Matt Ornstein on the Future of Dental Brokerage
In this episode of The Dental Economist Show, host CRO Mike Huffaker of Planet DDS welcomes Matt Ornstein, co-founder of Dental Pitch Brokerage and owner of Oak Dental Partners.
Join them as they dive into these insights about dental brokerage:
- Maximizing Practice Valuation: Matt shares his expertise on how to significantly enhance the value of dental practices by focusing on profitability and operational efficiencies.
- Navigating Economic Challenges: They discuss the impact of rising interest rates on dental service organizations (DSOs) and strategies to manage debt while maintaining strong free cash flow.
- Leveraging Technology: Matt explores how AI-driven diagnostic tools and innovative tech solutions are reshaping the dental industry and driving practice growth.
- The Role of EBITDA Multiples: Insights into how EBITDA multiples affect the valuation of dental practices and the importance of financial metrics in successful transactions.
- Transforming Brokerage Models: Matt’s experience with Dental Pitch Brokerage highlights the shift toward a more transparent and client-focused brokerage approach, bridging gaps between buyers and sellers.
About the Guest
Matt Ornstein brings a wealth of knowledge from his extensive experience managing around seventy dental offices and navigating the complexities of dental practice management. His company, Dental Pitch Brokerage, is dedicated to improving the dental brokerage process, ensuring more efficient and successful practice transactions.
Episode Highlights
Impact of interest rates on dental practice valuation
Matt discussed the significant impact of rising interest rates on the dental industry, particularly for dental support organizations (DSOs). He illustrated how an increase in interest rates can severely reduce free cash flow, which is crucial for reinvesting in and growing the business. He emphasized that monitoring free cash flow is vital because, without it, a dental business can quickly become unprofitable, regardless of its EBITDA.
Challenges in the dental workforce and impact on practice management
Matt elaborated on the challenges of managing a dental practice compared to real estate, focusing on the human capital intensity of the dental industry. He highlighted the staffing shortage of dentists due to more retirements than graduates, the difficulty of replacing highly skilled professionals, and the increasing competition for qualified staff. These factors, combined with rising costs and static insurance reimbursements, create a challenging environment for dental practice management.
Adoption of AI and technology in dental practices
Matt highlighted the critical role of technology, particularly AI, in enhancing the financial success of dental practices. He mentioned specific AI tools like Pearl AI’s “Second Opinion,” which assists dentists in diagnosing issues from X-rays and ensures treatments are medically necessary and insurance-eligible. He also praised Patient Prism, an AI-driven tool that analyzes patient calls to improve appointment scheduling and treatment acceptance. These technologies help optimize practice efficiency and increase revenue.
Innovative approach to dental practice brokerage
Matt introduces the concept behind Dental Pitch Brokerage, a company he co-founded to facilitate more transparent and pleasant transactions between buyers and sellers of dental practices. Unlike traditional brokers who often isolate buyers and sellers, Dental Pitch Brokerage encourages direct communication and hosts in-person events where they can interact. This approach fosters better cultural alignment and smoother transactions, ultimately making the process more enjoyable and successful for all parties involved.
About The Dental Economist Show
Don’t miss this insightful conversation on the latest trends and strategies in dental practice management and investment. Tune in to the Planet DDS weekly podcast to learn how to optimize your practice’s value and stay ahead in a rapidly evolving industry.