Latest / Orthodontic Products Podcast / Increasing New Adult Patient Starts

Transcript

Increasing New Adult Patient Starts · Orthodontic Products Podcast

• 0:04
  Hello and welcome to the Orthodontic Products podcast.
• 0:07
  I'm your host, Alison Werner.
• 0:08
  In this episode, we're gonna talk about increasing adult patients as share of
• 0:12
  chair.
• 0:12
  And with us to break down this topic is Oliver Gelles, Chief Marketing Officer at
• 0:16
  OrthoFi, the software and service solution that provides patient onboarding and
• 0:20
  includes insurance, patient billing and collection services.
• 0:23
  Oliver has over 20 years of experience in the orthodontic industry and is a frequent
• 0:27
  speaker on patient acquisition.
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  Oliver, thank you for joining me.
• 0:31
  Thanks for having me, Allison.
• 0:32
  Great.
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  So to get started, I know OrthoFi has some great data around adult orthodontic starts
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  and I know there's some misconceptions around trends there.
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  So what are you seeing?
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  Yeah, I've been on the circuit a little bit recently because I think that in the
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  last few years, we've had such a roller coaster ride with COVID and then what
• 0:54
  I call the year of confirmation bias with the 20 plus percent growth year in 2021
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  and then a correction in 2022 and then some economic tightness and softness that
• 1:06
  people experience, especially in the back half of last year, which we're seeing
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  continuing into this year.
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  And so, you know, for, for the audience out there, you know, first of all, the 21
• 1:18
  % growth that, that everyone experienced in, in, you know, in 2021, you know, much
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  of that was fueled by anomalous factors, stimulus, nowhere to spend the stimulus,
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  and then really a surge in adult treatment demand.
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  They surged from what was 25 % of the cases to almost 35 % within our cohort
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  group.
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  And so they represented a disproportionate aspect of that growth.
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  And then of course, when the economy comes back and tightens, that's usually the
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  first place that that happens.
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  That said, the 3.5 % shrinkage in starts last year is not entirely attributable to
• 2:03
  just the economy.
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  I think that that's lazy.
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  And I think that what we've been doing is slicing and dicing the data to understand
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  like more of a root cause.
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  And so what we've seized upon is this.
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  So when you look at the starts, you know, the, the, the child starts actually were
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  flat or increasing the overall, you know, uh, exams were, you know, a little bit
• 2:26
  down, but not as down as the start.
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  So we lost some case acceptance, the adult,
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  demand was a little down, which is pretty indicative of economic tightness.
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  We've seen that in other times like 2008, 2009.
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  So their exams were down 4 % for adults.
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  Adult fixed treatment was also down 4%, which is what you'd want.
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  If the phone rings 4 % less at the time, you would expect a 4 % drop in adult fixed
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  appliance starts.
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  The outlying factor, though, is that adult aligner starts were down almost 11%.
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  And so what accounts for that seven point delta?
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  And there's really only one distinguishing factor between aligner treatment and adult
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  fixed appliance treatment.
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  And I think we can all agree that aligners didn't spontaneously become less popular,
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  less marketed or any of that.
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  So it wasn't the demand for that solution.
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  It was because orthodontists routinely are still requiring the lab fee as a minimum
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  down.
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  And so during a time of economic tightness, the worst thing you can do
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  during that time is to require an adult who, you know, by the numbers for only
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  4 out of 10 have a thousand dollars to put towards treatment to put 1500 down.
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  So you're, we self -inflicted the equivalent of a 2 % impact on start.
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  So if you think about what I said, 3.6 % drop in starts.
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  2 out of that 3.6, so more than half was attributable to that seven-point delta
• 4:03
  with adults.
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  So that's actually self -inflicted.
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  Okay.
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  Okay.
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  So let's talk about who these patients, these adult patients are.
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  In large part, we're talking about Millennials and Gen Z.
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  So if you're going to go after these adult patients and figure out a way to rebound
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  here, what do you need to know about this population and their decision making?
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  So there are a lot brighter folks than I about actually seizing on the behavioral
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  trends of millennials.
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  Tracy Martin in particular has made a career out of really educating the
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  industry of millennials and she's forgotten more about millennial
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  psychographics than I'll ever know.
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  But I do think that it's worthwhile to be a student of that game.
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  What I can add to the picture is this, which is what everyone on the call needs
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  to remember and know is that...
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  The adult target and the adolescent target are very different in these two important
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  ways.
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  Number one is they were not planning on this treatment.
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  The parents of an 11 year old have likely been in OBS or at least seen their kid
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  knowing that their kid has some malocclusion or some crooked teeth or buck
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  teeth.
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  And they've known that they were going to have to be saving for this.
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  So they've been preparing for this expense.
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  And so you can sometimes get a higher down from a family that's been saving for
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  adults.
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  Many of them make the decision very spontaneously.
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  It's far more whimsical.
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  You know, they have a life event, they get divorced, they have a wedding they're
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  going to be going to or be in.
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  They are their friend just got aligners or got them off and they're motivated in that
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  moment.
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  So they don't have a bunch of saved up and.
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  All the Fred savings date data shows that people had lots of savings and lots of
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  cash back in 2021, but it not only has snapped back, it's actually snapped back
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  lower than before.
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  So people have even less sitting in their bank accounts ready to write a check on.
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  So that's one of the reasons why of all your targets, you can't ask an adult for a
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  high down.
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  That's just not a great idea.
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  So that's one important thing.
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  And then the other thing is,
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  They've been living with this malocclusion for likely 10 to 15 to 20 years.
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  And so they can live another year with it.
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  So we got to be really great at getting that same day contract from them while
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  their attention is in this place right now before they get distracted with other
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  expenses and other things.
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  And so if you don't get an adult to same day start, you're probably not going to
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  get them for a while.
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  but you need to be patient and stay with them using automated pending technologies
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  like OrthoFi has, but there are other technologies that do this and stay with
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  them so that when the thought comes back up, you are just in time, you're in their
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  inbox and ready to remind them that they deserve this treatment and that it's a
• 7:13
  great time to get a great smile.
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  Well, and another reason that targeting this adult population and getting them to
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  that decision is because adults are going to make up a larger portion of cases going
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  forward based on the demographics, right?
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  Yeah, I mean, this is another thing that a lot of orthodontists are either sleeping
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  on or bearing their heads about.
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  So we are in one of the greatest specialties and industries in the world
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  for many reasons.
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  But one of the reasons is that we're very lucky is that we have birth rate data,
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  which essentially is the equivalent of total addressable market data that tells
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  us how many targets are we going to have.
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  for the largest part of our market, right?
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  So we know how many 11 year olds there are gonna be because we have the birth rate
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  from 11 years ago.
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  And so what's super interesting is the birth rate actually peaked in 2010 and it
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  has been declining ever since.
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  So it makes sense that in 2021, we had a nice number of kids.
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  The bad news is, is that by the data, not only are there gonna be less kids this
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  year to treat,
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  they're going to be less kids for the next 10 years to treat.
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  So if you want to grow your practice, it's not going to be by treating more kids
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  unless you're going to be stealing them from your neighbors and getting a market
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  share play.
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  You're going to need to treat more adults if you want to increase your total volume
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  of starts.
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  Okay, so with all that in mind, what are the best strategies for winning these
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  patients over and building a long -term relationship?
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  And you talked a little bit there about dealing with their financial situation.
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  So what else should doctors know?
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  So from a conversion workflow, I think one of the most important things in general,
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  but especially for adults.
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  So it's almost like all these things are important to convert kids, but acutely
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  important for adults.
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  Right.
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  The first thing is really lean into the pre -suasion aspect.
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  Right.
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  The job to convert the patient does not begin when they walk through your door.
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  The job begins from the first call.
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  how you establish rapport, how you establish reciprocity with that patient,
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  make them feel like a patient even before they walk in.
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  We have lots of data connecting their engagement with intake forms, which is why
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  we have mobile friendly intake forms, using technology, making them feel like
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  they are part of the practice, high impact appointment reminder calls with video
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  texts, like investing time and energy in the...
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  persuasion so that they're already pretty warm when they come in and then having a
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  great playbook to do same -day conversion.
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  So a lot of practices have leaned into same -day starts.
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  If you have not, now is the time because this target needs to be converted that
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  way.
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  And then of course have great technology that follows them immediately after and
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  doesn't let a lot of dust settle.
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  you know, on that opportunity of a very short window after the exam, but then in
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  the middle have to have flexible terms.
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  You can have a nice fee.
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  If you're doing the best technology in your neighborhood, I say this all the
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  time.
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  I want you to have the highest fee.
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  I also want you to be the most affordable.
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  And the only way to have both of those be true is by being flexible in our form of
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  flexibility.
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  We feel is the best.
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  And that is the open choice concept.
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  where the adult patient designs their payment plan based on what they can do.
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  And what that ends up doing is it blends growth and cash flow and risk.
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  And that's the ultimate formula that we see.
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  Okay.
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  Now you mentioned, you know, the fact that a lot of orthodontic practices have
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  aligner patients pay that lab fee upfront.
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  And I know that OrthoFi recently entered into an agreement with Align Technology
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  that will allow OrthoFi clients to spread those Align lab fees over 10
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  months.
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  Can you talk a little bit more about what that means in practice and how practices
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  can kind of implement that?
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  Absolutely.
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  Now I will say like OrthoFi already did a pretty decent job of helping them to
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  balance that anyway, because we have carrot and stick incentives for patients
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  to put higher downs that then create a blended balance cashflow that's really
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  healthy.
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  So we already were doing a pretty good job of solving for this, but it always did
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  feel like, trust me, it'll happen.
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  It'll work itself out.
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  And some did and they, and they've,
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  profited and thrive from that and some, you know, have hesitated even within our
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  own customer group.
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  Some, you know, lean into the system and some not.
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  But now I'm excited because we actually have a real solution where I can tell you
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  that your cashflow is going to be fine because if you are a qualifying practice,
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  meaning that you're in good standing with Align, it's, you know, it is only to sole
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  proprietor practices.
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  So DSOs likely have a different, you know, different arrangement.
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  But if you're in a sole proprietor practice and you're in good standing with
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  Invisalign, you will likely qualify for what's called the FPT -10 program, which
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  like you said, Alison, very simply is imagine that if you click your clin check
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  and approve it, you will get the first of 10 invoices over the next 10 months that
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  through ACH, and it does have to be ACH, but there's a huge ROI for that.
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  that you will automatically be on a 10 month installment program.
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  So what we've seen by running all the modeling numbers is that the average
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  practice would see, even if they didn't increase their volume of Invisalign at all,
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  they would see roughly a $45 ,000 cashflow benefit over the first 12 months, which is
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  the equivalent of getting a zero interest small business loan.
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  And so,
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  That's pretty nice as a benefit.
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  But I am also telling everybody, don't use it to go buy a boat, right?
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  That cash is, I want you to reinvest it in the business.
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  And if you have designs to increase your mix of aligners in your practice, and you,
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  let's say, want to go from 20 % mix to roughly 40 % mix, this is the vehicle to
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  get there.
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  And if you do that, that $45 ,000 is actually more like over $70 ,000.
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  that you would have as an advantage versus just trying to climb up the ladder
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  yourself.
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  Now for anyone who's interested, I know that you're going to be going deeper into
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  this topic, or our topic, which was adult starts.
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  And you'll be leading a mini masterclass as part of the AEO's Lunch and Learn
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  program in the exhibit hall with consultant Tracy Martin, who you mentioned
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  is really enmeshed in the Gen Z millennial behavior.
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  So if you really want to dive in deeper on that, go check this out on Saturday, May
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  4th at 1150 a .m.
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  in the exhibit hall.
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  What else should potential attendees know about this session?
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  Yeah, we're going at this as hard as it can possibly go.
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  And for any of you on that has heard Tracy's content in particular, it will
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  make you uncomfortable.
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  It is definitely cutting edge stuff.
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  There are a lot of, you know, staid notions in our industry that she's going
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  to challenge hard.
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  And, you know, for me to be saying that being I usually am that role.
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  is saying something, but it will be very, you will not want to miss it.
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  You will hear stuff that you are not hearing in other halls.
• 15:17
  Yeah.
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  Oh, great.
• 15:19
  Well, Oliver, thank you so much for taking the time to speak to me.
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  I know we're going to have you back again soon to talk on other topics, but I really
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  appreciate you kind of delving into this.
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  And I hope everybody goes and checks you out at the AO and maybe gets a little
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  scared, but it's for a good it's for a good reason.
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  All right.
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  Thank you.
• 15:38
  Great.
• 15:39
  Thanks.