138: Comparing Dental with Other Healthcare with CFO, Julie Serewicz

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When I was working as an associate right out of school, I never imagined I could own these many practices with this amount of support. So thank you.

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You have this natural talent, this unique ability. Happy day to you and welcome to another episode of DSO Secrets. I am Ken Kaufman, your host today and thrilled to introduce to all of you our guest, the CFO at Hero Practice Services, Julie Sarewitz. Jerry. Julie, thanks so much for joining the show today.

Thanks so much for having me, Ken. I appreciate it.

Yeah. Well, I am really looking forward to diving into some of the topics that we have talked about. Before we get into it. If you will take a minute and introduce yourself, share some of your background and, and one of the reasons why we're excited you're here is because you're new to dentistry but not new to health care. And we're going to pick your brain on some of the differences and similarities and learn, learn from you today. So if you take a minute and give the listeners bio of yourself.

Yeah, of course. I have been in PE backed multi state, multi site healthcare for about 14 years. I spent the first 10 years in the intellectual and disability space which is not as much provider focused as it is providing settings with wraparound services to those folks so they can live as independently as possible. So I enjoyed that very much. That was primarily Medicaid supported. About 99% of the reimbursement was Medicaid. So something that you had to run pretty tightly. I'd be good at what you did. You had to provide a quality service so you could compete in that space.

Yeah. And run a really tight compliance ship as well. Right. Always had to make sure things were just dialed up and everything was accurate.

Absolutely. Then I spent about a year in dermatology and similarly that was just an early roll up of practices. Two PE sponsors had got together and wanted to roll those up. And then I spent the last three years before I joined Hero in allergy and sinus at a spire. Allergy and sinus. So in those last two situations I was going into situations where they had just recently been partnered with pe. A lot of cash to Accrual accounting and setting up the financial infrastructure to help manage those businesses. So something I really enjoy kind of having the blank slate and being able to architect out what's needed to drive the business. So it was very challenging, very fun. And then I had the opportunity at hero, where again, I really enjoyed my time in the IDD space and I had that Medicaid background. I've loved all of my opportunities in my career, but it's really nice to have the opportunity to provide services to underserved populations and provide a service that the folks absolutely need. So I neglected to mention that HERO focuses mostly on underserved pediatric populations for dental, vision and Ortho. So. So that is how I ended up here.

That's fantastic. And I think it was right about the beginning of November that you started. Is that right?

November 1st? Yes.

So you're an industry veteran of 1/4?

Yes, yes. So brand new. All of the specialties I oversee now.

That's awesome. No. Well, excited to talk about some of the similarities and differences between some of these healthcare verticals. I think we'll be able to unpack a few things. And then right now I know that HERO is in multiple states, so could you mention like how many states and then how many practices generally you guys are supporting at this point?

We're in seven states. We have about 36 dental practices, 22 vision, and then I think it's about 17 ortho. I don't remember exactly. I'm still fairly new.

And then you got a little bit of a mobile initiative as well.

Yes, we also do a rural vision program where we go out to a population. Right now we do it in New Mexico, we're about to launch in Colorado, but we partner with schools and organizations that also serve under the underserved population. And it's typically kids that just, they don't have glasses or they're wearing their grandparents glasses. So I mean for children to be able to learn in school, that's obviously something that's going to be pretty key for them to be able to see. So it's very rewarding for us to be able to do that. And that has. We started kind of slow last year and we've gained momentum where we don't really even have to reach out anymore to schedule those days. We're getting reached out to by schools and programs so that we can provide that service. And it's pretty exciting.

That's awesome. Yeah. That's one thing that's just so amazing about being in the dental industry is the ability to impact so many lives, tens of thousands, hundreds of thousands a year depending on the size of an organization or more than that even. And just, you know, just have huge impact on communities. It's, it's very rewarding that way.

Yeah.

So coming from some physician based organizations like an allergy and derm, and then you get dropped into dental. Tell us what, what was sort of the most shocking thing that you saw relative to how the business was run in these other healthcare verticals versus to what's happening in dental.

So I think, you know, what's interesting is that, you know, RCM is always a challenge and I always say it's like the ocean, you can't turn your back on it. Something you have to really have your hands in as the cfo. And dental is kind of a new realm of denials for different reasons, you know, frequency and, and things of that nature. And just really since I don't know dental very well, I'm learning that from the ground up. Just coming across certain issues where, you know, sealants or things in certain states may not be covered at a certain level or frequency, but we do it anyway because it's needed. And just kind of understanding that and understanding what the goal on the collection rate truly should be, knowing that we're going to provide those services and figuring out the balance of, you know, billing for everything you can. Obviously we want to get paid for everything we can, but, but figuring out what our goal is, knowing that we're going to provide those services.

One of the adjustments was a vast difference between allergy and derm and, and the insurance denials and frequency rules and different things like that. From a payer standpoint.

Yeah, I would say it's much more vast and there's more interest intricacies in dental than I've seen in other other specialties.

Okay, that's, that's really interesting to know. Sorry. And you were going to talk about another one too, I think.

No, I was just saying usually or in my, you know, my last few gigs it's been easier to consolidate practices within a single practice in a state and we don't do that. So it's, we have a pretty intricate practice structure and just exploring the possibilities of simplifying that, realizing it's probably not for us, given us that we're such a highly funded Medicaid provider. But, you know, that was a bit of a shock to me that it was a bit more of an intricate structure. It works, it works, you know, medical in general with corporate practice medicine is something you always have to navigate a bit different.

But it's just fascinating when you help support a dentist open one practice and that can sometimes result in two or even three entities needing to be created.

Yes, that.

Then when you proliferate that over and over, it creates a ton of complexity from a consolidation standpoint. And it might be fair to just talk about this for a minute because I don't think our listeners really truly understand the complexity when I, when I say, hey, right now our consolidation includes over 100 entities. They do not understand the complexity, the challenges, the intercompany, the eliminating entries and everything that it takes to put in front of you. Hey, here's this nice summarized view of everything that's going on and there's a whole bunch of noise in the background. Do you want to maybe comment on that? And some of the challenges you find with that?

I mean, a lot of it comes down to the software that you use. We use great planes and you can get creative on how to. Despite the fact that you've got multiple entities, you're creating a P and L per practice. It takes a little bit of magic in the background. We are. I have used intact Sage a lot the last few years. So we are going to move over to that. It's cloud based. Yeah, you have a lot of.

That's what we're on. We made the switch right after Covid hit. We moved from Great Plains to Sage intact and we've been very pleased.

Yeah, I just find it very functional. It's great for doing this sort of thing where you have to have multiple entities and you want to show information from the two different entities that you need to pour into one practice to show truly the profitability of a P and L. That's really helpful. It's also cloud based. It integrates with so many other things as well. So when you're trying to pull your metrics together and things like that, or you're able. The ease of pushing intact data into other systems as well is. Is really helpful.

Yeah, great, great points. Now, coming over to dentistry, you've noticed that all of the practice management software systems, or EHRs, they're all totally compliant, easy to use. They talk back and forth to each other and it's snap of a finger. You can just pull whatever metrics out you want. Right.

You know it. That's not true in any specialty though. I always say that everyone hates their EHR in their own special way. Not because they're bad, it's just the need. I think the needs change so much over time. Since we have, we have such an intricate structure with multiple practices and we have three different specialties. We have a lot of disparate data and it's. I always say you can get. To date, you can, no matter how hard the data is to get to, you can get to it and you can pull out actionable information. But when you're talking about an organization that's this big like that could take you days to do when you need the answer three days ago. So we've invested in building an electronic data warehouse to be able to pull all that data together. We're making progress and we can start to see the light and it's certainly worth it, but it's certainly taken a lot of time and diligence and certainly project management with all the key stakeholders to make sure everybody gets what they need to drive the business. So it's exciting and fruitful, but got to put the work in.

That's right. I was on the dental finance forum call last month or last night. I'm sorry. And for those who don't know about it, we've got a little group of finance leaders that get together that are in the dental space. Julie's a part of it too. We missed you last night, obviously, Julie, but one of the finance leaders showed up asking, how come in my ehr, when I run one report, it tells me one answer and. And then when I run a different report, it gives a conflicting answer and how do I end up ultimately reconciling my way through all of this? And it's just you ultimately have to understand the database structure. You have to understand the columns, you have to understand which ones you want to pull and what your definition of each metric is going to be. For example, what is your definition of patient visit? It may seem very simple conceptually, but to actually get the consistent information from the right place, the right data, the right database within the overall EHR system, it's a lot of hard work because you literally have to go to the base and start defining what is a patient visit, what is not a patient visit, and so on and so forth.

Yes, yes, that's exactly true. And it's. I typically take it from a few different angles and run some reports together and try to figure it out. And even then, I mean, you're dependent on the data that's input by a human being. And we all, we all have errors, we all make mistakes. I would say, I think as long as you can get reasonably comfortable with the data, I mean, I mean, pretty comfortable. I'm not Saying like that loosely. But I by nature tend to be kind of a perfectionist and over my career, beating my head against the wall several times have learned that perfection to the level that I was used to is not. I'm not going to have perfect data, but having data that you can rely upon, at least enough to run the business and understand that there may be some errors in there, your life gets a little easier.

Yeah, that's exactly right. And you were telling me that you guys have had a situation where you've been working off of some disparate systems and you're starting to try to consolidate down to one system. Maybe if you share some of your war stories there and some of the successes you've had as you've, as you've started to embark on that.

Well, we haven't consolidated yet. We launched ECL Eclinical Works and we have transitioned all of our dental onto that system. And that I'm sure anybody who's done an EHR implementation or changeover knows how painful that can be. And we certainly have had our challenges in making sure that everything was buttoned up. And we've really gotten to a place now where we feel pretty comfortable that we have what we need and gotten to the reporting and the data that we need out of ECW that we're now just starting to entertain, putting vision on there. But we ultimately purchased that system to consolidate all three. Because if you think about it, if you have, you know, sometimes we have a single practice that has all three specialties, that has dental vision and ortho. And on a great day you can get a patient and new patients, they will be a new patient in all those services. But unfortunately, if you have to check them in and take their information for each one of those EHRs, it gets very old for that patient's mom, especially if that more than one kid. So there's a lot of opportunity in our space and that we have multiple specialty and to be able to have all that data in one place, just to see from patient retention and cross care and things of that nature. But it's definitely a heavy lift to get those consolidated. And you know, I highly recommend getting a lot of competence in the system, doing extensive testing before, before you, you set it all free like one, one practice and get comfortable with that data before launching into or moving over your whole company.

That's a. Yeah, no, that's a, that's a great point because when you think about changing the system, if you do a beta in one or two sites and you make sure. To get the sandbox option, which means you can get in there and play around and mess with stuff and not actually mess up your real data. That gives you a platform to be able to try to work out a lot of Those kinks from one or two practices worth of data. Not 36 or 50 or however many.

Exactly. So I've been prepping my RCM team. We're still a couple months out from transitioning over vision, but I'm like, think about everything you want to know and you want to be confident in before you. Before we transition over those practices, what you want to test, what you know. After dealing with the pain of the transition in dental, think about all the things you would have wanted to know before we started dental and apply that now as we go into vision.

And do you ever do dual data entry, meaning you'll put the information into both systems so that you can watch and see how it flows through and you're getting the right outcome.

We were implementing the. If we were transitioning over at this point, yeah, we definitely would.

Okay. I think that's good for our listeners to just hear you want to beta on one or two locations and do dual entry for a little while so you can compare and make sure that net net everything's working out the way that you think it should, the way your current system is relative to the new one you're transitioning to.

Absolutely.

Okay, awesome. I wanted to make sure we talked about your ECW experience. I wanted to. I'm going to jump topics just a little bit because you mentioned that you like coming in and getting things converted from cash to accrual or at least you've done a fair amount of that through your career. We're midstream right now with Mike Yates, the CFO over at Lumio Dental and Hollywood, Holly Williams down at Rodeo Dental. And we're doing a five part series on cash to accrual and how to do it. We're kind of going step by step and we've done two episodes, we've got three left to do. But since that's a theme that's on listeners minds and they're all actually probably wondering, Ken, why are you doing this episode? I want that next one on cash to accrual, but maybe could you share some tips and tricks as you've gone through that process on multiple occasions? And what would you. How would you advise listeners to attack that?

Sure. I think the hardest thing to nail down is revenue. Of course. I think the rest of it as accounting professionals comes pretty Straightforward, Absolutely. You need to dig in and get CPT level data, service billing information and payments that track back to those claims. If you can get to that data, that, that's key in when I'm going in and setting up cash to accrual, especially in this buyer, sorry, in the allergy and sinus space that was, you know, they're related but separate. And being able to track both business segments, when you're thinking about that and you're, you're pulling your billing data and thinking about how you want your revenue to look long term, that's going to help you really track the business. I think about it from, well, how do I want to group these, this, these CPT codes to really reflect what we're providing patients? Because then as you bring in your KPIs, you can truly see what your patient visits look like and what your reimbursement per visit is and whether you're getting better, you can really benchmark. That's honest. That's where you're getting to. I'm a data nerd. I can't ever get enough of it. So for me that's just something that you can really break down. And when you're trying to look, you've got multiple practices. It also gives you the opportunity to look at how each one's performing. You can see, you know, ones that are performing better or worse and then you can really start to dissect why one's doing better and why the other one's doing worse. And then, and then bring the one that's underperforming up to standard. So as far as the mechanics of all that, I mean, I think you probably know this year I like to look at, if you have that much data, you can look at CPT reimbursement by payer and then you can pretty

much see for the dental folks, that's the decode.

It's the decode, yes, CPT code. So for me, I like to break that down and figure out what you know, that kind of tells you revenue is what you get paid essentially. So once you have an understanding of what you're getting paid by CPT by payer, then you can extrapolate that data as you go forward with charge data to be able to affect that accrual revenue on a go forward basis. But again, for me, I think when you're, we're thinking about that, think about how you want to set up your revenue and what data you want to be able to extract from it. Once you have a working P&L so that you really can use that P and L as a tool and see what revenue you're getting per patient. I've had instances, and I would say this is a similarity that I've seen across in specialties is you can really see how providers are seeing patients and what services they're providing. And you can kind of. You can really kind of benchmark whether or not they're providing everything. And that's a quality issue, too, whether or not they're providing everything. So again, when you try, say, I'm going to use an allergy test as. Because I'm more familiar with that at this point with my. Only three months into dental. When you do an allergy test, there's. There's something that indicates how many things you should test for. And some providers may feel more comfortable or less comfortable with doing all of those prick tests, but if they're not doing all of them, they're not providing the service the patient came in for. So there's a balance there. But then you can use that as a training opportunity, or at least an opportunity to plan your revenue going forward to understand what that doctor's going to do. So it helps you on a number of areas and that you can use that to benchmark providers or as a way to kind of see how they're treating patients and use it as a training tool. It also helps you immensely as a planning tool when you're coming to budgeting and forecasting.

Yeah, that's right. That's a great point. When you get down to that CPT or decode level, it gives the clinical directors a ton of information to be able to look and say, okay, these two practices are very similar in terms of the populations they serve. But this one seems to be doing a lot more of this procedure, and this one seems to be doing much less or much more of another. And then it allows a clinical director to sit down and look at, okay, what is the procedure for doing diagnosis and creating a treatment plan? Because that's the first part is you've got to diagnose it and hopefully do comprehensive diagnosing and then build up your treatment plan. And then a beautifully done treatment plan doesn't help the patient if you're not able to educate them to understand what treatment is needed and why it's being recommended and why it's important to either do it now or perhaps wait or whatever the right timing is around it. All of that is within a clinician's purview. They have their autonomy to diagnose and treatment Plan the way that they see fit. Nobody's going to ever tell them to do it. But your clinical directors have an opportunity to look at what you said, quality, which is look at some of these things and compare them side by side and learn a lot. And the clinicians can learn a lot as well about how they're thinking and diagnosing and treatment planning. Is that a fair way to characterize it?

100%. And the other thing is there's a lot of showing that data to the providers, I think is also very helpful because people have in their head what they're doing and they're like, yeah, I always do X, Y or Z. And then when you are able to present the data, it helps them get insight as well. Of, oh, you know, I thought I only did that once or twice, but I'm actually doing it every single visit. It just bringing insight, like you said, and providing information to the medical directors to determine really what's the best quality of care for the patients. And you know, as you said, like, that is. That is within their control. But it is helpful from our seat to be able to provide them with insights to help them manage that.

Yeah, that's right. And then it helps us try to forecast or predict the future a little bit better, which is, hey, if you're going to see X number of patients a day on average, most likely you're going to do this many of these different procedure types and it's going to generate this type of volume and revenue.

Exactly.

Yep, that's a great point. I appreciate you going down that tangent with me because I don't think we talk about it enough out loud. But there's a lot of really tremendous opportunity that the conversion from cash to accrual creates and then the transparency that it creates for clinicians to hopefully improve patient experience and create standardization where it makes sense, but then protect autonomy where it makes sense because you just have different patients and different demographics.

Absolutely.

Awesome. Okay, we are now to the lightning round portion of the episode. Every guest gets to do this seven questions. You get to answer them as quickly as possible. What are you currently working on?

Personally decluttering my house. I have a 10 year old and you know, so things, things have stacked up. That's my mission right now.

And what are you the most proud of?

My son.

Wait, that's the one that's cluttering up the house?

Yes, but that's. Oh, I still think he's delightful. I just don't want to trip over the plastic toys so much.

I totally get It. I've got a house full, so I know how that goes. Okay. Favorite sports team?

Texas Stars. They're the local hockey team here.

Oh, very nice. Yeah, I like that. Favorite hobby?

Running. Oops. It's good. Mental health medicine.

And is this something that you have done competitively, you do for leisure?

Leisure, not competitively at all. Some days it's pretty sad, but I religiously get up and do it during the week. It definitely helps settle my mind. I think it makes me better at work, at home, all those things.

Yeah, no question. Getting that exercise, that rigor going in the body helps in so many ways. Do you ever do like a local 5k or things like that?

Yeah, those are lots of fun. But I don't think you'll ever find me running marathon. Okay.

Longest race? Half marathon. A 10k, 5k.

I'd go as far as a 10k. All right.

That's awesome. Favorite app on your phone?

The Lyft app. Very handy.

So does that mean you don't have a car? Do you take Lyft everywhere?

No, I have a car, but I live in Austin, Texas and I commute to Colorado Springs every other week for work. That's where the headquarters is. So Lyft is very handy. Getting from the airport to the office.

Very nice.

Couldn't live without it.

And favorite spreadsheet function, say Vlookups.

Probably my number one pivot tables close. I don't know, it'd be hard to rank them, but I would say I find myself using those the most or conjunction.

Very nice. Ok now as we are getting ready to wrap up the episode, if you put the hat on of a small group of practices or maybe a smaller DSO that is emerging and trying to figure out how to grow, knowing what you know from this 14 year career in healthcare finance, obviously a lot of M and A activity over the years. You've seen and done a lot. What would be some advice as they're trying to figure out how to grow and scale their organizations? What would be some advice that you'd pass along to them?

I would say just it'd be somewhat relentless in getting at the data. I think like I said earlier, I think the EHR and the billing data tells you an awful lot. It gives you a lot of insight. I think a lot of EHRs can be very cumbersome and I think people tend to give up and like, ah, you can't get to it. Reach out for help 100%. It's there. It is there. I've heard the I can't get to it so many times and it frustrates me because there's always a way to get there and it gives you such an insight into your business and what's happening and where you can improve the revenue. Obviously, like, everybody wants to grow your top. It's much more fun to grow the top line than it is to cut expenses and have to manage that closely. So, I mean, it's your biggest opportunity.

Outstanding. Great advice. All right, our listeners, if any of them wanted to reach out or connect with you, what would be the best way for them to do that?

Reach out to me on Facebook at the DSO Secrets Facebook site, please. And I look forward to it.

Yeah, that'd be great. Sometimes we get some really good discussions going over there. So saddle up. It might. We might have some good ones.

I look forward to it.

We cannot thank you enough for joining today's podcast episode and super grateful for all of the amazing insights that you've shared.

Thanks, Ken. I really enjoyed it. Thank you for having me.

Yeah, it's been an absolute pleasure. Many, many thanks to all of you for joining today. This is a wrap on CFO Julie Sarewitz, converting from other healthcare specialties to the wonderful world of dental Happy.

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