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Introducing the "Orthodontic Products Podcast", a journey into the dynamic realm of orthodontic innovations. Each episode dives into fresh research, transformative technologies, and the methodologies redefining the field. Expert interviews seamlessly blend with in-depth analyses, offering listeners a comprehensive look into the ever-evolving world of orthodontics. This isn't just a podcast—it's a portal to the future of orthodontic practices and breakthroughs.
Hello and welcome to the Orthodontic
Products podcast.
I'm your host, Alison Werner.
In this episode, we're gonna talk about
increasing adult patients as share of
chair.
And with us to break down this topic is
Oliver Gelles, Chief Marketing Officer at
OrthoFi, the software and service solution
that provides patient onboarding and
includes insurance, patient billing and
collection services.
Oliver has over 20 years of experience in
the orthodontic industry and is a frequent
speaker on patient acquisition.
Oliver, thank you for joining me.
Thanks for having me, Allison.
Great.
So to get started, I know OrthoFi has some
great data around adult orthodontic starts
and I know there's some misconceptions
around trends there.
So what are you seeing?
Yeah, I've been on the circuit a little
bit recently because I think that in the
last few years, we've had such a roller
coaster ride with COVID and then what
I call the year of confirmation bias with
the 20 plus percent growth year in 2021
and then a correction in 2022 and then
some economic tightness and softness that
people experience, especially in the back
half of last year, which we're seeing
continuing into this year.
And so, you know, for, for the audience
out there, you know, first of all, the 21
% growth that, that everyone experienced
in, in, you know, in 2021, you know, much
of that was fueled by anomalous factors,
stimulus, nowhere to spend the stimulus,
and then really a surge in adult treatment
demand.
They surged from what was 25 % of the
cases to almost 35 % within our cohort
group.
And so they represented a disproportionate
aspect of that growth.
And then of course, when the economy comes
back and tightens, that's usually the
first place that that happens.
That said, the 3.5 % shrinkage in starts
last year is not entirely attributable to
just the economy.
I think that that's lazy.
And I think that what we've been doing is
slicing and dicing the data to understand
like more of a root cause.
And so what we've seized upon is this.
So when you look at the starts, you know,
the, the, the child starts actually were
flat or increasing the overall, you know,
uh, exams were, you know, a little bit
down, but not as down as the start.
So we lost some case acceptance, the
adult,
demand was a little down, which is pretty
indicative of economic tightness.
We've seen that in other times like 2008,
2009.
So their exams were down 4 % for adults.
Adult fixed treatment was also down 4%,
which is what you'd want.
If the phone rings 4 % less at the time,
you would expect a 4 % drop in adult fixed
appliance starts.
The outlying factor, though, is that adult
aligner starts were down almost 11%.
And so what accounts for that seven point
delta?
And there's really only one distinguishing
factor between aligner treatment and adult
fixed appliance treatment.
And I think we can all agree that aligners
didn't spontaneously become less popular,
less marketed or any of that.
So it wasn't the demand for that solution.
It was because orthodontists routinely are
still requiring the lab fee as a minimum
down.
And so during a time of economic
tightness, the worst thing you can do
during that time is to require an adult
who, you know, by the numbers for only
4 out of 10 have a thousand dollars to
put towards treatment to put 1500 down.
So you're, we self -inflicted the
equivalent of a 2 % impact on start.
So if you think about what I said, 3.6 %
drop in starts.
2 out of that 3.6, so more than half
was attributable to that seven-point delta
with adults.
So that's actually self -inflicted.
Okay.
Okay.
So let's talk about who these patients,
these adult patients are.
In large part, we're talking about
Millennials and Gen Z.
So if you're going to go after these adult
patients and figure out a way to rebound
here, what do you need to know about this
population and their decision making?
So there are a lot brighter folks than I
about actually seizing on the behavioral
trends of millennials.
Tracy Martin in particular has made a
career out of really educating the
industry of millennials and she's
forgotten more about millennial
psychographics than I'll ever know.
But I do think that it's worthwhile to be
a student of that game.
What I can add to the picture is this,
which is what everyone on the call needs
to remember and know is that...
The adult target and the adolescent target
are very different in these two important
ways.
Number one is they were not planning on
this treatment.
The parents of an 11 year old have likely
been in OBS or at least seen their kid
knowing that their kid has some
malocclusion or some crooked teeth or buck
teeth.
And they've known that they were going to
have to be saving for this.
So they've been preparing for this
expense.
And so you can sometimes get a higher down
from a family that's been saving for
adults.
Many of them make the decision very
spontaneously.
It's far more whimsical.
You know, they have a life event, they get
divorced, they have a wedding they're
going to be going to or be in.
They are their friend just got aligners or
got them off and they're motivated in that
moment.
So they don't have a bunch of saved up
and.
All the Fred savings date data shows that
people had lots of savings and lots of
cash back in 2021, but it not only has
snapped back, it's actually snapped back
lower than before.
So people have even less sitting in their
bank accounts ready to write a check on.
So that's one of the reasons why of all
your targets, you can't ask an adult for a
high down.
That's just not a great idea.
So that's one important thing.
And then the other thing is,
They've been living with this malocclusion
for likely 10 to 15 to 20 years.
And so they can live another year with it.
So we got to be really great at getting
that same day contract from them while
their attention is in this place right now
before they get distracted with other
expenses and other things.
And so if you don't get an adult to same
day start, you're probably not going to
get them for a while.
but you need to be patient and stay with
them using automated pending technologies
like OrthoFi has, but there are other
technologies that do this and stay with
them so that when the thought comes back
up, you are just in time, you're in their
inbox and ready to remind them that they
deserve this treatment and that it's a
great time to get a great smile.
Well, and another reason that targeting
this adult population and getting them to
that decision is because adults are going
to make up a larger portion of cases going
forward based on the demographics, right?
Yeah, I mean, this is another thing that a
lot of orthodontists are either sleeping
on or bearing their heads about.
So we are in one of the greatest
specialties and industries in the world
for many reasons.
But one of the reasons is that we're very
lucky is that we have birth rate data,
which essentially is the equivalent of
total addressable market data that tells
us how many targets are we going to have.
for the largest part of our market, right?
So we know how many 11 year olds there are
gonna be because we have the birth rate
from 11 years ago.
And so what's super interesting is the
birth rate actually peaked in 2010 and it
has been declining ever since.
So it makes sense that in 2021, we had a
nice number of kids.
The bad news is, is that by the data, not
only are there gonna be less kids this
year to treat,
they're going to be less kids for the next
10 years to treat.
So if you want to grow your practice, it's
not going to be by treating more kids
unless you're going to be stealing them
from your neighbors and getting a market
share play.
You're going to need to treat more adults
if you want to increase your total volume
of starts.
Okay, so with all that in mind, what are
the best strategies for winning these
patients over and building a long -term
relationship?
And you talked a little bit there about
dealing with their financial situation.
So what else should doctors know?
So from a conversion workflow, I think one
of the most important things in general,
but especially for adults.
So it's almost like all these things are
important to convert kids, but acutely
important for adults.
Right.
The first thing is really lean into the
pre -suasion aspect.
Right.
The job to convert the patient does not
begin when they walk through your door.
The job begins from the first call.
how you establish rapport, how you
establish reciprocity with that patient,
make them feel like a patient even before
they walk in.
We have lots of data connecting their
engagement with intake forms, which is why
we have mobile friendly intake forms,
using technology, making them feel like
they are part of the practice, high impact
appointment reminder calls with video
texts, like investing time and energy in
the...
persuasion so that they're already pretty
warm when they come in and then having a
great playbook to do same -day conversion.
So a lot of practices have leaned into
same -day starts.
If you have not, now is the time because
this target needs to be converted that
way.
And then of course have great technology
that follows them immediately after and
doesn't let a lot of dust settle.
you know, on that opportunity of a very
short window after the exam, but then in
the middle have to have flexible terms.
You can have a nice fee.
If you're doing the best technology in
your neighborhood, I say this all the
time.
I want you to have the highest fee.
I also want you to be the most affordable.
And the only way to have both of those be
true is by being flexible in our form of
flexibility.
We feel is the best.
And that is the open choice concept.
where the adult patient designs their
payment plan based on what they can do.
And what that ends up doing is it blends
growth and cash flow and risk.
And that's the ultimate formula that we
see.
Okay.
Now you mentioned, you know, the fact that
a lot of orthodontic practices have
aligner patients pay that lab fee upfront.
And I know that OrthoFi recently entered
into an agreement with Align Technology
that will allow OrthoFi clients to
spread those Align lab fees over 10
months.
Can you talk a little bit more about what
that means in practice and how practices
can kind of implement that?
Absolutely.
Now I will say like OrthoFi already did a
pretty decent job of helping them to
balance that anyway, because we have
carrot and stick incentives for patients
to put higher downs that then create a
blended balance cashflow that's really
healthy.
So we already were doing a pretty good job
of solving for this, but it always did
feel like, trust me, it'll happen.
It'll work itself out.
And some did and they, and they've,
profited and thrive from that and some,
you know, have hesitated even within our
own customer group.
Some, you know, lean into the system and
some not.
But now I'm excited because we actually
have a real solution where I can tell you
that your cashflow is going to be fine
because if you are a qualifying practice,
meaning that you're in good standing with
Align, it's, you know, it is only to sole
proprietor practices.
So DSOs likely have a different, you know,
different arrangement.
But if you're in a sole proprietor
practice and you're in good standing with
Invisalign, you will likely qualify for
what's called the FPT -10 program, which
like you said, Alison, very simply is
imagine that if you click your clin check
and approve it, you will get the first of
10 invoices over the next 10 months that
through ACH, and it does have to be ACH,
but there's a huge ROI for that.
that you will automatically be on a 10
month installment program.
So what we've seen by running all the
modeling numbers is that the average
practice would see, even if they didn't
increase their volume of Invisalign at all,
they would see roughly a $45 ,000 cashflow
benefit over the first 12 months, which is
the equivalent of getting a zero interest
small business loan.
And so,
That's pretty nice as a benefit.
But I am also telling everybody, don't use
it to go buy a boat, right?
That cash is, I want you to reinvest it in
the business.
And if you have designs to increase your
mix of aligners in your practice, and you,
let's say, want to go from 20 % mix to
roughly 40 % mix, this is the vehicle to
get there.
And if you do that, that $45 ,000 is
actually more like over $70 ,000.
that you would have as an advantage versus
just trying to climb up the ladder
yourself.
Now for anyone who's interested, I know
that you're going to be going deeper into
this topic, or our topic, which was adult
starts.
And you'll be leading a mini masterclass
as part of the AEO's Lunch and Learn
program in the exhibit hall with
consultant Tracy Martin, who you mentioned
is really enmeshed in the Gen Z millennial
behavior.
So if you really want to dive in deeper on
that, go check this out on Saturday, May
4th at 1150 a .m.
in the exhibit hall.
What else should potential attendees know
about this session?
Yeah, we're going at this as hard as it
can possibly go.
And for any of you on that has heard
Tracy's content in particular, it will
make you uncomfortable.
It is definitely cutting edge stuff.
There are a lot of, you know, staid
notions in our industry that she's going
to challenge hard.
And, you know, for me to be saying that
being I usually am that role.
is saying something, but it will be very,
you will not want to miss it.
You will hear stuff that you are not
hearing in other halls.
Yeah.
Oh, great.
Well, Oliver, thank you so much for taking
the time to speak to me.
I know we're going to have you back again
soon to talk on other topics, but I really
appreciate you kind of delving into this.
And I hope everybody goes and checks you
out at the AO and maybe gets a little
scared, but it's for a good it's for a
good reason.
All right.
Thank you.
Great.
Thanks.