Dentistry Uncensored with Howard Farran
Dentistry Uncensored with Howard Farran
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1134 Joseph A. Nagle, President and CEO of Delta Dental of Rhode Island, First Circle Inc., Chewsi, and Altus Dental Insurance Company : Dentistry Uncensored with Howard Farran

1134 Joseph A. Nagle, President and CEO of Delta Dental of Rhode Island, First Circle Inc., Chewsi, and Altus Dental Insurance Company : Dentistry Uncensored with Howard Farran

2/4/2019 2:18:20 PM   |   Comments: 2   |   Views: 504

Joe Nagle is President and CEO of Delta Dental of Rhode Island and its subsidiaries – which include Altus Dental Insurance Company in Massachusetts and First Circle, Inc., the parent company of Chewsi Dental – the whole new way to save on and pay for dental care.  

VIDEO - DUwHF #1134 - Joe Nagle

AUDIO - DUwHF #1134 - Joe Nagle

Joe has long been on the leading edge employee benefit innovations. Prior to joining Delta Dental in 1992, he was a founding partner of The Capstone Group, a Providence-based healthcare consulting firm. And he previously held executive roles at Blue Cross & Blue Shield of Rhode Island and United Health Plans of New England. His
 career began at the international accounting and consulting firm of Ernst & Young. A self-described “rational optimist”, Joe believes that thinking differently is at the core of remaining competitive as a business – and that disruption and change, while uncomfortable at times, are both inevitable and essential.

Howard: It's just a huge honor for me today to be podcast interviewing Joe Nagel who is president and CEO of Delta Dental of Rhode Island for like 27 years which includes Altis dental insurance company in Massachusetts and first circle Inc which is the parent company of Chewsi Dental the whole new way to save on and pay for dental care. Joe has been long on the leading edge of employee benefits prior to joining Delta dental in 1992 he was a founding partner of the Capstone Group a Providence based healthcare consulting firm and he previously held executive roles of Blue Cross Blue Shield Rhode Island and United health plans in New England. His career began at the International Accounting Consulting firm of Ernst & Young. A self-described rational optimist Joe believes a thinking differently is that the core remaining competitive out of business and that disruption and change while uncomfortable times are both inevitable and essential. I invited you on the show I was so honored you come in because most that most Delta most insurance companies are kind of afraid of dentists because they know dentists are kind of like that Union mentality where they want like all crowns covered it like a ten thousand, this would've come in on Monday morning to a ten thousand dollar crown and go home and they don't like to hear about competition and checks and balances and they never ever really get to hear from the insurance side of the story. Most dentists are always listening to other dentists talk about root canals, fillings, crowns and implants. It's just such a huge honor to get one of the legends of Delta Dental for almost 30 years to come on and share what it's like sitting on your side of the dental equation thanks for coming on the show Joe.

Joe: Glad to be here

Howard: So most podcasters are young most of you a quarter these guys are still in dental school most are 30 and under they're gonna be so most everyone lists you as a dentist provider what's it like sitting on the other side of the table trying to get fortune 500 companies and small businesses to buy dental insure and how has that business going and what technologies do you see that are currently disrupting it

Joe: Well Howard first of all thank you for inviting me onto the podcast I'm gonna spend probably just a little bit of time on the insurance aspect of this because if Chewsi is really very very different it's not insurance and I think it's surprised I think that dentists will embrace here at Delta Dental of Rhode Island we're part of the national delta dental plans association and one of the ways to look at that is it's effectively a franchise we are limited to selling delta dental products to companies who are headquartered here in Rhode Island but we've been very successful we're in the smallest state in the country but we have the second largest market share of any Delta dental plan and we have clients such as you know CBS health is our largest client, Citizens Financial Group, Amica insurance. Lots of publicly traded large companies who have lots of market clout. So dental insurance is very different if serbs are all proud to be associated with Delta Dental and Altus dental, we started Altus Dental so we could expand beyond Delta Dental franchise area and in Massachusetts we have about 180,000 Altus dental members but last year we started Chewsi because we noticed that we know that there is a void for all those people who need oral health care but can't afford dental insurance and their employer doesn't cover that. So I look at the Chewsi product is very very different from dental insurance from the user perspective, the consumer perspective that person if you're a part-timer you typically don't get access to insurance from your employer, if your retiree it's very difficult to find coverage for a retiree but even people who are covered by dental insurance our experience shows that roughly 20 percent of them have a service that was submitted to us as Delta Dental or Altus Dental but was denied because it wasn't covered by their employers plan. It could be over the maximum it could be beyond a frequency limitation it could be because it's cosmetic service you know teeth whitening, occlusal guards. So the roughly 20% that isn't covered, could be covered by Chewsi. So Chewsi effectively covers any oral health service that isn't covered by insurance, whether you have it or you don't have it if as long as it's not covered Chewsi they're. Some of the nice things about from the employer perspective in terms of wanting to promote Chewsi, is that it gives them an opportunity to provide a benefit to their employees who they don't provide it to. I mentioned part-time is a good example, their retirees who vote in into a decision to accept accept Cobra have another choice now in opting for Chewsi. It wraps around their insurance plan so it enriches that offering and there's really no administrative duties for the employer they simply tell their employees about the existence of Chewsi they don't have to process monthly enrollment files they don't help to process payroll deductions. From the dentist's perspective we think that's really where the revolutionary part of this is because you know it is really in some ways the answer to dentists who are frustrated with dental insurance and we communicate that when we're recruiting dentists that Chewsi helps them get more patients and more service per patient it really helps with case acceptance. So you know I can give an example of someone who we're typically our annual maximum on the insurance side is $1,200 times $2,000 there is no annual max with Chewsi. So you know we've had a patient who as much as 27,000 dollars worth of dental services and still saved roughly fifty five hundred dollars in that care. So Chewsi gets that person savings they take it on their own Chewsi doesn't get in between the relationship between the dentist and their patient that clinical relationship is preserved, you know there are no delays and authorizing care there are no denials as long as that dentists and that patient agree on the course of action Chewsi here to help that person afford it. We have compared to the fee schedules typically more than a PPO would pay a dentist and we pick up the credit card processing that typically costs about three percent of a transaction for the dentist. So it's a win-win I think it's a difficult concept for dentists to understand because it doesn't really exist today, it's not like a discount dental plan because the users enough to pay a monthly cost of fifteen to twenty dollars as they would. For the Chewsi user they simply download the app for free and they use it with no monthly charges, so they paid nothing less than until they have a service then they pay the dentist for that service using their smartphone app to Chewsi app while they're in the office they simply authorize that payment and they're done.

Howard: That is amazing, is it only available for dentists in Rhode Island right now?

Joe: No we intend to make it a national product, we started first or an island once we had created and perfected the app we started recruiting dentist by three digit zip code and once we had enough dentists and the three digit zip we'd activate the app. So we went live in Rhode Island you know but a year ago we started out with about 20% of the dentists in Rhode Island participating with Chewsi we're now at 50% and we think that over time we'll be at 70, 75 %. We're now live throughout all of Massachusetts so there's another six and a half million people who can get access to this app there and we now have announced plans that have contracted with partners to introduce Chewsi into nine of the states. So we're now starting to recruit in Connecticut, in New Jersey, Hawaii, not exactly a contiguous expansion Iowa and Nebraska, Missouri parts of Kansas parts of Illinois and I really think that by the end of this year there'll be another 10 states with Chewsi will be starting to be introduced to population there but with these nine additional states Chewsi will be available over the next few months the 36 million people in the country.

Howard: That is just some amazing disruptive numbers, now that's not part of Delta Dental of Rhode Island you had to start a separate company first circle Inc and Altus dental insurance company so it wouldn't violate your Delta Dental contracts.

Joe: Exactly there are strict and really appropriate prohibitions on co-branding Delta Dental with another product unless there's authorization from the Association and so Altus dental by example actually competes with Delta Dental of Massachusetts there so we can't use the Delta neural network we had to create our own brand for Altus and that's been very successful we filled a niche that really was not being served particularly for the smaller employers and municipalities. So we have a hundred eighty thousand people with Altus in Massachusetts and that's preformed I'm very well, but expanding as an insurance company it takes a lot of time and a lot of money and since Chewsi doesn't have those regulatory restrictions we can go national much faster.

Howard: Yeah it's a highly regulated industry as an insurance

Joe: It really is it's a highly competitive industry as well and so that's one of the reasons why insurance isn't as friendly to dentist is because you're competing against other insurers and the the objective really is to you know get that level of coverage at the lowest possible price otherwise your client goes to another competitor. So with Chewsi that's not the case for the first time I think in history a so-called carrier like Chewsi is aligned with dentists you know the more a dentist does actually the happier we are you know it the more something costs the happier we are because what we're trying to get as a model is for our customer at the Chewsi member to save roughly twenty to twenty five percent on the service and we're not trying to get to the lowest possible price, we're trying to get to a price that that person can't get on their own. So as dental submitted charges go up year after year we're gonna monitor that and increase fees we've already increased fees twice in Rhode Island for Chewsi dentists. So we want to lock in savings that are in that range that a customer sees value twenty to twenty five percent but we're not trying to get to thirty five or forty percent does us no good. So we intend to keep on increasing fees and as you probably know around the country you know plans have if not frozen fees even roll them back in cases in order to meet the demands of employers. So this is a new product it's a new niche it really is going after a different market than what insurance goes after but it's complementary to insurance too and I think over time we'll see somewhat of a ship from some people who will drop their insurance when they look at the economics of this and let me give an example that in Rhode Island and in other states I'll describe a small employer at somebody who has a hundred employees or less and in that model the administrative costs in that insurance premium typically averages for everybody 20 25 percent of the premium. Then typically there's a broker Commission involved and that's often around 10% and then you have premium taxes and you had the ACA fees when they are in effect the Obamacare fees, you get up to about 40 percent of what that premium is that doesn't go to care and with Chewsi better than 90 cents on the dollar goes to care. So it's a model that gets more dollars in the hands of the of the practicing dentists and more value to the Chewsi member.

Howard:  Wow so the broker fee is 10% your dental insurance company to the admin overhead fees 25% and the last part the Obamacare regulations.

Joe: Yeah premium taxes and Obama care fees are typically 2% each. Now Obama care fees have been you know waived for two of the last three years so they're not in effect but they could go back into effect next year who knows but I'm talking about the insurance side. (Inaudible 11:59)

Howard: What was the 2% of Obamacare and 2% what?

Joe: Rhode Island like many states has a premium tax and in Rhode Island that premium tax is 2% and the ACA fees that are charged when they're in effect and they were suspended last year and they're going to be introduced again, are again 2 percent of the premium to pay for all the costs of running these exchanges. So 20 follow-up well Delta Dentals administrative expenses as a whole a 9% Lodge employees with the economies of scale pay less than that small employers pay more than that and so it makes it you know a difficult proposition when 40 cents on the dollar doesn't go to care for small group insurance and with Chewsi ninety cents on the dollar or more goes to care.

Howard: and so right now on Chewsi you said 50 percent of the dentists in Rhode Island are already participating

Joe: That's true yes

Howard: Well that's a I mean you already hit a homerun that's a I mean how yeah you couldn't have started a business and expected to have more success than that, I mean you got it you got a considered a homerun victory at this point.

Joe: Well we're very happy with that and the momentum is off the charts. I don't know if you are familiar with this term Net Promoter Score have you heard that term?

Howard: No

Joe: It's a term used by many businesses across the country to determine customer satisfaction and what it essentially does is it asks the customer whether or not they are likely to recommend this product or service to a friend or a family member and on a scale from zero to ten that person answers but it's such a high bar to do well on this that only 9s and 10s count you and everything else is the detractor or neutral score and so some of the best country companies in the world have Net Promoter scores that are in the 30, 35, 40 % range. Chewsi right now is averaging 74 which means that the concept is really embraced by consumers they love it and so dentists look at this and see I understand that my patients are going when they hear about Chewsi they're gonna want to use it and so I'm gonna go join because of all the value that Chewsi brings to the table for me increase case acceptance more patients more services no interference or I'm afraid that couldn't possibly lose patients and you know we really hope and expect that it's more the former we've got some dentists starting in Rhode Island's who are introducing Chewsi we've seen an office with more than 300 transactions so far for to see patients never expected to be that high. We you know had one of them coined a phrase for their patients who don't have insurance when they go to pay cash check or Chewsi. So it's really gaining on and with that momentum like a landslide.

Howard: Tell us where you got the name... I'm a dentist I'm thinking chewing food. Chewsi, is Chewsi from chewing food?

Joe: Well we we kicked it around a lot we wanted something that was fun and we wanted something that would appeal to Millennials and so forth and it wouldn't really be associated with insurance product you know something that really was disruptive and new and creative. We had another finalist that that didn't make it that was chump that was a little bit too aggressive for a product name. So we thought Chewsi had great acceptance and we're happy we chose that.

Howard: That's right, I want to go back I don't want you to put your dad hat on pretend that your daughter just graduated from dental school. They're just arriving you know they say a millennial someone who just arrived at the year 2000 kind of like getting your car keys in your first car and your first job, these people are rising and they're so confused on so many of the terms like. I wish you'd explain the difference between, I'm just gonna throw a list of education things like what is a insurance versus a benefit? Like I don't think dental insurance is insurance, it's more of a benefits only really a benefit there's someone else pays for it. So when you first talk about that is dental insurance is dental insurance an insurance or a benefit?

Joe: Well I think dental insurance is different than lots of other types of insurance because it really does two things so typically it really pre pays for the things that happen often preventive and diagnostic services and then it helps spread the risk for higher cost restorative services. So there's a really components of both you know a prepaid service as well as insurance and while the employer pays for that it makes it easier to have insurance because it's easier to have a large risk pool to control those costs. As employers have started to drift away more often from paying for insurance but make just making it available in many cases the employee pays the whole cost, then it puts the employee in a position when they have to make a decision themselves on the cost benefit as to whether or not insurance is worth it and that's why I think when Chewsi is as part of the equation and we have Large employees who have a high option plan and a low option plan now imagine putting Chewsi alongside that and I think that the high option plans are going to be extinct because people will buy the low option plan which is inexpensive and then use Chewsi to self-insure for all the costs that if they'll have to pay for unless they use.

Howard: So an individual can buy Chewsi themselves they don't need to go through a broker a work broker or their employer?

Joe: Yeah

Howard: So that's that's the whole thing you're doing an insurance plan that I individual can buy.

Joe: Yeah I didn't want to say buy because it's free, the user simply they go to the Apple Store or the or the Google store to download the app Chewsi Dental is there's the name they download it for free and then they register and when you register you will see you can find your dentist and if your dentist isn't participating there's an opportunity to enlist them to join us or you can select from some others and so in Rhode Island if you pulled up the app and put it in Providence or a zip code here you would see more than 500 dentists within a 35, 40 mile radius of you to choose from. You then will call your dentist for an appointment it's old-school technology because for the most part dentists don't want anybody connected to their software practice management system that's what it would take it would be very expensive as well and then when you go to the office for your appointment the office will check you out and process that transaction. We built a web portal for the dentist to use we also built another tool that would integrate but so far our dentists much prefer the web portal to transact and what happens is they will process that transaction while you're in the office it'll go through the cloud to us and it'll show up on the users phone in one to two seconds and they'll list the services that you had and you simply hit I approve and you're done. The dentist transaction gets processed while you're in the office just like any credit card transaction it takes a day or two to cleared for the funds to get there but all the risk is going you receive payment while they're there there's no waiting for someone to approve that transaction and process a payment for more or go through the insurance company your process it's there. So the user doesn't pay anything for that service in addition to what the cost of the carries is on the phone, no monthly premiums, no charge.

Howard: How do you make money off this?

Joe: Their's a small difference between the amount that the patient pays and the amount that the dentist receives. The dentist has a fee schedule that they agree to and they get paid 100% of the fees in that schedule and those fees are typically higher than they get paid from PPOs and they'll continue to increase as I mentioned earlier because the incentives are to lock in the range of savings not the lowest possible price for the customer and so dentists who don't trust insurance companies anymore and I understand why because there's been a squeeze on reimbursement Chewsi takes that that dynamic away. So if you want to look at the dollar and how its split Chewsi picks up the cost of the credit card transaction that that dentist would otherwise have to pay for that patient in their office and that typically runs for the dentist's around three percent or so of the costs. So they ought to worry about that that comes out of the dollars that are being paid there and then we collect typically it varies by procedure but typically about five and a half percent or so of the transaction is what we retain in order to build the technology market it and so forth and again think about what I said before 25 percent or so of the premium goes to administration for a small group and we're talking about five five and a half six percent on average here so it leaves a lot more of what is being paid to pay for care.

Howard: Wow now is Delta Dental all the other Delta Dental's smiling and waving yawn or are they fearing you?

Joe: That's interesting, it's a I think it's a great opportunity first for certain but not all Delta Dental companies who i hamstrung they've been successful as delta dental plans and they've maximized their market share perhaps not totally but significantly so and they now geographically limit as to where they can sell their product. I mean think about us in a state the size of Rhode Island we have the the administrative technological capabilities to serve 50 times as many people as we can sell to here. So for us to expand and diversify we had to start Altus Dental so we could get more people using that platform and keep the cost lower and with Chewsi there are no Geographic barriers. So what we're saying to some of our sister plans in the Delta system and again this is not a delta product they have to look at this outside of that is that there's a chance for you to become a regional player, you can go beyond your territories. Now not everybody can play that game okay not anybody wants to play that game but those companies who are sophisticated no they can't stay just as an insurance company they have a great opportunity.

Howard: I'm going to go back to educating my homies cuz I know from them, say in the comments after the YouTube video your name, your age, what country you're from or shoot me an email but every time they send me an email they're their babies, I mean again a quarter in dental school the rest are all under 30, I'm we're probably the two oldest guys they've seen all week. When they come out of school they hear a lot of people say well I don't take insurance I just have a fee-for-service office  but in the reality is I mean America is a big country there's 211 thousand Americans license to practice dentistry. What percent of dentists would you say have no affiliation cuz with our insurance because like Delta Dental if you sign up for Delta Dental you agree to a fee schedule, so Delta Dental is a PPO.

Joe: True in Rhode Island and I look at the country and say that there are certain parts of the country that are very strong with insurance okay the Northeast the West Coast the Midwest those are areas where dental insurance it has been very successful there are other areas where there are more DHMOs or a lack of insurance you know the Southwest the southeast are areas where there's more DHMOs and dental insurance is not as prevalent unsuccessful...

Howard: What's DHMO?

Joe: Dental health maintenance organization those are the capitated plans that dentists typically don't like.

Howard: Right so those are heavy so in the southwest and the southeast.

Joe: Southwest in the southeast.

Howard: So just the whole south.

Joe: Yeah pretty much I mean yeah I think that the Midwest kind of breaks it up a little bit there's a lot more insurance there but if you look at Rhode Island, Massachusetts you know New Hampshire and so forth more than ninety percent of the of the licensed dentist in these states accept insurance if they're part of the Delta Dental Network.

Howard: Can you be more specific than the 90 percent, like take Rhode Island like 1 percent is it 90s and 95?

Joe: Rhode Island is 92 percent Massachusetts I think is 94 percent similar amount in New Hampshire. So you're gonna see that in a delta dental system as a whole the whole country even places like the southeast and Southwest more than three of the four dentists participate with Delta Dental across the country. So there's lots of choice, you know here...

Howard: What would you say to this young girl she's 25 she just walked out of I mean how many dental schools in, Rhode Island doesn't have any dental schools does it?

Joe: Rhode Island doesn't have one no.

Howard: but Massachusetts right next to you has how many three?

Joe: Two, Tufts, Harvard and UConn has one across the border in Connecticut.

Howard: Okay so let's say she comes out of Tufts and she's $400,000 in debt she says I'm gonna go downtown Boston I'm gonna open up a dental office and I don't want to deal with any insurance I'm just gonna be completely non producing any dental insurance company how doable and probable is that?

Joe: Not likely really not likely especially for lifestyle okay I mean if what we see is that generations stay together where a son or daughter of a practicing dentist will join their practice and eventually take over their practice or they'll sell that practice to a DSO at some point in time and so it's dentistry is starting to follow the model of medicine where you'll have larger practices and more administrative services to make that easier in some ways but it changes the lifestyle you are less of a decision maker and so you mentioned earlier that you know some dentists will say I'm not gonna take insurance I'm doing you know charge what I want to charge, that's not it's not reality and that's why I think again Chewsi helps bring patients to that office who doesn't want to accept those deep discounts and insurance and provides a way out. It provides a balance okay and I think over time the more dentists embraced something like Chewsi and right now I say something like there's nothing else like it out there but the more dentists embrace Chewsi the more likely they're going to have better control of their lives.

Howard: Well I was so glad you came on because and quite frankly you must be, do you realize that I invited all the Delta Dental CEOs to come on my show three years ago and not only do they not come on I didn't even get my email returned. I mean you think you can use hit reply and say no but that's how bizarre the relationship is for the insurance companies doesn't and I feel sorry for them really. I mean I couldn't imagine selling a billion dollars at dental insurance in California Delta Dental and not ever being invited to speak at the CDA meeting I mean that's just to me that's just rude. I always tell the young kids it's a fight finger test is your new dental office gonna be faster easier higher quality lower cost or more miniature and if it doesn't answer it should answer all five of those and if you say I'm gonna see less people for more money and make everything more expensive it's like I'm pretty sure that's not the way economics works and I've always wondered you know a lot of dentists complain, well everybody in America during the Obamacare debates was talking about how much money was spent an admin. I was surprised that Steve Jobs came out with a cell phone in 2007 and here it is 2019 and when people come in my office with insurance we still have to hire a human being to call the company and verify the insurance and it's like why isn't that just an app why don't they just pull out their smartphone which has more capacity.

Joe: That's Chewsi

Howard: I know that's why I'm so excited to hear you. I mean well shouldn't they have shouldn't all of the dental insurance companies done this 10 a decade ago?

Joe: You know I'd like to see them all become partners of ours over time and I mentioned how Chewsi wraps around insurance, Chewsi's agnostic. Chewsi doesn't care if its wrapping around Delta or blue cross or Net or Aetna or Cigna doesn't make any difference okay whatever that plan doesn't cover that insurer Chewsi steps in and covers that next that next service. So yeah we think we're onto something really big, we think the momentum that we hear from the marketplace shows that we think that having already gotten the acceptance a commitment from a number of other Delta Dental companies around the country to become our partners in their States shows that momentum.

Howard: Really nice

Joe: Yeah well we'll be up to where you know all the partners right now are Delta Dental companies

Howard: Okay

Joe: and I think that we'll have as I said earlier 20, 25 states by the end of 2019 we'll be on board.

Howard: Well come on you know I only care Arizona I'm in Phoenix what's your connection with a timeline on Arizona.

Joe: I'm actually gonna be out there in February and there's been some interest yeah.

Howard: So you're gonna be some interest you're gonna be at our local Arizona dental AZ?

Joe: I am, I am in February.

Howard: Well well tell him I invite me over I I would like to uh do lunch with all yeah maybe we can do another i podcast you know on that

Joe: I'd love to have lunch with you yeah

Howard: What that let's yeah let's have a Arizona Delta Dental I think it's been a while sign for there I was very very lucky in my Delta...

Joe: I can't commit I can't commit the Arizona plan to doing that I can tell you that I'm gonna be out there they've expressed an interest in in in talking about and moving forward on Chewsi, that's what this is about to explain it and create a detail to them we've had some significant discussions and negotiations to date they see that the value they see that it's important to diversify and expand in that way and so you know I think we were all trying to separate the limitations of insurance from the opportunity of Chewsi and I think you can have both although you know if you think about it and step back for a second that there's lots of threats to dental insurance that don't threaten other products. Something as simple as bundling okay when a medical carrier give us a credit if you combine medical and dental those credits are disproportionate to the value okay you know we fought that here where a local competitor would give a 1% credit on the medical plan if they got the dental business now think about that where our average admin for the company as a whole is 8 or 9% 1% of a medical great it's worth 25 or 30 percent of a dental rate. So it's an artificial inducement and the regulator's here saw that and it stopped that but but also I mean just looking at the connection between periodontal disease and many many medical conditions diabetes, you know many many heart conditions and so forth hypertension. There's lots of reasons to cooperate on data so that patients can get a better outcome by making sure that someone who has diabetes is getting the periodontal treatment. So this is all about data it's all about reaching out and making sure that people know the value of the oral health care. We just this week with the shut down for the furloughed employees we offered any government worker who's been furloughed in Rhode Island Massachusetts a free exam and cleaning from Chewsi and so we want to make sure they don't go that that important oral health care.

Howard:I'm gonna ask you something on you're born and raised in Rhode Island correct?

Joe: I am yes

Howard: I'm sure you're a world traveler I'm back to these young kids it must be very confusing especially the political times. I've lectured in you know fifty countries all around why is healthcare such an emotional political almost insane you know you almost can't have a discussion on without some form of insanity whereas for the rest of you know Canada, Australia, New Zealand, England, France, Europe, Scandinavia. Why is it so emotional here in the United States and so non-emotional everywhere else?

Joe: Yeah that's a that's an excellent question, I don't know if their is any one answer to it you know I I think it's you know somewhat similar to control you know health insurance started to be added as an Employee Benefit you know in the you know 60 years ago 70 years ago when you know during the war there were difficulties passing on wage increases so benefits started to be added on and health insurance was one of the first benefits to go that route but people didn't focus on a long-term cost of that. So we got into trouble with in pensions and and in health care promises that weren't affordable and then there's lots of things I mean there's just too many different players out there and people look at Medicare and saying how little is focused on an admin in Medicare but there's no marketing in Medicare there's no competition in that and it's and the other thing is that whether it's Medicare and Medicaid that those big buyers you know the the cost that are not borne by those types of payers have to be borne by somebody else. So there's a there's a course subsidy that takes place of Medicare and Medicaid by those who have private insurance or no insurance at all and obviously I think we all can talk about you know the problem with prescription drugs, how you know we create more of the R&D; for successful life-changing prescription drugs but we also subsidize the rest of the world because we pay higher prices for them. So there's lots of room for change, there's lots of room for for data sharing where it's not such a fractured health care system. Dental and medical a good examples of that, you know dentists and and physicians don't really talk to each other very much. We did a clinical research study a while back with the University of Buffalo Dental School a guy named Bob Jenko heads up that dental school and the purpose of that was to determine whether or not a dental office was a better location to screen for diabetes or prediabetes with the logic being that people see the dentist more than they see their physician. We did that we screened a thousand people in more than 20% of them who had not and the screening was you had to not know that you had diabetes or prediabetes before then more than 20% of them found out they had diabetes or prediabetes but still getting the dentists and physicians to work together to then diagnose it and treat that was a failure. So it's a massive opportunity but it didn't work and it should work there was simple a 1 C test to find out if you had it you scored better than the 5.7 you're screened go see your physician to be diagnosed and treated and then combine the care of periodontal disease and diabetes to make sure that that whole cycle is connected.

Howard: You know when I was an MBA school at ASU the the godmother of healthcare economics was up by you Harvard's Regina Herzlinger, are you familiar with Regina Herzlinger ?

Joe: I've heard the name I'm not that familiar though.

Howard: Oh my god is the but just an amazing podcast but I'm gonna ask you the same question I asked her if you had to you know see where America's been to last you know two hundred and some years. If you had to roll forward like two more generations like fifty years from now do you think it'll be more like a single-payer system in health care like Canada or do you think it will not be? I mean are we moving in that direction or is there just barriers that will not well?

Joe: I mean as you know this this country is so fractured politically that's really hard to answer that question because you have extremes who want it and don't want it but I think sure we're moving more towards it you know it's it's a it's it makes sense to move closer to that but it also makes sense to have things that wrap around it, so that single-payer if you want to call it that can't cover everything and there'll be things that you want to buy and can buy then I covered by that basic policy at some point in time that'll be available to you and the competition would be who can provide those wraparound services at the best price of the best service but I think that core I mean as a country we have an obligation to make sure that those who need health care have it and that it's but it we get to that when you get to single-payer lots of things happen because you not only get regulated benefits and costs you're regulated reimbursement to. As physicians know with Medicare and Medicaid reimbursement they make a lot less money than you do in private insurance most of the time. So the whole system changes when you go to that model.

Howard: So would you say the biggest front is the providing physicians and dentists money is the answer what's the question do you think it's more of a union mentality says we know this is gonna be a really big affront to our earning power and income and is that the issue?

Joe: In terms of moving forward on Chewsi or moving forward on?

Howard: On a single-payer mixing system

Joe: Well I think in some way single-payer for a dentist will look like the dental health maintenance organization. Okay that the dentists will have to accept a certain level of compensation or reimbursement in providing a whole menu of services okay and that's a model that has good and bad connotations. You know on the one hand it leaves the dentists free to determine what their patient what they need it also provides a disincentive to providing certain levels of care. So it has to be managed totally opposite the way insurance is managed, insurance the concern is by the insurance companies are you doing too much with the DHMOthe concern should be are you doing enough. Right and so here in Rhode Island we created the own as far as I know is still the only one, the only paper performance system in the country for dental insurance and what we do is we paid out over the last seven or eight years we paid out over twenty five million dollars in bonuses to dentist for metrics. Metrics in terms of do they use technology to make sure the administrative costs are controlled that's relatively a simple thing to do because the technology is so easy to use. Are they doing too much of something and not enough of another, so they get rewarded if they do more fluorides, they get rewarded if they do more sealants, they get rewarded if they do more care for at-risk patients okay. So it really is the way and you know what 90 percent 95 percent of the dentists in the state get a bonus and they are starting to practice more similarly to each other when they get more data to see what that is. They don't know till that point time, they don't know how they compared, now they know.

Howard: I wish you would use that data to go on Dentaltown and solve some of the longest-running questions like which lasts longer a silver filling or a posterior composite and you know of course every dentist says well I don't care cuz you're talking about other people's work in my hands my fillings are perfect and they last for eternity and every filling I place you know someday it'll go to heaven and it's like I don't know. I wish that that is my biggest dream of the big insurance companies that they would turn their data over to algorithms that just answer simple questions like if you did a root canal built in crown how long does that actually last before it's extracted. If you replace that with an implanted crown how long is that actually last before it's extracted and if you do a posterior amalgam, I mean look at an amalgam bursting a positive mean ones metal and half of the ingredient is mercury you'll never find that in a multivitamin the other half is silver zinc copper and tin. The whole things antibacterial made a metal obviously that has to last twice as long as an inert plastic tooth but the dentist they only believe what they want to believe and it would really be cool to show them, oh well here is Delta Dental of Rhode Island here's a hundred million claims over the last ten years, here's how your mathematician sees it.

Joe: Yeah and you know in fairness to the system we try to do a lot of that we don't do it as well as it can be done but we do combine that data that we all have to determine what lasts okay. So how long should the crown last should it be five years should be seven years and what are the circumstance what are the exceptions to that how do you not have you know a hard-and-fast criteria that doesn't work all the time and how do you adjust legitimate cases where it doesn't okay, where this patient is involved to fail not the dentist's fault okay. So but let me just go back for a second because again with Chewsi, Chewsi does not interfere with that decision so if you and your patient want to go forward with the composite go ahead okay. It's your decision we help finance it, but looking forward that think about how slow insurance is to agree to pay for lots of critically improving dental procedures okay. I mean they take years until their cost is justified and they're you know just beyond the doubt saying you know implants being in the standard of care how long does it take all right. So now look at Chewsi and say think about the types of services in price of being introduced today that are going to be clinically sound but it'll take ten years for insurance to agree to pay for it. Chewsi will pay for it as soon as you the patient in dentists agreed you want to have it done. So Chewsiis going to help really expedite the adoption of new services and technologies.

Howard: You know we have nine specialties and most of them are pretty smooth but a couple of them are up site are under a lot of disruption one of them is pediatric dentistry with silver diamine fluoride or how are you seeing how are you seeing silver diamond fluoride in Rhode Island?

Joe: You know Howard I wish I could answer that question for you, I can't. I could research it for you and get back to you. I'm not aware of us having a problem with it okay but I can get back to you. You know one of the issues is that in a state decides we have 550 dentists or an island we probably have 10 periodontists.

Howard: Yeah

Joe: They are very large practices you know and again as you know general dentists are doing the things that piedadontist is doing, general dentists are doing things that oral surgeons doing. So it's not unlike anything else where the general dentists that by their own choice and training touches so many other so-called specialties, weather their comfortable with it or had that training.

Howard: Let me go to another direction and DSOs, when these kids are in dental school a lot of DSOs will come in and offer them free pizza so of course you get all the hungry dental students for lunch and then they load them up that when people like our age when when I was little all the pharmacists work for themselves, now they all got rolled up into a big Walgreens or CVS and they're in there saying you basically don't have a chance to go out on your own and that they're gonna have half of all the dental market within ten years. What what do you think of those bold claims that I keep hearing dental students emailing me hearing these lectures?

Joe: I think from a my opinion there's two different types of DSOs okay. There's the ones that are very visible from a marketing perspective you know the the Aspen dentals of the world okay, who market themselves very aggressively and own the business. Then as a DSO so by administrative efficiencies to you as a practicing dentist and it's almost invisible so in that respect I think that's...

Howard: Like a heartland

Joe: Yes that that deal behind the scenes and making it more efficient so that you can work less hours you can make more money but they're not and then there's all different flavors in between, but on one end if you have the DSOs that make you more administrative efficient that's a good thing if you have the ones that make you work for them and they market it and so forth and so when we recruit dentist for Chewsi here's what we do, we go to DSOs who and even you know solo practitioners who say you know what I have a I have an in office plan. I have a discount of range but I have with my patients and we say well that's not bring you any new patients, nobody's marketing it for you okay. You have a way to deal with patients who are asking for some relief but you're not getting new patients along those lines. So Chewsi gets those patients in your door and then you know provides a simple way not to have to barter a simple way of saying you know what I can't afford three crowns download Chewsi you'll get you make those savings and I take myself under that bartering process but the DSOs that we try to recruit and not the Aspen's because they're out there marketing those services themselves they honestly need Chewsi to bring them more patients. I think we're looking for different patients I think that's the way that works and so yeah if I look at this I think yeah we're doing who knows how fast but certainly directionally towards more dsos you're saying half. I would I look at the medical model first and see where that is today and there aren't many physicians who are practicing on their own, they're all part of group practices at first and now they're associating with hospitals. So that that vertical integration and that you know that the center of care has become so consolidated and I think that's gonna be one of the challenges with dentists in the future, five years or ten years now 15 years now won't dentists be part of that center of excellence won't they be part of that medical home I think they will be.

Howard: You know I also get so funny in dentistry were the people that are against the DSOs is the most they're always the ones talking about the need for a CBCT for a hundred grand or a laser for 100 grand or a CAD/CAM for a hundred grand and those are the exact reasons while the why the medical community consolidated. I mean if you're gonna buy an MRI and ultrasound and there's a hundred and sixty eight hours in a week you're not gonna give it to Betty for 32 hours a week when 81% of the week that machine's just sitting there, and plus when I think of health care my first biggest concerns are availability and affordability and when you're solo practice you're open 32 hours a week and that means 81 percent of week you're not open and group practice. I mean like in Phoenix Arizona when you come out here to visit if you go climb one of these mountains, these desert mountains and fall off and break your leg if it's Sunday the ambulance will be there the helicopter will be there and the police everyone will be there but if you break off your front tooth good luck buddy you're gonna have to know a dentist on his cell phone to take you after-hours. I mean there's not a dental office open in Phoenix on a Sunday.

Joe: and how I'll go back to you know that 32 hour a week model is not recent that's been around for a long time but the fact that so many families that they have to wages to survive and they can't take time away from work to be there during those 32 hours and so that's why the DSOs is the Aspen dentals of the world and so forth are part of their attraction is that they are accessible you know and in general I think dentists think that patients know how to assess quality much more than patients do and what a patient sees is quality generally speaking is it's a clean office. I like the personality and hygienists or the dentist okay unless they have really negative experience they assume good quality okay and so that's a real challenge so when you add convenience to the list and you add affordability to the list it picks away at the 32 hour a week dentist ability to add to his patient base and it was I don't necessarily believe these numbers but we've done a couple of surveys for Chewsi, early on in the first few months and again more recently and what we found which I think is extraordinary. I've talked to some dentists and they agree with it but I think it's numbers too big, well we would explain what Chewsi is and the benefit it has for the consumer and in one survey it was 50% the other was 60% of those respondents said that they would change dentists in order to get those savings. Now I don't think that numbers pretty high I don't think that's the case but I wouldn't be surprised if it's 20 or 30 or 40 percent but 50 or 60 and so you run into two types of responses from dentists, nobody's gonna leave me or yeah you know what I'm afraid everybody gonna leave me and I have to make changes in order to keep my patience and you know that the true answer is somewhere in between but no one's bulletproof when it comes to their patience leaving them.

Howard: Well I think one of the answers to that might be there's three publicly-traded DSOs on earth. Two in Australia one in one in Singapore I podcasted them on location in their countries and what they told me is that baby boomers like you and me we lived through before water fluoridation of for fluoridated toothpaste you know 10% of Americans are 65 or are edentulous time two, missing half their teeth at 74 20 % edentulous times two missing half their teeth those people know there's good dentists and bad dentists all that but dentists did such a good job that the Millennials a group of 40 a tooth days 40 a water they've only had cleanings maybe one filling and when you study a millennial and their friend says oh my appendix ruptured and they took me to the hospital to get out they just assumed you wouldn't be working in a hospital taking out appendix if you weren't a doctor and certified. So we got so good that the Millennial see us as the commodity but the baby boomers are still only the ones left to say hey Joe Nagel might be a really good dentist but I know Howard's not he did a root canal on my dad and they end up pulling and he died a week later and blah blah blah. So I think we are really approaching commoditization towards the Millennials and that's what all three of the only publicly traded DSOs say. I want to say on that one deal about dsos another really what about my orthodontists listening to you right now what is Chewsi play with ortho because I do think of the nine specialties orthodontics is under the most disruption with Invisalign is now opening their own stores here in Phoenix, they have one in Chandler Fashion Mall where all the rich people in Scottsdale.

 Joe: Smile Direct

Howard: Smiles Direct already has five in the valley and I just talked to their founders on the phone they might be coming on the show but so talk about the disruption in orthodontics does Chewsi affect orthodontics smiles direct club Invisalign talk my orthodontist.

 Joe: I'm not sure this is a new phenomena but also piedadontist and many general dentists are doing Auto as well and and so you know when you look for auto services you're not just looking for an orthodontist and so I think that's really a factor that isn't fully appreciated. So when it comes to Chewsi yeah we try to recruit orthodontists because in Rhode Island we are maybe an anomaly in that there's a very high percentage of our Delta Dental members who have orthodontic coverage as part of their benefit plan. That's not the case in many other states is not the case the same degree in Massachusetts and so for children you know it's important for them to be able to get access to that because you know there's so many kids who have Auto attributed a thirty years ago they weren't a candidate for it it's a different world today in terms of its exception of the kid who doesn't have orthodontic treatment but the cost is is just so unaffordable and then you get to adult ortho and there are many many more people who are looking for those services that aren't covered by any of their insurance plans. So Chewsi is an opportunity for that to happen and we really want to promote that. We don't need a big of a discount for an orthodontist because the dollars themselves are so big you know you have a $5,000 case it doesn't take a big percentage to save your customer some dollars even the percentage isn't as great as it would be for a cleaning examiner an x-ray but you know in many ways I think for a long time people thought that orthodontist were bulletproof in terms of you know really not this'll be susceptible to a lot of what happens in insurance but as you said you know you get Invisalign and you get smile direct and who knows what's next it's a very disruptive threat to orthodontist.

Howard:and I also think you know I give the people what they want I mean I think a long time orthodontists and dentists have been selling that you need to have this bite and this function and your midline in the middle and making a mountain hill where the people all they wanted was whiter brighter sexier teeth. I mean they just want to go into the nightclub and have fairly straights white smiley teeth they're not they're not asking where the mesial-buccal cusp of number three is and when it hits number thirty and and and these dentists that are extracting teeth.

Joe: If they're asked that question that could be very popular in a nightclub.

Howard: Yeah I mean and a lot of the I mean I remember seeing me I remember what blew my mind is when orthodontist wanted me to pull four or five four bicuspids thirty years ago because that was the only way to fix the midline I was standing in his office and I his wife was receptionist said well where's your wife's midline is it to the right or to the left and he couldn't answer me I'm like okay well you had three kids with this lady sir, midline you know must not be the midline. So you know so when someone wants just whiter brighter straighter teeth maybe they don't want a mountain out of a molehill and maybe they just want something again my five fingers is it faster is it easier is a higher quality as a lower cost is it more miniature. I'm gonna have to go a whole nother subject I only got you for a couple more minutes my gosh I can't believe we're coming up on the hour all I got three more minutes with you. Teledentistry is that a thing is that it is that theory is that reality as a rubber hittin the road?

Joe: We have a subsidiary called Altus Ventures we started a small boutique venture capital firm here as a subsidiary and we looked at some teledensity opportunities and it was there's one called Virtuedent here in Massachusetts and so that model really depends in large form on insurance company's willingness to embrace it because if insurance doesn't cover the teledensity doesn't matter you're missing sixty seventy percent of the population if you can't get into that does you know framework. I think that teledensity does work and has its role I think when you see large employers who want to have the dentist come out to them out to see their their employees and bring a van out there and have your hygienists and assistance out there in the van and what the virtue of that model was we're going to take the x-rays we're going to send them through the cloud to a dentist who's going to look at those x-rays in the consistency of application there's a consistency of treatment plan because as you know there's so many stories over the years about you see ten dentists ten different treatment plans. What employers want is some consistency that's tied to science and I think that's one area where teledentistry can bring some efficiencies where that dentist can service a lot more in terms of patients remotely. Obviously the big cases where that dentist has to see that patient you know on-site but that person who's that dentist who's remote can refer to a dentist who can see those patients too as long as as long as are all part of the same integrated network.

Howard: but so that's Virtuedent  that's Dr. Hitesh Tolani founder and CEO of Virtuedent but the bottom line is there is ZERO standardization in dentistry. I mean so with this so back to you kids back in the day back when we grew up with only three TV stations ABC, CBS, NBC and the big the number one magazine in the United States was Reader's Digest everybody's grandma had it on the desk and they sent a journalist around with an FMX a set of x-rays on a mouse to 30 different dentists including the Dean of the University of Natal school and they got 30 different treatment plans. Then the government the NIH looked at that and said is this sensational journalism or is where it earns is true so they redid the study to a hundred dentist and only got two treatment plans the same and those were the two who said he didn't need anything and then true blame three to a hundred was different. Being on Dentaltown all day every day from 1999 to now, I mean you put up a set of x-rays I mean it's a free-for-all for all people say I mean I see it like a little girl will have a little chip and I'll say smooth it out the next verse say up a little composite there next verse I'll say eight veneers the other one will say orthodontic headgear jaw surgery, Botox. I mean there's just nothing standardized about dentistry the diagnosis and treatment plan is not standardized. I mean how you can't even get dentist to agree that the oral health compromise the switching from a tooth colored filling to a silver filling is cuts a longevity in half. Half of Americans are afraid of the dentist. I mean i'm guarantee if you looked at every ten-year-old boy in the eye and said hey if I do this silver filling no one will ever see it and it'll stay in there till you're 50 years old I bet you half them would say give me that.

Joe: I agree but go back to Vertudent just for a second because I know who has not gotten as far along with this from the insurance as he'd like to but the basic premise was really sound from an employer's perspective because what he basically said it was that that remote dentists is going to be either at Tufts dental school of Harvard medical dental school and you're going to get the the academic no incentive for over treatment or under treatment okay no financial incentive it's an academic view of course if you know not everybody agrees on that but it'd be a narrower range of about comes and those treatment plans and the employers think that's a great idea but it doesn't fit into the insurance model. Why because someone's going to get paid for that if you get paid for a visit for an exam remotely you're taken away from one of the exams that the local dentists can have of the two they may be covered by that plan. So there's there's restrictions in the way the economics work and the assenting but if you have an integrated system that should go away and we're a long ways away from that when we get to a a dental home in a medical home which that was part of that I think you're closer to solving that the conflicts okay.

Howard: Well I may my gosh you gave me an hour your time for first of all everybody clap everybody let's do this your car I give this guy a round of applause he's the first Delta Dental CEO to ever come on. I mean I've done how many shows have I done I mean my god I've done what 1,100 shows, I think like that how many buddy done I've done 1,300 no 1100 and 27. We have nine thousand four hundred of you subscribed to us on the YouTube channel thank you so much 25,000 follow us on Twitter, 36,000 follow us on LinkedIn and my gosh this is the only man brave enough to come on my show. What was this scary Joe were you scared or was it alright.

Joe: I loved it okay and I'd like to you know if we can hook up when out in Arizona I'd love to do that.

Howard: Well you're gonna be out here for Allen Alfred is a CEO of dental donor I only ask you one can I ask you an overtime question?

Joe: Sure

Howard: Okay when I talk to Rick Workman who's the founder of Heartland Dental he's been on the show and his amazing Pat Bauer's on the show and Rick Workman was like me and the fact that when he was in Effingham he would go to the dental insurance companies and say hey you sell claims for everybody in the state of Illinois, are there some cities that have less providers and other and the insurance company said oh my god here's a list of 10 cities that we all wish a Delta of Illinois that some dentists would be there. Well that's where they went I mean my question is and you should look at a dental insurance company as an ally so my question is back to that graduate she just walked out of Tufts she's got four hundred five hundred thousand dollars in CEO debt you're sitting on top of dental insurance you have so much data do demographics matter in the fact that would she have a higher likelihood of success going to a small town of 1500 without a dentist as opposed to downtown Boston?

Joe: I would say no I think it all equalizes in the end a lot of those small places are remote places okay, where Indian reservations, very rural areas okay where now some mid-level practitioners getting expanded practice you know treatment as well. So yeah I only there's any permanent geographic equalizer that way because the vacuum will be filled. If I'm looking have a shortage of a periodontist in a certain area that's gonna be filled because you know price is gonna matter at some point in time and so I think it's a real hard question as to, I just don't think the economics are as good going forward for any new dentist as they were in the past. I think they can be managed but I think it's a different outlook than it was in the past but it's also different outlook in terms of work/life balance you know. It's a different outlook as far as having to deal with the insurance company because in those DSO somebody else is dealing with them and that dentists hopefully it's just providing the clinical care, so it's it's an imperfect system it'll always be an imperfect system it's heading in a certain direction but I'd love to keep the lines of communication open with you Howard if you want to talk to the time to time.

Howard: Yeah when you come back to see Allen Alfred I would love to get back together with you show you a Dentaltown and have lunch with you and I'd love to see Allen Alfred.  I got my team's got up there and seen him before I I always I mean if you owned a restaurant you about a million dollars of beef a year from a beef guy you should you should have lunch with that beef guy. I mean I love networking the value chain I always lost and I just want to say one last thing about a student loan debt you know a lot of you are really depressed that your five hundred thousand dollar student loans. So let me put that in perspective for you there's no dentist in America who got divorced for less than a million so if you just don't get married and don't get divorce you're already negative five hundred thousand in debt,  a kid I had four kids I mean each kid is gonna be cost you half a million dollars. So yeah it's over half a million dollars of student loans instead of having saying you want three kids have two and said having four kids had two and just don't get married that old. What do you what do you think the average divorce cost the average dentist in Rhode Island in the thirty years you've been watching this what would you just guess?

Joe: I don't know I think the probably the leading cause is not knowing where your wife's midline is and not paying attention.

Howard: and we'll end on that note thank you so much for coming on the show, it was just an honor to podcast interview you today.

Joe: I enjoyed the Howard, I'll pay attention to your podcast.

Howard: Thank you I'll see you in Phoenix. 

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