Oral surgery-focused management services organization U.S. Oral Surgery Management has made several accomplishments this year to expand its partner practice network and establish itself as a leading dental group.
The organization has added several practices so far this year, made new leadership appointments and achieved a leading net promoter score among its 53 partner practices.
The company supports practices in 19 states. It plans to bring on an additional 25 to 30 practices this year, according to President and CEO Rick Hall.
Mr. Hall spoke with Becker's about the company's recent growth, its plans for the rest of the year and how it's staying on top of the competition.
Editor's note: Responses were lightly edited for clarity and length.
Question: How would you describe USOSM's growth so far this year?
Rick Hall: We're seeing significant momentum in the practice partnership pipeline. It's probably the strongest pipeline we've seen since our inception. So the pipeline is very strong, and organic growth is extremely strong as well. We're actually having a record year as it pertains to both organic growth and partnership activities. So really strong on both fronts on a year-to-date basis.
In addition, we went through a successful recap event in November of last year. Oak Hill Capital is now our new private equity sponsor, and we developed a budget with them as they consummated the partnership with us. And we're exceeding that operating plan as we speak. It's just been a really strong year so far.
Q: What challenges has your company had to overcome during its growth journey?
RH: As you stand up these platforms, we started — as many do — from scratch with nothing, and then we grew very rapidly. So operational execution is absolutely critical, and in our first four years of development, we've invested over $70 million in infrastructure, people, processes and systems to support our surgeon partners and our practices, and I personally believe that is critically important for any service organization to build the infrastructure and the capability to provide the support [on] day one. You can't present a value proposition and then say, "Well, we're working on that" or "We're gonna get to that." When they come on board as a partner, they expect us to be able to deliver that value proposition the day after the transaction closes. So far that's what we've been able to do now. That's not easy. Operational execution is probably the biggest risk in these models, and we're fortunate that we were able to navigate through that. So we clearly see ourselves as beyond the high risk phase now that is typically associated with the startup phase of companies.
Q: What are USOSM's goals for this year?
RH: We're going to continue to build density in the markets that we're already in and continue to expand geographically in new states as well. The states we're in today span coast to coast, so we see ourselves today as a national company, and we want to expand on that.
Surgeon recruiting is a key area of focus for us. It'll always be essential to continue to attract the best and brightest surgeons to our partner practices. So surgeon recruiting is a key strategy for us, and just continuing to make sure that we execute in a way that continues to maintain and/or strengthen that net promoter score, because we're really proud of that.
The labor market right now is probably the most challenging that I've seen over my career. I'm 40 years into my professional career right now. I've never seen a labor market like this. So we're doing some creative things on the incentive side [and] investing more resources into the recruitment effort for staff and for surgeons. As an example, just recently we put in place a gas incentive for the staff that have to travel to multiple practice locations given the price of the pump that they're all experiencing; that was pretty painful for them. We are doing extensive wage and comp surveys by market to ensure that we remain competitive from a cash compensation perspective. And then we're also reevaluating all of our employee benefits to ensure that we have just a really strong benefit package that we can offer employees of the organization.
Q: What does your team look for in a practice, and what advice do you give potential partner practices when deciding whether to join your network?
RH: There's a couple of things actually. One is we established very early on a criteria that we will only partner with board-certified oral surgeons. So they have to be board certified. Two is that we look for practices that have been stable and want to accelerate their growth going forward, practices that have great clinical reputations in their communities and great patient experiences. We're currently running in our partnered practices a net promoter score of 82, which is world class, and we obviously look for practices that share that vision and that objective. We always look for practices that have surgeons that are active in the specialty, such as serving with the [American Association of Oral and Maxillofacial Surgeons] committees or as AAOMS delegates or officers. We think having specialty leaders within our partnership is really important as well.
We understand and have a lot of sensitivity to the fact that this is an emotional and key strategic decision for these practices. They've built these practices as entrepreneurial surgeons historically, and now they're bringing in a business partner that will require them to collaborate, and we ask them to be very thoughtful about it [and] very committed to the success of it. The one thing that is unique about our model, although others are doing it now but we started it in oral surgery, and that is that it's a true equity partnership model. So 48 percent of U.S. Oral Surgery is owned by our surgeon partners. So that's a really important ingredient to how we align on what we're going to do together as partners. They have primary responsibility for the clinical delivery. We have primary responsibility for all the business functions in support of them and their practices. But as we all know in healthcare, there are areas that impact both simultaneously. And that requires collaboration from both the clinical team and the business team.