How DSOs Successfully Leverage RCM Technology

FEATURING | Phil Toh (Co-Founder of The Smilist)

What You'll Learn

In this first installment of the RCM Leadership Webinar Series, we dive into the world of RCM software and explore how leading DSOs are implementing it to support their growth goals. We examine:

🔹 The KPIs related to RCM that leading DSOs track

🔹 How The Smilist identifies and qualifies software for their tech stack

🔹  The best practices for integrating a new office into an established RCM process

🔹  Why The Smilist chose Pearly for RCM automation

Want to improve your organization's billing ROI?

Webinar Transcript

Welcome to our RCM Leadership Webinar Series. My name is Jeff Cole and I'm the co-founder and CEO of Pearly, we make revenue cycle automation software for DSOs. And we're currently focused on the patient billing portion and collections.

The goal of this webinar series is to bring on dental revenue cycle management experts and have a conversation that will benefit other multi-location dental organizations. It’s a casual conversation format with the goal of allowing other RCM leaders to learn from each other. Our topic today is how DSOs successfully leverage RCM technology. I'm thrilled to welcome today's RCM expert, Phil Toh. Welcome, Phil.

Thank you. Thank you for having me.

Phil is the co-founder and president of The Smilist, a leading DSO with over 60 locations in New York, New Jersey, Pennsylvania, Connecticut and Delaware. Its milestones have grown rapidly, and we've been fortunate to work with Phil in the Smilist RCM team for nearly a year now. 

Phil is an industry leader in this space, and is incredibly thoughtful about how he's built out his revenue cycle management operations at The Smilist. And on a personal note, when Phil was evaluating Pearly, he asked some of the most detailed and thoughtful questions. So I know that he's the perfect person to discuss RCM and technology.

Really appreciate you joining Phil, and we can kind of dive right into it here. First up, as you've grown and built The Smilist, What's your general approach and principles that have guided you specifically in developing your RCM operations over the past several years?

Yeah, so I'm sure we're not so different from any DSOs out there where we've been so focused on growth that sometimes when we think about the underlying foundation, particularly uncertainty departments, like RCM, kind of falls by the wayside, and we end up not being able to invest, I'll say, the appropriate amount that we should have.

And so, admittedly, when we started talking and even a little bit before it was a time when we just started really focusing on RCM and thinking about how to approach it. And one of the things that always struck me was that the common answer to almost every problem was, oh, “let's just throw more people at the problem.”

And it's particularly in this new environment where we have so many remote workers. How do you train them and make sure we're doing everything right? And then maybe something about our process kind of changes. “How do you train everybody” really led us down this path of how we utilize technology to do a lot of the repetitive, mundane kind of type stuff that was kind of eating up our team's time.

Look, at the end of the day, that wasn't something that they particularly loved doing anyway. And so, we really just started combing the industry in terms of what solutions are out there, and some we're excited about. But maybe more in that kind of “vaporware” category. And in others it was kind of interesting, but how do we continue to build on it? One of the things that I still think is true today is that there's many point solutions--you have this particular problem, we can solve that particular problem for you.

And, and so what we've kind of ended up doing is stitching together, or working with a number of companies to how do we best leverage technology, so that our team members can be more productive, more efficient, and just doing the work that I would say that they have the skill set to do. Not necessarily, joke around. It always bothered me, and it seemed like we have departments where their job is just to push a bunch of buttons right now.

I think the potential of people is much higher than just pushing buttons all day. How do we use that technology to do things better and to leverage their skill set knowledge in other ways?

Yeah, I think that's so interesting. And you talk about leveraging point solutions and putting together different solutions. When we talk to other DSOs there's always this challenge of “it'd be nice to have fewer solutions and stitch them all together.”

For me running a software company, we always want to do more, but I think there's a lot of these challenges that are hard to solve. Whether it's technically the data side and you have certain skill sets of different companies doing different things. And I think your philosophy–I remember when we first spoke–is really identifying those gaps where people are pushing too many buttons. How do we do that? And we see that all the time your people should be focusing on the real problems or the real tasks that do require that skilled employee, that expert who can resolve it, versus if they're spending 90% of their time on those repetitive tasks.

It's not going to result in the best metrics or ultimately outcomes for the patients. And the next question is, you look at, specifically RCM in terms of the KPIs that you're really focused on something besides, I'd say, the standard kind of industry KPIs. Something that we've always had a hard time kind of measuring, or we'd love to find a better way for, is when you implement a technology solution quantifying that staff time savings and efficiency, because we can do proxies, and every software vendor out there does the same thing: “we're saving you five minutes per task, and there's this many per week.”

So we estimate, but it's a little bit of a marketing metric, in my opinion. So that's always something we're trying to do where, for us, you can look at things like collection rate, and days to pay, and kind of hard data points, but the time savings is always hard, because we're not in the office, we don't know, it's so at a high level. I'd love to hear what kinds of KPIs you are focused on. And then, once you implement a solution, how do you figure out if it’s actually working for you or not?

So I agree. In talking to different companies, they summarize the ROI, saying “yes, if you use our solution” versus doing it the status quo way. Honestly, and I'm sure you know this, we don't put a lot of stock in that.

Because the reality is, when we think about these things, it is some of the questions that you mentioned–What is the percentage collected? How smoothly are our claims going out? How quickly are we collecting from patients? And those are the functional metrics. But I actually like to take a step further back and ask “how does this impact the organization–both from our staff and team perspective?”

But also from the patient experience perspective, I think both have somewhat evolved, particularly after COVID. So, when you start on the staff side it is like, “hey, they want to do more meaningful work.”

So if they are stuck doing this thing over and over again, at some point, maybe different people have different thresholds. And at some point, it's going to create turnover for us; they're going to be unhappy. Then they're going to express their unhappiness to other team members in the office, and then it just kind of spreads and grows from there.

And so we think a lot about when we say “DSO” often times people forget the “S”. Their customers are not actually the patient, our customers are the offices in which we support. How do we make their job easier? It's like, all of a sudden, we're gonna take away all your computers and your emails and your cell phones, and now you go do your job. I don't think we really enjoy that and so we want to be able to say, “hey, these things help our team do their job better. It frees up time for them to, let's say, spend more time with a patient that's in the office.”

That kind of face to face time, that's very valuable for us. And so that translates the second piece in terms of what that patient experiences. We don't think about it in terms of, like you said, “oh we save five minutes, but hey, we're able to provide a better experience”, because many of us–guess what–we don't like to answer the phone anymore. And we interact and communicate with people on our time. So there's this kind of idea that asynchronous kind of communication, that's not so much, “oh, let me call the office.” We, the office, calls the patient and they want to talk to you and interact with you and be able to get the information at their fingertips. 

Or, you call. They want the “omni-channel”. Though, we think of it as–”hey, how do we provide the ability to interact with us in more ways?”  So we think of things more in terms of “and's” as opposed to “or's”.

And how do we end up enhancing that patient experience? Because we're giving them just more options to do things. 

Then finally, I would say, it's very difficult to translate some of those KPIs or marketing metrics, because odds are, the vast majority of the cases, we're multitaskers, right? We mean different things. And so if you took away, 5, 10 minutes or an hour out of my day, I'll end up doing something else.

But it's not like that can be recouped. Because people are the heart of our organization, and I don't think of it as–hey, if I'm used to working eight hours, and I'm expected to be paid eight hours, if you chopped off an hour out of my schedule, I wouldn't particularly enjoy that unless I requested it. It’s not a “one way thing”. It's not a “one way” from the staff to, to us, as opposed to us to the staff.

So to summarize, we have our traditional metrics, but we also look more broadly in terms of how we can use technology. How do we use technology and RCM to actually deliver a better experience for both our staff and patients?

I think what you said about meaningful work is so important, because given that hiring is hard, turnover is hard, right? You get your processes. We obviously experienced this too, and leveraging technology and automation empowers your people to do more meaningful work.

Quick anecdote, obviously on our end, we support almost 1500 practices and DSOs across the US, and we had some manual tasks that we were doing in the backend in terms of account creation and onboarding.

Candidly, even though we're an automation company, we went through the same process of hiring someone to build out every individual account. And we said, “let's be smarter about this.” We ended up putting the time and investment into building a whole backend that allows us to bulk create accounts and update and save so much time. It went from that customer success person on our end, from sitting listening to a podcast, mindlessly creating accounts, to actually speaking with our DSO customers and trying to figure out issues to improve the product.

We noticed that it wasn't a time saver, it just moved their time to focus on more meaningful work and ultimately made them a lot happier.

I think it's similar in every industry. The other point I think you made on the patient experience side is so important. Something that we see all the time is, in our view, you talk about dental patients, well, they're just people. And people have the same preferences in terms of how they order their food or go about their business.

I think this is changing a lot, and it's really been led in a good way by some more of the patient engagement type solutions: online appointments, booking communication. We're really trying to bring that to the billing and the payment side. A lot of DSOs we speak with say patients are going to receive this statement, and they can mail us a check to our lockbox.

If you're basically only trying to get paid, let's open up every possible avenue. As an organization let's make sure that you're making it as frictionless as possible for the patient versus forcing them to do something that they don't do.

My son's pediatrician just sends his bill. It always sits on our countertop, not because we don't want to pay it, but because we don't really use checks anymore. But on the other side, some patients want to receive that paper statement. They want to review their details, and they want to mail in a check.

That's fine. It shouldn't be like forcing these different tasks to pay on to the patient. I think you can extend it beyond. It's the same thing with appointment booking or intake forms, etc. I think that's really just so important. Focusing on the patient experience side, we look at how to make it better for the patients and better for the staff. That's where we're really aligned.

Oftentimes I find I get caught up in conversations where people ask, “what’s that silver bullet that is going to solve all our woes?”

The reality is that we’re all people we all have different preferences, and like you said, some might prefer paper statements, some might prefer kind of a textbook.

I love the term that you use: “how do we reduce that friction for somebody to interact with us, whether it's RCM related or not?”

So a lot of times, it's just having a choice. We want to have that choice to be able to do all the various kinds of interactions that a patient would normally have with the practice. And so we think a lot in terms of what are all the communication mechanisms when you are out of the office, and even when you're in the office?

We've been talking about case presentation tools. How do we use those so that the patient better understands what the doctor is saying. This is what you need? You know, we're all guilty of it. You know, I've certainly been to a doctor, a dentist, and I'm nodding like, “yeah, yeah, yeah.”

And then I'll say, "I have no idea why I need that” and then it becomes “how much does that cost?” So we want to be able to transparently communicate and not necessarily push it on to them.

And then also provide them avenues to investigate what that is. So oftentimes, even when you get a paper statement, Oh $100? What's that $100 for?

Now one of the things that we really liked about Pearly is that they're able to log in into a secure environment, and be able to see, “Oh, these are the charges. Okay I understand now.”

For us that particular patient who wanted to call, self helped and found the information his or herself. But you might have another patient that says, “yes, I got this. Yes, I saw this, but I still want somebody to just walk me through this.”

And that's okay. We view the world very much in gray, as opposed to black and white. There's no one right way.

I think that's really a great insight. The silver bullet type conversation does always come up. But running a growing DSO, adding new offices, dealing with patients from every different type of demographic, it's not easy. If you look at almost every other industry, there's typically not this one kind of perfect solution or “silver bullet”, and it's obviously going to change as the organization grows.

That leads me to my next question for you, Phil. I saw,and congrats, that The Smilist just raised a large debt facility to continue to grow. So you guys will likely be adding practices. As you have developed over the past year or two, bringing in RCM technology, leveraging these tools, how do you think about adding a new office?

You add that new practice, obviously, there's always probably going to be a little bit of that short term pain. But with the various solutions you use, how do you look at bringing someone into your current process? I've heard sort of a lot of different ways. Some DSOs are more centralized than others (it varies). How do you think about it, as you're adding new offices at a pretty rapid clip?

What I would say is communication, communication, communication, right? It's setting up the right expectations, we've learned that in many other aspects of our business. A very common conversation we'll have with the seller dentist is–Okay this is what we're going to do: These things are centralized, this is how it's going to work.” And we'd give them a peek behind the curtains, involving them as part of the process.

Certainly in the early days, we had all these great “support functions”–it's just going to work. Don't worry about it. Don't worry about all this other stuff. But we like having these kinds of operational types where we can paint a picture as much as we can to allow them to touch and feel–hey, these are kind of what the screens look like, this is how it works, this is what the communication to your patient looks like.

And so they kind of see that and earlier you mentioned we have a lot of questions, we try to really leverage the collective knowledge. As we continue to grow, there are decades if not centuries worth of dental experience that falls under The Smilist family as we add new locations in.

So, we always want to listen first and not say, “hey, we have so many locations, we're bigger. So thus, we must be better.” We don’t know everything. We approach things in a very kind of humble way. And we say, “you know what we want to buy your practice, because you've you have a successful practice. And so tell us a bit about your journey, and how you accomplish that.” And then from there, we're like, “wow I didn't really think about that. How do we incorporate that into us?”

We're like Toyota, right? We're always continuously learning and continuously improving. And so that is true of  RCM. We’ll say, “okay, this is how RCM works.” They might say, “okay, we don't like this or don't like that, or don't agree with you.”

And then we think how can we adjust or be able to communicate and educate on why this is the right way to do it. So that's where it's really helped us. And we do this prior to closing on the practice.

Just making it very clear to them, “Hey, if you join The Smilist this is exactly how it's going to look like.  And some of your conversation with patients being very transparent about probably every area, but specifically in RCM, this is you know, how we're doing it, how it's going to impact

You ask them so much, right? I mean, a great example, just last night, I was at a dinner, and we've not presented an offer to this group, and it was really kind of making them feel comfortable, or uncomfortable. You know, it's either way. We're just telling you the truth, and either there's a fit, or there's not a fit.

The whole dinner was just like a barrage of questions, and we love that, because that means that you're curious. And look if I go on a date, I want to be able to know that we share similar values, and understand how different things work.

And that's very much what we try to convey in that process from the very beginning. Obviously, over time, the questions get more and more detailed, and once our letter of intent has been signed, then we really go into how it's going to work, in terms of what the timeline is. We're all on the same page.

So when the ink dries on that paper, and the wires get made, we hope that there's no surprises. It’s like “yes, we've been talking about this over and over. And yes, I get it. These are the changes.”

And not just on the surface. We commonly will tell them that we're going to change the practice management system. We're very open about that at the first meeting. In terms of how it all works. And so it's not like, “whoa, you didn't tell me that. I love my practice management system, you can’t change it.”

We all want to have those conversations, and that's where it helps us set up for a successful transition.

It's the old phrase of trying to have expectations meet reality, right, versus when they come in, they know exactly what's going to happen. And I know through working with The Smilist that you have a process. I believe it's within 60 days, and you have a whole list of other solutions and tools you're using. For us, I think that's such a great process because we see it done in a lot of different ways.

For some, it's once the PMS is converted, but it can vary. We've seen for DSOs that the most successful cases are when there just is a process. Maybe it's not the right one, but at least then you can iterate on it over time. 

I think that's something that you've been so strong with. Every software vendor is gonna have different features and settings and capabilities, right? And while we see that DSOs use our software similarly, there's a lot of big tweaks and finding those out is having a more consultative approach.

Recently, we changed some of your settings, so you're able to look at it on your end to see how it works. For us (and for me personally), we love that because we get good feedback. Having that relationship where you’ve brought us some excellent feature ideas, which and different things and some of them we say, “that’s great, I can't believe we haven't thought about that. We need to do it.” and  to some of them we said, “well, we've thought about it, but we can't for this or that reason.” 

That’s a good approach, especially over time, because there's still certainly lots of gaps that software vendors either truly can't solve or haven't been able to figure out. As we move forward, that's where you're going to hopefully see that gap close. Collaboration with growing DSOs, while it certainly is not a new model, has certainly changed the landscape pretty quickly.

The needs of a growing DSO like yours is very different from the individual office, but there's some overlapping skills.

Just to end, and this has been so great. We'd love to hear your experience with Pearly. Any pros and cons or how it's been helpful for The Smilist?

Yes, we've thoroughly enjoyed our experience with Pearly! An we can’t say this about much software we use, but we like the aspect of where it's probably 90% “set and forget.” Very rules driven, and automation driven, and we love that.

I can't tell you how many people we talk to, “oh, you got to upload this file” or “you got to do this, or press this button.” Remember, we're trying to get away from button pressing, and so working with companies like yourselves aligns us philosophically in the sense that we're trying to make things easy for the team.

That's why I love using you guys. You listen to our feedback. We don't always get what we want, nor do we expect to get all we want. But we want it to be a two-way communication.

There have been so many meetings discussing how other people do it. Because here's our problem, we think this is the solution, but you might say, “no, no, no, that's not how that gets solved. We know the problem. But here's a different way.”

You don't say it's a “better way”, but you say, here's a “different way” to approach it. And that to me is so important.There are many companies that are making these point solutions. I would say there's pros and cons to that. The pros are: I love the fact that you guys wake up in the morning, and think about patient A/R. And that's the only thing that you guys think about.

For most it’s, “well what about clinical charts” or “we're gonna do AI” or “we're gonna do this and that.”Those things are all important, and we would love a company that does all of that. But I also see a lot of value in a company that wakes up, singularly focused on a particular solution, that makes sure that it's the best solution available in the marketplace. I think you guys are doing that and have evolved your product over time. I think that's fantastic.

And so in terms of cons, you'll probably hear the same thing from everyone: we just want our stuff faster. But again, in all seriousness, we love the conversations that we have about how to continue to evolve the product. That creates a tremendous amount of stickiness. Because why would we ever change software if it's working really well, and is solving our problems in a “set and forget it” kind of way? I love that.

We really appreciate that. And I think it almost goes back to that silver bullet thing and how we approach waking up, saying, “how can we automate? How can we go from 90% 'set it and forget it' to 92% etc, and solve more of those gaps?”

A big thing for us is how we've built our platform. It's 1,000 different little things. It's not “this type of setting” or “oh, we've noticed you guys using Dentrix enterprise, there's this new type of build type we can leverage or these types of settings to solve a lot of what we do.”

It's solving 1) for the structural nature of the practice management software, but also 2) people aren't perfect. How do we deal with coding issues or people having bad inputs? How do we try to resolve some of those problems? That's a big focus for us going forward, and it’s why it is great to have these conversations.

We were recently talking about an office copay piece. Well, if we can help solve some of that, great. Something we've also been looking at and thinking about for a while, is diving in and using the data where the “easy solution” is the button click solution. Where for everyone coming in, go click a button.

Well, if I called up Phil and said, “Hey, look at this new solution” and you said, “My team is going to need to click hundreds of buttons a day.” If someone approached me about my business like this, we'd say “No way.”

So that's how we think about new features. It's how can we get to that 90% “set it and forget it”, because that's what really drives the value. If we deliver on any problem around RCM, and if we're able to deliver 20%, I don't think it's gonna be a needle mover.

Going back to that ROI conversation, there's just not enough value there. So at least from a product standpoint, there's a lot of stuff that we know we could do, (some of which we're trying to solve), and then some stuff we're still in the weeds figuring it out. 

We take the approach of not releasing a very thin solution across many different areas. Instead, let's really actually solve what we're focused on. That's really our approach.

Well, Phil, thanks so much. We can wrap up here for today's RCM Leadership Webinar Series. Really appreciate your sharing your wisdom with us.

I think other RCM leaders or DSO executives appreciate your thoughtful path and understanding of point solutions. Your focus on your team and offices is really valuable.

We wanted to start this series for our customers, especially an emerging DSO that's significantly smaller, who is saying, “man, what worked when we had 10 offices is now not working at 30.”

If you're a DSO leader you know looking for advice, let’s have these candid conversations and learn from them.

Really appreciate you joining! We've loved working with you and The Smilist team, and if anyone watching wants to learn more about Pearly, head over to our website at Pearly.co to learn more. And Phil, thank you so much again. Really appreciate it.

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