Bracing for Change
Dr. Alex Giannini hasn’t practiced dentistry in over a decade. From his early days in the tooth trade, he’s been an operator first, and a doctor second. That was exactly the sacrifice Alex didn’t want the practitioners at Blackford Dental Management to have to make when he took over as CEO.
Alex was first brought on to the three-year old dental services organization (DSO) in the fall of 2014 in a consulting capacity to help patch the holes that were losing the company over half a million dollars a month. By January 2015 Blackford was break-even, and by March they were making money for the first time.
The investors in the business took another look at the company and saw tremendous growth opportunity with Alex at the helm. “It’s been quite a turnaround,” Alex says. “Same store sales have increased over 75% and EBITDA growth has been astronomically high.”
An Early Operator
Alex partnered with dental school classmates upon graduation. “So right away we were our own little group,” he says. In a crowded market, Alex reflects, there wasn’t enough work to keep dentists busy. He started spending less time with a scalpel and more time on the marketing plan and operations. “I made as much money working on my business than in my business,” Alex says.
Alex’s early years as an operator led him to lengthy stint as an executive of Heartland Dental Care, which today is the largest DSO in the country with over 700 offices. Taking an early retirement at the age of 42, Alex pivoted and went into business with his father, a real estate developer. “I probably made the biggest mistake of my life switching careers,” Alex admits.
By 2008, Alex was back in the chair, with a new venture called Dynamic Dental Partners.”We grew through the recession with double digit growth,” Alex says. In 2014, the company landed a coveted spot on the Inc. 500 at number 14. They brought in private equity investors and Alex eventually exited the successfully growing business.
“When I got to Blackford there were 21 offices and 19 different partners,” says Alex. “They were all solo dentists. They didn’t really know how to behave or communicate as a group.” Alex’s first order was to install systems and structural policies that would give the doctors more freedom to focus on their practice. “I pulled everybody together and had them review and adopt some clinical policies about standards of care.” His vision was doctor-led and patient-centered; it didn’t take much to get the dentists on board.
“I really believe that the dentists have to lead and be the visionaries for their own practice and the market they operate in,” says Alex. Blackford operates in a virtual partnership structure with many of the individual practices it owns. Alex’s goal is to provide the very best technology, equipment, and training the doctors need to run successful offices. “Blackford is purely a business partner,” says Alex. “We’re there to support the dentists by providing back-office support, marketing, compliance, IT, and procurement.” Doctors can spend more time taking care of the patient — creating a happy, recurring customer base and a predictable flow of revenue and referrals.
According to Alex, dentistry has undergone a complete metamorphosis in the last decade. “In the early 2000s, 3% of all dentists were in a group practice and today it’s estimated to be almost 15-18%,” says Alex. The industry predicts that by 2030 the market will be split evenly between the DSO model and the independent practice.
“There are a lot of models to build great DSO groups,” says Alex. To go to the next level, however, Alex points to the need for capital infusion and operational experience. Blackford is actively sourcing acquisition targets across the country and expects this to be their primary source of growth.
“We have a unique model,” says Alex. “The folks that join us are doctor-leaders and I do not allow them to relinquish their leadership duties.” Blackford looks for dentists who want to spend more time with patients and less on the administration of running a practice. At the same time, they value an entrepreneurial mentality. “That’s an absolute deal breaker for me,” says Alex.