DSOPro talked with Brandon McCarty, cofounder of CureMint, who developed an end-to-end procurement ecosystem that helps dental organizations with an...
What Makes Procurement So Vital to the Success of a DSO?
The Senior Consultant and Procurement Director for Aligned Dental Partners explains why procurement is so much more than ordering supplies and discusses vendor optimization, revenue cycle management, and increasing clinical EBITDA.
DSOPro: Tell us a little about your background.
I’ve been in dentistry for 26 years and worked in perio/prosth most of my career. I’m an expanded function dental assistant (EFDA) and certified dental assistant (CDA). I transitioned to teaching and training EFDAs and CDAs in Berks County, PA, 12 years ago.
While teaching, I attended school for healthcare management and medical records because I have a strong desire to learn and grow. After school I was ready to find a job using my degree, and got my first opportunity at a DSO based in Lancaster, PA. At the time we had 28 practices in Pennsylvania, and quickly bought six practices in Georgia, and six more in New Jersey. Over time I served in many roles and learned more than I could have ever imagined. I have been a: Compliance Officer, Operator, Director of Education, and Director of Procurement.
This DSO is where I met Dr. Alex Giannini, who later co-founded Aligned Dental Partners.
DSOPro: Tell us more about Aligned Dental Partners.
Aligned Dental Partners is a unique dental consulting company where we work with entrepreneurial dentists to grow and scale their business. We specialize in group practices and emerging DSOs. We help our clients put in place the infrastructure required to grow their companies. We also focus heavily on organic revenue growth, cost reduction, and increasing EBITDA.
As part of this team of amazing experts, my role as the Director of Procurement is to work closely with our clients and partners to build procurement programs and put effective processes in place to control spend on supplies, labs, equipment, and more.
Procurement is so much more than ordering supplies. Dental teams tend to overlook procurement as an integral platform for their dental group, but it is incredibly vital and with proper oversight will increase clinical EBITDA, which determines the value of the company. Our clients see the impact and value of creating procurement systems immediately.
DSOPro: Describe your role, how you handle procurement, and the procurement revenue cycle.
I currently oversee and advise on procurement for both of our companies, Aligned Dental Partners, which is the consulting firm, and Aligned Dental Support, which is a full-scale platform DSO with 52 practices. I am the Director of Clinical Operations for Aligned Dental Support and a Senior Consultant with Aligned Dental Partners. I oversee procurement, credentialing, clinical operations, and build policies and procedures for each of these companies and their respective practices. They like to keep me busy!
At Aligned Dental Partners I work with clients to lower their spend through leveraged pricing relationships. I help clients create structure, SOPs, budgets, and formularies, which are always an area of opportunity as most groups do not have any of these processes in place.
We really do a deep dive and look at how much practices are spending on labs, dental supplies, office supplies, and equipment. We look at their profit and loss (P&L) to determine if they are placing spend in the right categories to tell the whole story. The chart of accounts shows everything categorized and subcategorized so I can tell how much somebody’s spending on general supplies, like Arestin, whitening, implants, biomaterials, etc. Then, a quick glance at the P&L tells a very detailed operational story of what’s going on in the company.
The second phase is partnering with Method, which is a procurement software company. The software organizes all the vendors that we order from into one platform, so team members no longer have to log onto multiple vendor sites to do their price comparisons, which can take a lot of valuable time. They just log in to one account, access the processes we put in place, and order. The orders filter through procurement oversight to ensure the offices are ordering from their formulary list and that they are staying within their budget.
DSOPro: Describe how your vendors work with you.
It depends on the vendor. I train our vendors to service us in a way that follows our protocols. For example, we partner with Darby Dental among many others. They are a wonderful partner and are very transparent. They give us the attention we need and help us get great pricing at our practices and for our consulting clients, too. On the other hand, some vendors don’t work out because they’re not at the level we need them to be to service our group for various reasons, but that is part of my job, to determine who is a good fit for us and our clients. We take vendors through a process so they understand our goals and the buying power we have as a large group.
DSOPro: What kind of advice would be helpful for readers who may not have established this kind of protocol?
You need an understanding of exactly what your spend should be and how to create a budget for dental supplies, office supplies, and labs. Understanding when you look at a P&L, at your revenue, how much you’re spending in each one of those areas tells a story. The more detail you have in that story, the more you can work proactively to control the narrative. I am a firm believer that a DSO runs like homeostasis, because when one system goes down, they all go down. So, if one department isn’t strong, other departments will be hindered by that. Making sure you have these processes in place so that all departments can function together is a big part of the success of a DSO.
DSOPro: Let’s talk more about procurement as it pertains to dental lab spend.
One of the big areas practices tend to overlook is lab spend. A DSO should be spending no more than 9% of its revenue on dental supplies and lab services combined. Analyzing how much is being spent in either of those areas can demonstrate right away if there’s room for improvement. We do a lab analysis where we identify the dental labs each practice is utilizing and the fees they’re paying per lab. We break down the most common procedures, like zirconia, e.max, PFMs, dentures, etc., and then compare them against our partner labs where we get leveraged pricing.
Once we introduce the labs, and our teams and/or clients establish a relationship, we can put a lab protocol in place. For example, if our associate and partner doctors use the preferred and approved labs, they do not have to pay any portion of the lab bill. If doctors want to use a lab outside of the list, they would seek approval and pay 30% of the lab bill. If they did not get approval at all, they would be responsible for 100% of the lab fees. This helps keep our clinicians compliant and our costs low. But I must say, we never sacrifice quality for pricing and we only partner with labs that provide great customer service and excellent quality work.
DSOPro: How do you approach acquiring practices that have different levels of technology?
I have a list of basic dental equipment I know every practice is going to need—the major things, like autoclaves, dental chairs, lights, etc. As a procurement person, I do a lot with capital expenditure (Cap Ex) budgets. I help forecast what each practice location will potentially need to spend for the year and determine in which quarter those things need to happen. It helps our accounting department to know that we are going to spend a certain amount at a specific time. I do the same thing for existing practices, new practices, mergers, acquisitions, de novos, etc. We have to build a budget in order to understand how much money we need to get a practice up and running. Building a Cap Ex budget really gives us a good understanding of what we are getting into.
DSOPro: What are some of the tools you use to help you with this?
I have a lot of documented processes and standard operating procedures in place. I was taught by my mentor, Dr. Giannini, that the key is taking your time, breaking things down into bite-size pieces, and educating the people you work with. With our team and our ADP clients, I can see how much they’ve learned and grown after we work with them on their core processes. Teaching and educating are the best part for me!
DSOPro: What advice would you give someone who wants to be successful doing what you do?
Information is power. The more information you collect on the front end, the better you position yourself to develop a plan to achieve success. Being detail oriented is a key factor in this position, along with multitasking and good communication.
Once you get into it, you need to have a solid approach. Conduct a SWOT analysis (strengths, weaknesses, opportunities, and threats) first to identify areas needing attention and then prioritize. I don’t take a cookie-cutter approach. As a team we solve problems according to the information we diligently collect.
And vendor management is incredibly important; you cannot just set it and forget it. It takes a great amount of over-communicating to stay on the same page with your vendor partners and oversee all of the activity, because at the end of the day the buck stops here, and I need to make sure everything and everyone is held to account, including myself!
DSOPro: What else can you tell us about your role?
I’m able to function in many different areas and roles because I soak up all opportunities to learn. I coach clients on credentialing, their participation status, tax IDs, and everything else that matters. I’m able to help guide team members through things such as clinical policies, chart audits, patient flow, and making sure that everyone is upholding the company’s standard of care. Because I have that structure in place, I can train teams to oversee the daily operations in an effective manner.
My success came via the school of hard knocks. Dr. Giannini has started quite a few DSOs, as have Chris and John McClure. Chris and John are the other co-founders of Aligned Dental Partners and are pretty visionary in the DSO space. They all have an incredible wealth of knowledge and experience in this industry, and I am fortunate to work with them and the rest of our team. Each one of us brings a different perspective and life experience to the table, and it is this environment that has shaped me into the person I am today.
DSOPro: What do you see to be new or trending in the future in terms of procurement?
I think automating processes and making them as simple as possible. As companies scale and grow very quickly—because that is the direction dentistry is moving in—more automated processes are needed to control chaos and keep things from falling through the cracks. Putting procurement systems in place and consolidating vendors, so it’s the one-stop approach, is the most manageable way. I look forward to what the future has to offer!
More from the Newsletter
- Winds of Change: Adapting to Procurement Change with Artificial Intelligence
- The Era of Scarcity Will Shape the Future of Procurement
- Modernizing Procurement with the Alt Suite
- Desktop Health Receives FDA Clearance for SmileGuard Resin
About Christine Manndel
Christine is a Senior Consultant and the Procurement Director for Aligned Dental Partners. She assists clients with analyzing their supply chain and optimizing vendor relations. She has worked with various DSOs and Group Practices to drastically reduce their Cost of Goods Sold through creating formularies for dental supplies, labs, office supplies, and all areas of procurement. She creates streamlined procurement processes for her clients to reduce costs and maximize efficiency.
Christine hails from Pennsylvania and is a detail-oriented, highly motivated team member with over 26 years of dental experience. She has taught as a dental professor for 7 years and served as the Director of Education for a DSO. She enjoys passing on her passion for dentistry to those eager to learn in the dental field. She held a variety of roles in a DSO that supported 30 dental offices in three states. She worked her way up quickly through the ranks of that company, showing she has what it takes to succeed and learn all aspects of a DSO and dental group. Working in multiple departments allowed Christine to develop and evaluate goals, and in turn, execute a prescription that will guarantee success for her team.
Christine has an associate degree in Electronic Healthcare Records and Healthcare Management. She holds a CDA and is an EFDA in the state of Pennsylvania. When Christine is not focused on dentistry, she is focused on her nine-year-old daughter and husband of seven years. She loves taking trips and creating memories with her family and friends at their family cabin.
Aligned Dental Partners
Aligned Dental Partners (ADP) is an innovative dental consulting company. ADP works with emerging DSOs, group practices, and entrepreneurial dentists. Practitioners work with Aligned Dental Partners to develop their platform, increase EBITDA, and drastically grow their company’s value. We help dental companies centralize their non-clinical functions and support their management teams, allowing dentists to focus on patient care.
Aligned Dental Partners’ leadership team has successfully worked with 1,000s of practices, groups, and DSOs throughout North America in both consulting and management capacities. Our team has been supporting the business of dentistry for over 30 years and has successfully built, operated, and transitioned dentist-owned and dentist-led groups to accomplish their goals while achieving premium valuations.