Quantum Health is intended to be established as a Limited Liability Company in Oklahoma City, Oklahoma with the expectation of rapid expansion in the dental services industry.  The Company solicits financial backing in order to be able to introduce its new Dental Service Organization (DSO). The dental industry has consolidated rapidly over the past 3-5 years due to increased competitive pressures and stand-alone practices are looking for new ways to remain competitive in a rapidly changing industry.

The DSO segment of dentistry is the fastest growing segment in the dental industry.  The industry is currently approximately 25%-30% consolidated and is expected to reach 70% - 75% consolidation in the next 10 years. DSO’s have grown in the Oklahoma market for the last few years and growth is expected to continue for at least the next five years. This makes for a very attractive market for any new DSO and there are currently multiple “out of state” organizations buying Oklahoma dental practices.  Quantum Health will concentrate on dental practices that provide the greatest margin and greatest cash flow/profitability.  

Currently we have four major competitors within the Oklahoma area. These are Dental Depot, Spring Dental, Enhance Dental Group, and the Legacy Dental Group. Each of these companies target the same clients and each has a fine reputation for customer satisfaction. However, the market in Oklahoma is growing so fast that the demand is currently greater than supply. This is an excellent opportunity to gain market share and attain a stable position in the industry.

The following business plan outlines the projected five-year performance and operational plan of Quantum Health based on its existing and projected sales. Quantum Health will offer Dental Management Services to affiliated dental clinics with the goal of improving patient care and increasing clinic profitability by increasing revenue via insurance reimbursement audits and negotiations, capturing unperformed procedures that have been treatment planned, increasing procedural offerings (ortho, endo, perio, Invisalign) that are often referred out, reducing overhead by streamlining and consolidating inventory and personnel , streamlining standard of care and creating a centralized platform.

Quantum Health is intended to be established as a Limited Liability Company in Oklahoma City, Oklahoma with the expectation of rapid expansion in the dental services industry expanding into Arkansas, Texas, and Kansas.  The Company solicits financial backing in order to be able to introduce its new Dental Service Organization. 

With the inevitable boom in the business that will occur in the next five years due to Covid – 19 back logs, research and forecast analyst expecting a sharp increase in business activities in late 2021 onward. Analyst expect at least 20 percent upward trend in the industry dynamics with high volume. As the dental industry is concerned, due to lock-down activities, the decline in production from last two years will have a positive impact on new startups, as it will push production in a positive direction. 

Quantum Health, with a service-oriented business model and manageable operating cost, offers a very stable business forecast. We expect the variable costs to be around twenty seven percent in year one, declining to around nine percent in year ten and a conservative growth in revenue of twenty percent by year five. We will assiduously be updating and improving the financial feasibilities and variance analysis for smoother operations of the business. Initial investment plan involves an investment of roughly $ 650,000, $150,000 of which will be by the owners and the rest to be arranged by the bank loan facility or private equity. 

The company plans to develop marketing and operating alliances with industry leaders and pursue new acquisitions of dental practices in need of dental management services.The market strategy is to capitalize on the industry’s rate of consolidation by acquiring existing dental practices exhibiting moderate performance and improving profitability via multiple growth strategies.The variance analysis controls the financial model while sensitivity checks and the discounted cash flow will help the company to achieve more logical decisions.  We have a keen eye set on expansion to cities around the United States with a focus on the south and southeast.

Quantum Health’s short run goal is to have two to three locations with a yearly revenue of at least $ 750,000 in year one. Moving at a positive pace, we can expect a revenue to reach $11,966,000 and cash flow to reach $2,190,197 per year by year three. Business profitability is analyzed and calculated via many techniques to start the business with a cost and benefits alignment.

Quantum Health will offer Dental Management Services to affiliated dental clinics with the goal of improving patient care and increasing clinic profitability via the following tactics:

·       Increasing revenue via insurance reimbursement audits and negotiations

·       Capturing unperformed procedures that have been treatment planned

·       Increasing procedural offerings (ortho, endo, perio, Invisalign) that are often referred out

·       Reduce overhead by streamlining and consolidating inventory and personnel  

·       Streamlining standard of care

Creating a centralized platform to include the following:

·       Patient Scheduling

·       Accts Receivable/Insurance

·       Accts Payable

·       Human Resources

According to E-Magazine by Medical Expo, the global dental services market is expected to grow from $365.57 billion in 2020 to $435.08 billion in 2021 at a compound annual growth rate (CAGR) of 19%. The growth is mainly due to the companies rearranging their operations and recovering from the Covid-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. The market is expected to reach $551.91 billion in 2025 at a CAGR of 6%.

North America was the largest region in the global dental services market, accounting for 35% of the market in 2020. Asia Pacific was the second largest region accounting for 30% of the global dental services market. Africa was the smallest region in the global dental services market.

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Quantum Health has identified the following three-year objectives:

·       To establish profitable dental service operations.

·       Grow business to achieve and sustain profitability and hire additional staff.

·       Build trust and advocacy in social media enabling further scalability with a successfully proven operating model.

·       Create customer loyalty

·       Improve customer lifetime value

·       Create and set benchmark profit thresholds.

·       Create more local offerings

·       Improve Profitability

·       Provide dental memberships

Quantum Health has identified the following keys to success:

·       Offer a premium service over local competitors.

·       Heavy use of social media marketing to build trust and authority among current and potential clients.

·       Targeting broad market, not only focused on niche markets

·       Continuous improvement and value addition

·       Maintaining customer trust and loyalty

 

Quantum Health will operate its corporate headquarters in Oklahoma City, Oklahoma.        Benefit of the Location:

-          Huge metropolitan area

-          Large target market opportunity

-          Limited competitors in the area

-          Operating costs are less than the national average

The global oral care market size is expected to reach USD 49.5 billion by 2028, according to a new report by Grand View Research, Inc. It is expected to expand at a CAGR of 5.9% from 2021 to 2028. The growing awareness among people regarding oral hygiene and the increasing incidence of dental caries has led to the high growth of the market. The World Health Organization (WHO) states that 2.3 billion people suffer from caries of permanent teeth. An unhealthy diet (particularly high in sugar) is one of the major factors contributing to the rise in the number of dental caries at the global level. 

According to Imarc services, the global oral hygiene market reached a value of US$ 40.3 Billion in 2020. Looking forward, IMARC Group expects the market to grow at a CAGR of 3.5% during 2021-2026. Keeping in mind the uncertainties of COVID-19, we are continuously tracking and evaluating the direct as well as the indirect influence of the pandemic. 

As per Mordor Intelligence, the dental equipment market was valued at USD 7,650 million in 2020, and it is expected to reach USD 10,150 million in 2026, registering a CAGR of 4.6% during the forecast period, 2021-2026.Dentsply Sirona reported that its net sales for the first quarter of 2020 were down by 7.6%, or 4.3% in organic terms, due to low patient volumes and elective procedures. In terms of revenue and net sales, this downfall trend was observed in several other companies as well in the market. 

However, this is expected to be a temporary downfall, and the market is expected to resume growth in the near future. Global Burden of Disease Study in 2017, it was estimated that oral diseases affect close to 3.5 billion people worldwide, with caries of permanent teeth being the most common condition. Globally, about 2.3 billion people suffer from caries of permanent teeth, and more than 530 million children suffer from caries of primary teeth.

 

As per market watch research, the global Dental Services market size is projected to reach USD $728,590 million by 2027, from USD $418,310 million in 2020, at a CAGR of 7.8% during 2021-2027.

According to Market and market research, the oral care market is projected to reach USD 53.3 billion by 2025 from USD 45.8 billion in 2020, at a CAGR of 3.1%. The increase in the prevalence of dental caries, periodontal diseases, and other dental diseases, growing awareness about oral hygiene, rising dental healthcare expenditure, an increasing number of small/private clinics with dental dispensaries are some of the factors contributing to the growth of this market. However, the competitive pricing pressure faced by prominent players is hampering the growth of the oral care/oral hygiene market.

According to Motor Intelligence, North America accounted for the largest share of the market due to factors such as wide acceptance of technological advancements in dental equipment, like lasers, intra-oral cameras, digital radiography, and CAD/CAM systems, continued favorable demographic trends, and heightened consumer awareness of the importance of oral hygiene to the overall health. In December 2019, BIOLASE Inc. launched a new Epic Hygiene laser after the Food and Drug Administration’s (FDA) clearance.

Also, as per research conducted by RAND Corporation, Arlington, United States, in September 2020, nearly half of the respondents (46.7%) reported delaying going to the dentist or receiving dental care due to the COVID-19 pandemic in the country. 

Among them, 74.7% reported delaying a check-up, 12.4% reported delaying care to address something that was bothering them, and 10.5% reported delaying care to get planned treatment. This delay in treatment is expected to worsen the disease in the future, which may increase the chances of more dental caries and infections. Thus, in the future, the market is expected to register lucrative growth.

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The rapidly changing lifestyles and improper diets, including sugar-rich diets, and the increased consumption of alcohol and tobacco, have made oral health one of the major public health problems in almost every part of the world. According to the World Health Organization, new trends are:

·       Oral health conditions

·       Dental caries (tooth decay)

·       Periodontal (gum) disease

·       Oral cancer

·       Oral manifestations of HIV infection

·       Oro-dental trauma

·       Noma

·       Cleft lip and palate

·       Noncommunicable diseases and common risk factors

·       Oral health inequalities

·       Prevention

Strategic Insight

Our current acquisition strategy is to acquire dental practices from clinicians who are approaching retirement, but not yet ready to step away from the practice.  Our acquisition profile is:

·       Dentists aged 55 - 60

·       Location: Stand alone or strip mall

·       Minimum collections of $850,000 per year

·       Good ratio of PPO and FFS – we are not interested in Medicaid based practices

·       Office open 4 days per week, Monday through Thursday

·       Standard procedure mix (fillings, crown & bridge, etc.)  Referring out ortho, endo, and perio. Practices with high specialty procedures will be discounted

·       2000 to 3000 patients per doctor

Implication of Strategy

Once a practice is acquired, we plan to increase top line growth and cashflow by deploying the following strategy:

·       Reduce supply overhead by leveraging buying power and streamlining inventory

·       Perform Insurance Contract Audit.  Re-negotiate for higher reimbursement on top 20 procedures, identify insurance codes that result in non-reimbursement.

·       Increase capacity by offering extended hours of service.  

·       Perform chart audits to identify unscheduled treatment and ensure clinicians are treatment planning in practice management software.

·       Patient Retention through clinically – led standard of care.  Clinical leadership will develop a clear standard of care and clarify treatment protocols.

·       Build up Re-care - identify and measure patient retention rate.  

·       Increase new patient flow via strategic marketing campaigns

·       Keep more procedures “in house” such as ortho and endo.

·       Same-Day Treatment 

·       Create easy, convenient point-of-service collection via check, credit card and the ability to pay online and by text.


Additional Information & Financials Available Upon Request.