Basically I was a large corporate guy focused on strategic planning for 20 some years of my business career and got to a point where I was sick of corporations and I was looking to buy a business of my own. I actually looked at 14 different businesses and one of them was a dental lab owned by Mike Lord. At the time I didn't even know what a dental lab did, but the profit & loss statement was strong so I took a closer look. What finally convinced me was the bright long range future that I felt existed in dentistry -- not 3-5 years, but in the 20-30 year category. The demographics alone were staggering -- just think of the supply entering the marketplace with baby-boomers hitting age 50.

Many prominent people in dentistry have gone on record as saying that dentistry is at a crossroads and that in fact many dentists today face a challenge for their survival. It is interesting that someone with your business background and strategic perspective would enter this industry based on the conviction that there was a long range opportunity.

There's a tremendous opportunity. Especially if you look at the marketplace from a macro standpoint. There is so much need, yet there is so little being done to communicate that need. In general, dentists and professionals in the dental industry have very strong technical skills, but have limited business backgrounds. In addition, many things are changing regarding the way dentists do business.

Solo practices are giving way to group models, new reimbursement systems are constantly being introduced, managed care is having a significant impact and new technological advances are coming into the market in record numbers. All this requires that dentists change and adapt in order to succeed. My reason for entering the industry was simple: tremendous need, both on the patient side and on the dentist side. As a resource for dentists, the goal of my company has always been to address the needs from this perspective -- and it is working.

I also predict a shortage of dentists will develop over the next 5-7-10 years. Dentists will have to use all the skills they have, and productivity is going to have to go up. The systems and the operatories are going to have to continue to improve, whether it's bonding systems, prep techniques, impression systems, scheduling, all of those things. I believe those are all areas of opportunity for businesses serving dentistry and for dentists to focus on. Overall, I think dentistry has got a very bright future and I'm excited about it.

What impact will the trend in managed care have on dentistry and on your business?

There are many things that are going to have a significant impact on dentistry and, specifically, my business, but let's talk about managed care... what share of the marketplace is it going to take. Some people have been quoted as saying it's going to take 70% of the market share. That just isn't so. My personal opinion is that managed care, which is really PPOs & HMOs, will take a maximum of 25% to 30% of the market. About 70% of the market will still be fee-for-service dentistry whether it's solo practices or some other model.

First of all you have to define what managed care is. I think Dale Reddig had a great definition of it. He said "Managed care has been around for 40 years, ever since the CDA decided that they were going to do a reimbursement program, and it turned out to be Delta Dental, which controlled treatment and controlled payment." Delta Dental was really one of the first managed care models and we've learned to live with it. Indemnity type plans have really helped dentistry over the years and I feel that it has helped employers and provided a great service to the American public. It was a win-win situation. That's changing now as managed care is beginning to resemble the medical model, which has had such a devastating effect on physicians.

Now, there are different products -- you're going to have an HMO product, you're going to have a PPO product, and you're going to have an indemnity product, (or, I should say, a fee-for-service product), and these products will force the marketplace to differentiate itself. I think you're going to see a real definition of the products and services that are offered to those segments of the patient population over the next 2-5 years. And the public will decide based on their experience with that product what they're going to end up accepting.

And these patient populations are distinctly different. First, there are the unserved, or under- served portion that have very little income and gets very poor service. Then you have hourly workers which are extremely cost sensitive with less need for aesthetics. Then you've got the segment in middle management. And then you've got senior management that will pay the highest fees and request elective procedures. I think the whole system will define itself, if you understand what I mean, and dentists will line up to serve those different market segments.

The danger for some dentists is that they try to serve everyone. I think blended practices will ultimately be a very small part of the marketplace. The majority of the marketplace will be served by dentists or practices geared to a particular type of patient and managed care has everything to do with this transformation.

The big "if" here is whether dentistry can get its act together, and by that I mean the companies which supply the dental industry with products and services, which represent only about 10%-12% of that 44 billion dollar business -- they need to support dentistry. The other "if" is if all the dental associations would think more about the business of dentistry, rather than just the profession of dentistry, and start focusing on the more strategic issues of quality and delivery and ideal practice models.

And I don't see that happening anywhere. I don't see that in the ADA yet, they're looking for the silver bullet -- for direct reimbursement to be the solution. I'd really like to see a coalition between the supply side, which has some excellent business management skills to offer dentistry, and the dental profession itself, including dental schools. I'd like to see them start to define the issue of managed care a little more uniformly and figure out how to deal with it. I think that all of these separate forces that make up the dental industry, working together, would go a long way towards resolving the "problem" of managed care.

You mentioned value-added as a primary way of insuring success. Do you feel that the managed care model presents a contradiction to this principle?

Absolutely -- I think that's dead right! I think that the dental patient population is going to segment which, in turn, will force the creation of different practice models. The fee-for-service model will always have the best ability to provide advanced procedures and higher levels of care, but only to a specific sector of the market. I think the dentists that don't do those things will end up serving the PPO side and HMOs.

Dentists have to become more skilled at identifying their customer needs and then bringing the right products & services to them. Dentists have never been taught to do that. They are not marketers. Marketers are people that listen to their customers and respond with the products & services that meet the customers needs at the appropriate price.

On what segment of this changing marketplace will you and your company focus?

We are focusing on the value-added upper tier. We're very heavy in developing new technologies and understanding the needs of our clients and the needs of their patients. This is our whole philosophy -- understanding the customer and adding value -- we know who we serve. We're looking for dentists that want to differentiate their practices from the normal day-in and day-out blended type practices that there are today.

I feel strongly about the development of composites, indirect composite in-lays, replacing and making a more natural looking tooth, and sometimes a much more functional tooth. The empresses, veneers, bonding, and other aspects of cosmetic dentistry -- these are the things that we are focusing on. Productivity is another critical element of our business. We measure productivity by the amount of income per chair hour, the same way the dentist should.

What qualities should a dentist look for when choosing a dental laboratory?

First of all, the range of products and services offered must match the patient population they are serving. Then, they have got to look at quality. And finally, experience.

Lord's has 126 people, so we're a pretty big lab, and one reason I bought a large lab is that I think it's a real knowledge base for the dentist. We see hundreds of cases a day, so we know what works and doesn't work. I think its important to choose a lab that has a great deal of experience and can help and work with the dentist as a partner in going through tough cases and bringing different solutions and different approaches.

Finally, is your lab a true partner? We stress a consultative, partnership-oriented relationship with our clients. We've set up continuing education programs, with both lectures as well as hands-on, to help the dentists know the techniques, both mechanical techniques and clinical techniques. We' re partnering with the Pride Institute in developing a patient communications program so that once a dentist knows how technically to provide these services, that he or she can present them to the patient as well.

What would you recommend to a dentist seeking to grow a thriving and successful practice?

I would recommend that they focus on the patient/customer -- on meeting the needs as well as the wants of that patient/customer. At Lord's, we do this same thing. In fact, it is what any business must do in order to be successful. We have even established an advisory board to determine what the needs of the dentists/clients are, then we design products and services to meet those needs. I think dentists have got to do the same thing. They've got to understand the needs and wants of their patients and fill those needs.

Also, for a dentist to be successful today, they need to develop their skills and rely on the skills of experts within the dental industry -- they can't do it all themselves. They must utilize their own skills and other resources available to them. These resources might be a quality dental lab or they might be a practice management expert. What I'm saying is that you must go out and get the skills that are needed to run a successful business, and implement them in your practice. I think to be successful that's what you've got to do.