somebody that’s above you taking the risk. Right. But you asked earlier about the payment system, six, uh, 85% of patients that come into our network this year, which will be over 6 million patient visits this year, 85% have a dental plan from a carrier, from a commercial carrier. Now 60% of the dollars that come into the system come from out of pocket. So there’s a much higher, if you call it copayment or patient share in dentistry than there is on the medical side. They’re still ~~accessing the dentist through their commercial dental plan of all the same carriers. So I think the, the, the risk is there, but if there’s risks there that’s going to be vetted out anyway, it will happen. Because if there’s excess profits in the system on dental, which I don’t think there are, I think it’s about fair. If there’s excess profits, it will get competed away sooner or later. Just the way business works. Right.

Bill Russell: 24:20 What kinds of things are you doing? I think there’s some similarities and overlaps here, but what’s, what kind of things are you doing in terms of, uh, patient-centric outreach, communication, uh, reminders, those, those kinds of things? How are you, how are you engaging the consumer?

Dan Burke: 24:36 Sure. Uh, the most important engagement for the, for the patient happens at street level. It is a local neighborhood dentist. So if your listeners haven’t heard of Pacific dental services, Pat on our backs, the ones we want dentists to have heard of us, not the patients.

Dan Burke: 24:50 So when you go into, in fact, some of your listeners probably go to a Pacific dental services support practice, they should ask their dentist, right? And then we think that’s great. They should care about the name on the door. Which is the clinician’s name, right? That’s the relationship we’re trying to facilitate. So that’s the most important is in chair. Now from there of course we support a ton of communication. It’s really, however the patient wants it right through a patient portal. It can be texts, it can be email and all the way, all, all the rest. In fact, we’re excited because we’ve done a pretty good job on that Epic, Epic, quite frankly, state of the art and what we’re excited about and I believe the name is going to be my chart, smile generation, we actually put, they asked us and we said, no, you guys go first.

Dan Burke: 25:32 Cause we’re quite frankly appreciative of how much they’ve invested in my chart. Uh, and, and uh, but when, when patients have that, that that’ll be a game changer in dental. That’ll go to a whole lot.

Stephen Thorne: 25:43 I think there’s is one other one that is that people do want to get their teeth cleaned. And so the average patient, those, those numbers was telling him comes in. They come in two and half times a year and that’s something they actually want. They don’t want a root canal. And they don’t want the other stuff but the cleaning part, so it creates this, this recurring stream of patients and access and the ability to intervene early and from a business standpoint. Nice recurring revenue string.

Dan Burke: 26:14 Yeah. I’d say one of the cooler things on patient engagement recently, I’ll just give an anecdote is you know, uh, not that long ago I’m driving to work and I was talking to my mother and she’s in Boston and she tells me, Oh you’re not going to believe this. My cardiologist asked if I’ve gone to the dentist cause she has a heart condition and I, you know, of course I said you haven’t been listening to me for eight years, mom. Anyway, but I think that’s happening as well. And I think patients candidly, I think a lot of people, and I’m on that list thought there’d be more resistance to that idea and I think patients have immediately adopted it. I think intuitively they get it. Of course a disease of the mouth or malady the mouth will impact the rest of the body. Of course it does. Yeah. So candidly, we haven’t found that it takes a phone book and information to convince a patient of something they already assumed in our initial practice that we did the integration, we had 372 I think was the number of patients that were seen by both the physician and the dentist. And Dan’s spot on. It wasn’t getting the, the patient to understand that the mouth was connected to the body who was the dentist and the physician that we had to work so hard at.

Bill Russell: 27:29 That’s such a, and I would, I would assume that the integrated medical orchid, I mean, as you guys are talking about this and they’re gone. Yeah. You know, I think I, it’s better for me if my dentist knows the meds that I’m on and they know my medical history. I mean, I don’t expect them to do something that’s going to impact me that greatly, but, um, but I want them to know that they work, they use anesthesia, they should know all that stuff. Of course, then they shouldn’t rely on a patient with a clipboard and a pencil going down and checking off the little boxes every time. Right. Yeah. I think we’re going to be kicked out here in a second. Gentlemen, thank you very much. This was really enlightening. I appreciate being able to share. Thanks. Go. Thank you.

Bill Russell: 28:11 I hope you’ve enjoyed the conversation. If you’d like to recommend a guest or someone to be on the show, you can do that from our homepage, uh, recommended guesses about three quarters of the way down on the homepage. Please check that out. And don’t forget to please come back every Friday for more great interviews with influencers. And don’t forget every Tuesday we take a look at the news, which is impacting health. It, this show is a production of this week in health it for more great content. You check out our website this week, or the YouTube channel, which you can get to from our homepage as well. Uh, if you get a chance to take a look at our newly redesigned guest page, I think you’ll find it a fantastic, I love the way you can navigate through the content. Special. Thanks again to our sponsors, VM-ware and health lyrics for choosing to invest in developing the next generation of health leaders. Thanks for listening. That’s all for now.