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Transcript
Bentson Clark reSource
1st Quarter 2016
Bentson Clark reSource
1st Quarter 2016
Looking Back at the Practice Valuations of 2015
Easy Rx: Digital Prescription Management
An Interview with Dr. Marc Lemchen & Mr. Khashi Rahmani
I
'm here today with Dr. Marc Lemchen and Mr. Khashi
Rahmani. Dr. Lemchen is a current customer, investor and
board member of EasyRx. Mr. Rahmani is the Business
Development Coordinator for EasyRx.
•
•
•
•
Attach supporting digital files, including STL files.
Manage prescriptions using the Prescription Dashboard.
Submit prescriptions to in-house and commercial labs.
Secure, compliant communication between the practice
and lab.
• Provide Prescription Feedback and comments to the lab
using the EasyRx rating system.
• Manage in-house labs and multiple users, such as
clinician and lab technician accounts.
Q: Dr. Lemchen, can you please tell us about EasyRx?
A: EasyRx is a cloud-based, digital patient appliance
prescription management software for orthodontic practices
and labs. EasyRx offers two products: EasyRx Practice for
orthodontic practices and EasyRx Lab for orthodontic labs.
Back in 2009, Jim and Mike Wright, owners of ODL, a
family- owned orthodontic lab in Buffalo, New York, started
developing EasyRx for their lab. It was obvious to them that
digital was the direction the industry would be going. They
wanted to embrace this digital transition - it just made sense
to develop an application to allow practices to implement
a full digital workflow. This includes creating universal
digital prescription forms, uploading the STL files created by
scanning patients or models and sending the prescriptions and
attached STL files to the labs (both in-house and commercial)
that practices use. Plus, we all know HIPAA is ever present,
which is why they wanted to develop a better way to
communicate securely with encrypted data. They did a great
job getting the technology right - EasyRx is a 100% browserbased web application that runs on PCs, Mac, phones, tablets,
etc. EasyRx supports multiple platforms, mobile devices and
multi-locations. In 2012, a separate, standalone company
was formed, which started marketing and selling EasyRx
commercially to both practices and labs.
Q: What about practice management integration?
A: In February, we released our integration with Dolphin Imaging
and Management software, which has been very exciting for
both us and our customers. Demographic data for the patient is
entered in EasyRx with one click, and patient appointment data
added to the prescription. We are very excited to work with the
other practice management software companies.
Q: You mentioned STL files, how does EasyRx work with
intra-oral scanners/STL files?
A: EasyRx was designed to support attaching, viewing and
managing digital files, including large STL files. Most major
intra-oral scanners support exporting scanned data in STL
format. For practices using the iTero scanner, we recently
implemented a really slick integration, making it very easy
to attach iTero scans to EasyRx prescriptions, eliminating the
need to export them manually. Once the iTero Case Order ID
is entered in EasyRx, EasyRx takes care of uploading, sharing
and storing these STL files. A huge benefit is that patient
prescriptions and supporting digital files are now connected
and managed from EasyRx, which practices and labs love.
Plus, we developed EasyRx 3D, a no-download browser based
STL viewer, allowing the STL scans to be viewed from inside
EasyRx.
Q: How did you get involved with EasyRx?
A: In 2014, I was looking for a paperless patient appliance
prescription and lab tracking solution for my practice. During
my research, I came across EasyRx and it matched the
solution that I envisioned using. My goal was to streamline
our prescription process, improve communication with my
lab, and move away from the time consuming and often messy
prescription. So I began using EasyRx in my practice and
immediately my prescription and lab tracking processes greatly
improved. The results were so remarkable that I invested in
the company. Since getting involved, we have made EasyRx
a doctor/office centric program by adding features such as the
Practice Feedback form, practice management integration and
instant appliance pricing. Adding these and other features have
increased the return on investment for practices using EasyRx.
Q: What if the practice does not have an intra-oral scanner
and is using plaster models?
A: Many of our customers continue to use plaster models.
Once the prescription is entered in EasyRx, it can be printed
via PDF and included in the box with the models then shipped
to the lab. The printed prescription even includes a handy
barcode the lab can scan when the models and prescription
are received. This way labs get a clean and easy-to-read PDF
printout instead of a potentially messy and illegible sketch.
Eliminated are those extra phone calls or the lab not being able
to accurately follow the prescription.
Q: Mr. Rahmani, what are the core features of EasyRx?
A: When we say "digital patient appliance prescription
management for orthodontic practices", we mean EasyRx
supports these core features:
Q: Can you tell our readers about the in-house lab feature?
A: Included with EasyRx Practice Premium is a fully integrated
in-house module. The in-house lab module allows practices
with their own in-house lab to create, submit and manage
prescriptions for their lab. The in-house lab module also
• Digitally create patient appliance, aligner and indirect
bonding prescriptions using the EasyRx Universal
Digital Prescription Workspace.
Continued on page 11
10
Continued from page 2
Chart 3: Valuation Data by Number of Practice Locations
Net
Collections
Practice
Income
Overhead
Rate
Value Before Value as % of
Debt
Collections
Single
Location
$ 1,490,678
$ 700,026
55.8%
$ 1,253,741
78.0%
Two
Locations
1,849,214
846,758
55.3%
1,520,048
80.1%
Three or More
Locations
1,955,429
749,299
61.9%
1,402,000
71.1%
All
Multi-Locations
1,875,768
822,394
57.0%
1,490,536
77.9%
Overall Average
$ 1,686,724
$ 762,322
56.4%
$ 1,374,291
77.9%
practice income represents the owner/doctor's total economic
benefit received from the practice.
While examining the average practice value in
dollars (Chart #3), the 27 single location practices' average
value was $1,253,741, whereas all mult-location practices,
whether two locations or more, had a higher average value.
From a collections standpoint, the single location practices'
average collections were $1,490,678. The average collections
for the 21 two-location practices were $1,849,214. The seven
practices with three or more locations had average collections
of $1,955,429. As in all prior reviews over the last ten years,
we continue to observe that practices with more than one
location afford the opportunity for higher collections to the
practice owner.
The average net collections for all 55 practices
during 2015 were $1,686,724. These practices had an average
overhead rate of 56.4% and an average value as a percent
of collections of 77.9%. The reasons we were asked to
conduct valuations in 2015 included the sale of 100% of the
practice, adding a junior partner, adding a family member,
merging with another local practice, buy-out of a partner and
general estate/retirement planning. No matter the reason, the
orthodontic practice valuation was an important early step in
the process of a planned transition.
An analysis of the overhead of the two groups of
practices (single vs. multi-locations) reveals that mult-location
practices have only a slightly elevated overhead rate, 1.2%,
when compared against the single location practices in this
data set. As such, we also continue to observe, and the data
consistently supports this conclusion, that adding a satellite
location has minimal incremental effect on overhead.
An understanding of the market's supply and demand,
as well as an extensive review of current and historical financial
and operational data of a practice, is necessary to determine
the value of an orthodontic practice. Valuation principles and
methodologies must be utilized and applied properly in order
to provide an accurate practice value. The 2015 valuation data
presented in this annual review should allow a doctor/owner to
benchmark his or her practice versus the current market.
The value of a professional practice is largely
dependent on the amount of income available to the owner.
Therefore, a practice's level of operating expenses (i.e.
overhead rate) has a significant impact on the overall practice
value. The overhead rates of the practices shown in Chart
#1 range from 45.0% to 70.4%, yielding a variance of 25.4
percentage points. This compares with a variance of 26.6
percentage points in last year's review (Bentson Clark reSource,
1st Quarter 2015). These overhead rates have been adjusted to
remove non-operating expenses, personal and discretionary
expenses of the owner/doctor (e.g. automobile, payroll taxes,
cell phone, discretionary travel and entertainment, family
member salaries) and the owner/doctor's compensation and
retirement contributions. Any associate doctor compensation
has also been removed. Therefore, the overhead percentages
represent the true costs to operate the practice, while the
Regardless of the location of your practice or its
size, increased focus on the metrics and factors that drive
profitability will be financially rewarding, not only in 2016
but for years to come. Increasing your scrutiny of practice
expenses while working to grow your collections will create a
positive and compounding result not only in your practice but
in your overall financial health as well.
Chris Bentson is a partner with Bentson Clark & Copple, LLC. Chris
is a veteran in the field of orthodontics with a 26-year career in the
industry. He can be reached via email at [email protected]
Doug Copple is a partner with Bentson Clark & Copple, LLC. Doug is a
Certified Valuation Analyst (CVA) and has excellent knowledge in both
valuation methodology and tax allocation/negotiations in the transition
process. He can be reached via email at [email protected]
3
Bentson Clark reSource
1st Quarter 2016
Bentson Clark reSource
1st Quarter 2016
Looking Back at the Practice Valuations of 2015
Easy Rx: Digital Prescription Management
Continued from page 1
Continued from page 10
limitations, we have selected 25 valuations to include in Chart
#1 (located on page 1) to provide a representative sample
of the body of work completed last year. The data in Chart
#1 should be used as a rough comparison tool for similarly
situated practices, but this article will discuss the averages
of all 55 practices valued. A summary of the averages for the
data published over the last nine years in the Bentson Clark
reSource is provided in Chart #2 (below).
As with prior reviews, the 2015 data represents
rounded net collections, practice income, adjusted overhead
rate, debt-free value and value expressed as a percentage
of collections for each respective practice. However, we
caution that solely looking at the high-level data presented in
this annual analysis does not provide the full compliment of
data used to accurately value any given practice. Many other
factors should be considered in order to fully understand
an individual practice. These factors include, but are not
limited to, current and historical financial and operational
data, demographic data, condition of the practice's physical
facilities, competitive environment, operating systems in
place, referral patterns, marketing program(s), treatment
modalities and staff. In order for a valuator to place a reliable
fair market value on any individual practice, a thorough
analysis of all operational and financial data must be
performed and an on-site practice visit conducted to verify
assets in service and understand the intangible and tangible
aspects of the drawing area. That information should then
be analyzed utilizing recognized valuation and accounting
principles and methodologies, to arrive at a final conclusion
of value for any given practice.
Certified Valuators and Analysts' Professional Standards,
and results are presented in a detailed summary report. Of
the many methods available to value a closely-held entity
like an orthodontic practice, an earnings approach, such as
a Capitalization of Income method, is generally preferred by
both the accounting and legal communities. All Bentson Clark
& Copple's published valuations are signed by a Certified
Valuation Analyst (Doug Copple, CVA) and a company
representative visits each practice.
includes a complete workflow module, allowing prescriptions
to be submitted and marked as completed. This provides a
strong management platform where doctors, clinical staff
and lab technicians can easily exchange information via
comments, make prescription changes, track revisions and
even rate appliances to constantly improve the quality of the
appliances. We found this supremely beneficial for large, busy
practices or multiple location practices.
The value as a percent of collections for all 55
practices valued in 2015 ranges from a low of 46.5% to a
high of 105.6%, a variance of 59.1 percentage points.
This range is similar to those seen in previous reviews.
The significant variance this year and in years past in this
common metric illustrates that simply using a "rule of thumb"
(i.e. value as a percent of collections) does not provide any
meaningful and reliable guidance as to the value of the
practice being examined. Each practice being valued has
unique characteristics that cannot be fully captured with just
a few high-level numbers like the ones given in the sample of
practices. However, over the last four years average practice
value as a percent of collections has varied only 1.7 percentage
points. We can conclude from this that average practice
values have remained fairly consistent during this time
period.
A: For 3D printing users, EasyRx provides a great space to
create prescriptions and to save and pull the STL files. This
STL management component often is not properly handled by
the embedded software included with the 3D printer. We have
practice customers that actively take 3D scans/STL data from
patient prescriptions and use those files to then print using a
3D printer. For labs using 3D printers, EasyRx Lab accounts
can also configure a nifty 3D modeling service to price and
invoice plastic resin model requests from practices.
As in previous years, we tracked the number of office
locations for each practice valued. Of the 55 total valuations
completed, 27 practices had one practice location, 21 had two
locations, and seven had three or more locations. Of the single
location practice, all but one was operating at the time of the
valuation with one doctor. Of the multiple location practices,
three operated with two doctors and two operated with three
doctors either as partners or associates.
Valuation studies performed by Bentson Clark
& Copple follow a strict valuation methodology and are
completed in accordance with the National Association of
Chart 2: Annual Valuation Summary
Year
Net
Collections
Practice
Income
Overhead
Rate
Value Before
Debt
Value as % of
Collections
2007 Average
$ 1,366,000
$ 690,370
50.6%
$ 1,056,440
75.3%
2008 Average
1,375,500
646,342
55.0%
1,023,240
71.5%
2009 Average
1,383,680
623,568
53.9%
1,049,280
75.1%
2010 Average
1,326,320
580,038
55.4%
1,020,280
76.1%
2011 Average
1,569,480
697,965
55.1%
1,206,200
75.8%
2012 Average
1,805,360
794,756
54.9%
1,428,640
79.6%
2013 Average
1,549,520
702,622
55.6%
1,260,960
79.0%
2014 Average
1,502,273
674,561
55.8%
1,190,491
76.9%
2015 Average
$ 1,686,724
$ 762,322
56.4%
$ 1,374.291
77.9%
shipped?", "What is the tracking number?". All of this is done
via one EasyRx account for all patient prescriptions for both
commercial and in-house labs. No longer is the office juggling
logins to multiple portals. Not to mention, EasyRx stores and
backs up patient prescription data (including STL files) per
ADA and HIPAA mandates.
EasyRx Also Provides a Better Patient Experience.
Not only do doctors love new technology, but we all
know patients do as well. Using EasyRx gives doctors a digital
workspace that they can share as a benefit of their practice. Patient
data is more secure, turnaround times and communication on
prescriptions are typically faster, and it allows doctors, in real
time, to check the status of any EasyRx prescription at any time,
from anywhere. We also recently added a Prescription Feedback
form where practices can "rate" their completed appliances
from both commercial labs and in-house labs. This allows the
labs to get real feedback to improve items such as the timeliness
of the requested prescription, the accuracy of the appliance,
and address quality concerns like if the appliance needed readjustment. If the lab tech learns about a consistently required
adjustment, the issue can be corrected. Ultimately, the quality
of the appliances is going to affect the satisfaction of the patient
as well as reduce chair side adjustments that take the doctors
time. The feedback forms provide in-house labs with the added
benefits of generating performance reviews for their lab techs
and a method for addressing quality control improvements.
Q: How does EasyRx work with 3D printers?
Q: Dr. Lemchen, why would a practice start using EasyRx?
A: We've already talked about a few critical reasons why:
EasyRx is digital, secure, compliant and connects the patient
prescription to digital files. Some additional benefits are:
Consolidate Workflow, Improve Efficiency and Reduce Mistakes.
Manual processes like faxing or emailing prescriptions
and completing prescription forms online at various lab
web portals are not just cumbersome, but also are prone to
mistakes and often require back and forth communication with
the lab for clarification. Not to mention these methods make
protecting patient data more difficult. The EasyRx prescription
is clear, legible and easy to understand. Using Prescription
Templates created by the practice, prescriptions can be created
in just a few seconds - with the doctor being confident the
prescription is correct while making adjustments or changes
to the prescription on the fly. This helps standardize appliance
and part design, from assistant-to-assistant, doctor-to-doctor
and across multiple locations.
We also want to engage in a broader initiative: EasyRx
helps practices go "paperless" by eliminating burdensome
paper trails and providing a 'green' space for doctors. Plus,
I'd say there is also a cool factor there as well - patients can
pick their colors and designs from the screen when viewing
the EasyRx acrylic chart!
Q: Mr. Rahmani, given all these features, how does EasyRx
impact the bottom line?
A: All of these benefits have a real impact on the bottom
line. Practices can manage their prescriptions better and
more efficiently, saving staff and lab-tech time. The clear,
legible and easy to understand EasyRx prescription improves
communication with labs - avoiding delays required to clarify
prescriptions and extra costs in redoing appliances due to
incorrect or confusing instructions. Remakes and repairs are
handled more quickly. Patient reschedules due to unfinished
appliances are reduced. EasyRx displays the lab's standard price
for parts and appliances as prescriptions are created, which
improves cost management. This also helps the practice ensure
the appliance price is fairly accounted for with the patient. Our
clients report that their lab techs have much better control over
their lab work, both in-house and commercial. Dr. Scott Frey,
an EasyRx customer in Allentown, PA, commented that his
involvement in the prescription process has been reduced and
EasyRx also organizes past, present and future
prescriptions for each patient, making it easy to see what
was previously prescribed and when it was submitted and
received.This makes ordering a replacement as easy as a few
mouse clicks as opposed to copying or re-creating previous
information. We also save the history of uploaded files such as
STLs, so if the practice needs to re-use a previously uploaded
scan, it's already there and accessible. EasyRx provides a secure
platform for the practice and lab to communicate. It offers
greater control over prescription management and workflow.
The Prescription Dashboard is always up to date, allowing the
practice to easily answer questions like "Did the lab receive
the prescription?", "Did the lab receive the models?", "Has it
Continued on page 12
Continued on page 3
2
11
Volume XI Issue I
397 South Swing Road
Greensboro, NC 27409
1-800-621-4664
www.bentsonclark.com­­­
1st Quarter 2016
Looking Back at the Practice Valuations of 2015 In This Issue:
By: Chris Bentson & Doug Copple, CVA
ollowing our tradition, the first quarter edition of the Bentson Clark reSource
begins with our highly anticipated annual review of practice valuation metrics
we've seen during the previous year. This year celebrates the tenth consecutive
year that Bentson Clark & Copple, LLC has released this data. The information
presented is compiled from several high level statistics extracted from the orthodontic
valuations we completed. We have found that many of our subscribers find the data
useful and the information published is often referenced within the orthodontic specialty.
F
Last year, Bentson Clark & Copple, completed a total of 55 orthodontic
practice valuations. This article will review the averages of these 55 practice valuations,
offering a window into the current values of orthodontic practices as seen by our
company. However, in order to provide similar examples to past years and due to space
Chart 1: 25 Sample Practice Valuations from 2015
Bentson Clark reSource
1st Quarter 2016
Easy Rx: Digital Prescription Management
Continued from page 11
his lab tech just seems happier, which has to be worth something.
Plus, when new staff is hired, EasyRx is easy to learn and
adopt. We have a volley of cool knowledge-based articles with
screenshots to get newbies using EasyRx quickly and efficiently.
We also have fantastic email and phone support to manage
any lingering questions to ensure our users are successful.
attach/store/share all file types (including STL), manage
prescriptions using the Prescription Dashboard, submit
prescriptions to in-house and commercial labs, Prescription
Templates, secure practice-lab communication, prescription
feedback, prescriptions and files stored securely in the cloud,
live phone and email support and access to new features. The
Premium subscription includes the in-house lab, practice
management integration and other features. For complete
details, please visit www.easyrxortho.com.
Q: What if the practice's preferred commercial lab does
not use EasyRx?
A: Practices can easily ask their preferred lab to sign up for
EasyRx. There is no charge for a lab to sign up to receive
and download EasyRx prescriptions. Additionally, labs can
pay monthly for more integrated solutions. Plus, a practice
can connect to any lab already using EasyRx. Just browse
the list of current EasyRx lab customers. Finally, the EasyRx
prescription can be printed and mailed, emailed or shared with
a lab not using EasyRx. This allows the practice to benefit
from many of the great features of EasyRx we've discussed.
Dr. Marc Lemchen founded Dolphin Imaging Systems, which became
Dolphin Imaging and Management Solutions. Dolphin was acquired by
Patterson in 2008. Dr. Lemchen is involved in several other software
companies including V.Com and Oaktree Storage.He has worked on
the development of a number of technologies used in orthodontic
appliance systems. He currently operates a private practice in New
York City.
Khashi Rahmani has been in technical sales and marketing for
more than eight years working with various Fortune 500 clients.
He graduated from Kennesaw State University with a degree in
Psychology and dedicates his spare time volunteering for the
Wounded Warrior Project. He also has six IT sales certifications from
industry leaders such as Cisco, Dell and VMware.
Q: Can you provide some information about pricing?
A: We offer three EasyRx monthly subscriptions for practices:
Per Script, Standard and Premium. All three plans support the
following: create and manage patient appliance prescriptions,
For more information or questions, please contact Khashi
Rahmani, EasyRx Business Development Coordinator at
[email protected] or call 1-888-340-3751 x700.
Practice
Net
Collections
Practice
Income
Overhead
Rate
Value
Before Debt
Value
as % of
Collections
1
$ 2,032,000
$ 601,472
70.4%
$ 1,045,000
51.4%
2
2,410,000
751,920
68.8%
1,428,000
59.3%
3
815,000
281,175
65.5%
529,000
64.9%
4
1,105,000
329,290
70.2%
764,000
69.1%
5
845,000
321,945
61.9%
606,000
71.7%
6
5,380,000
2,458,660
54.3%
4,475,000
83.2%
7
750,000
331,500
55.8%
545,000
72.7%
8
605,000
223,850
63.0%
442,000
73.1%
9
603,000
288,234
52.2%
468,000
77.6%
10
1,270,000
532,130
58.1%
995,000
78.3%
page 1
Digital Marketing
Trends to Watch in
2016
page 4
The Stress of it All
page 6
Easy Rx:
Digital Prescription
Management
page 10
The Bentson Clark reSource (ISSN 1559-1360) is published
quarterly by Bentson Clark & Copple, LLC, 397 South Swing
Road, Greensboro, North Carolina 27409. Periodicals postage paid
at Greensboro, North Carolina 27409.
Telephone: (336) 379-8822 / (800) 621-4664
Fax: (336) 333-0015
Website: www.bentsonclark.com
Email: [email protected]
Editorial Address:
397 South Swing Road
Greensboro, NC 27409
11
893,000
400,957
55.1%
712,000
79.7%
12
500,000
232,000
53.6%
409,000
81.8%
Subscription Price: $95.00 per year, 4 issues
Cover Price: $28.00 each
13
1,190,600
575,060
51.7%
975,000
81.9%
14
904,000
469,176
48.1%
741,000
82.0%
15
1,859,000
836,550
55.0%
1,538,000
82.7%
16
1,900,000
913,900
51.9%
1,596,000
84.0%
©Bentson Clark & Copple, LLC, 2016.
Copyright strictly reserved. This journal is intended for use
by the individual to whom it is addressed and may not be
reproduced in whole or in part or redistributed in any way including reproduction for internal distribution - without the
prior written permission of Bentson Clark & Copple, LLC.
17
810,000
445,500
45.0%
703,000
86.8%
18
1,423,500
681,857
52.1%
1,239,000
87.0%
19
3,197,000
1,694,410
47.0%
2,864,000
89.6%
20
2,945,000
1,560,850
47.0%
2,658,000
90.3%
21
1,628,000
857,956
47.3%
1,492,000
91.6%
22
3,547,000
1,745,124
50.8%
3,294,000
92.9%
23
960,000
311,040
67.6%
582,000
60.6%
24
3,300,000
1,590,600
51.8%
2,888,000
87.5%
25
$ 1,397,000
$ 523,875
62.5%
$ 1,090,000
78.0%
Continued on page 2
12
Looking Back at the
Practice Valuations
of 2015