Specialist
Senior executive at Great Expressions Dental Centers
Agenda
- DSO (dental service organisation) market overview and coronavirus impact update
- Volume expectations across procedures
- Q2 2020 performance and potential to accelerate timelines
- M&A outlook and ongoing impact in CAPEX deferrals
- Pricing environment from OEMs and distribution partners
- H2 2020 outlook
Questions
1.
What pre-COVID-19 key trends and themes were you following in the broader DSO [dental service organisation] market?
2.
Could you outline the impact of COVID-19 on the broader market? How did volumes trend from mid- March to May 2020? Have volumes recovered in June and July?
3.
How have volumes recovered across US regions and in the northeast? Anecdotally, have COVID-19 surges in other areas of the US affected reopening?
4.
How should we think about the economics of a dentist’s office in a pandemic environment? What are the CDC [Centers for Disease Control] guidelines for how dentists should operate? To what extent are those requirements impacting margins due to the additional expense of compliance, PPE [personal protective equipment], limits on patients per day, etc?
5.
What has been the incremental cost per patient for the appropriate PPE? Anecdotally, the PPE cost is being passed onto the patient when visiting a dentist office in New York, but in your practice and more broadly, how is PPE and the added cost being managed?
6.
Do you think offices will be required to reduce the number of chairs? Certainly in your own practice, it seems that volumes have rebounded close to 100%, but what about the broader DSO market?
7.
Could you elaborate on the pent-up demand and backlog and how that has catalysed June volumes? Where is the backlog and pent-up demand today, and how much longer will that continue to be a benefit?
8.
How aggressive and competitive on pricing do you think manufacturers, such as Dentsply Sirona, 3M and Envista, have been during the pandemic?
9.
Who among the manufacturers have handled their DSO customer relationships best during this COVID-19 period? Has there been any stratification? Have any of them gained or lost share with your DSO?
10.
You referred to DSOs facing some challenges getting in touch with some of the manufacturers. Who was that most evident with?
11.
Would you expect to utilise more private label products on the consumables and implants side, given your comments?
12.
How would you expect DSO revenues and bottom lines to trend for 2020 on a net-net basis, given what we’ve discussed? What are some of the factors to consider in assessing leaders and laggards? I understand that it is variable depending on where in the US we’re talking about.
13.
How detrimental do you think a second wave would be? How might the preparedness and the plans put in place for this initial COVID-19 spike evolve in the autumn and winter?
14.
You spoke about rebounding close to pre-COVID-19 levels in June and July. How did you and your practice achieve that with only a fraction of your staff and lower throughput? How do you juxtapose the two in volume recovery?
15.
Could you outline the rough revenue and volume splits on procedures and services such as dental, ortho and procedural? How have those evolved during the recovery phase?
16.
Which brands do you or your colleagues generally use across various procedures? Is Zest considered on the implant side and if so, what are your thoughts on it?
17.
How do you think the expansion of implants vs fixed crowns and dentures in specialty implant centres such as ClearChoice will generally impact the DSO business over time?
18.
What impact do you foresee DSOs having on the dental lab business? Do you anticipate additional investments in new technologies as DSOs expand, and tools such as intra-oral scanning and/or Cerec [chairside economical restoration of esthetic ceramics], and an increase in on-site milling and one-day procedures? Alternatively, would you expect a continued shift to labs in China, Mexico or Vietnam, to reduce costs?
19.
What are your thoughts on converting an acquired practice to a national brand vs keeping that affiliated practice’s existing brand? How do you compare and contrast the pros and cons there?
20.
Do you have any additional insights that you think are important to highlight about the DSO market?
