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HL20: Jeffrey A. Parker—Making Margin While Serving the Poor

 |  By Philip Betbeze  
   December 02, 2013

In our annual HealthLeaders 20, we profile individuals who are changing healthcare for the better. Some are longtime industry fixtures; others would clearly be considered outsiders. Some are revered; others would not win many popularity contests. All of them are playing a crucial role in making the healthcare industry better. This is the story of Jeffrey A. Parker.

This profile was published in the December, 2013 issue of HealthLeaders magazine.

"There's enough money if you run it properly."

Ten years ago, Jeff Parker, after a successful career as a high-level executive at ConAgra Foods, General Foods Corp., and Sara Lee, found himself retired to a South Florida barrier island where, as he puts it, he spent his time "getting older but still wanting to contribute to society."

He decided to put some of his money to good use by endowing a scholarship for 75 students and shortly thereafter became an executive in residence at his alma mater, Jacksonville State University in Alabama. He occupied that chair, but he still wasn't scratching the itch of entrepreneurship and he was disillusioned after helping at least a couple of people at the university's entrepreneurial center develop successful businesses. He never heard from them again.

"Later, I was asked by a dentist to look at and offer some advice for an underperforming, nonprofit dental center for Medicaid children in Anniston, Ala."

Before he knew it, the founder of what was then known as the Calhoun County Dental Center, a retired cardiologist named Warren Sarrell, asked him to lead the nonprofit. He accepted and became CEO.

The original dental center was founded in Anniston, Ala., by the Community Foundation of Northeast Alabama to provide dental care to a subset of the population that private practice dentists frequently refused to see because of low reimbursement—kids in that county eligible for or on Medicaid. Parker was brought on to grow it. And grow it he did.

Now, after eight years of steady growth, the still-nonprofit company employs 250 people, has 34 straight quarters of patient growth, boasts 14 clinics statewide (of which five also have optical capabilities), and is serving as a model for states nationwide seeking to improve dental (and now optical) care for their economically disadvantaged population. Last year, the Sarrell Dental and Eye Centers (named for the founder, who died in 2012) had 135,000 dental visits and 9,000 optical visits for what had been a severely underserved population.

"Six of 10 Medicaid eligible children in this country cannot see a dentist," Parker says, explaining that many dentists don't take Medicaid patients because they do not reimburse at the same level as private insurers or a cash-paying patient.

The idea that Medicaid and the Children's Health Insurance Program don't pay enough is a myth, Parker contends, with evidence to back up the claim. Strangely enough, the organization has succeeded at least in part by driving down dental costs. In fact, the company's average reimbursement per patient has gone from $328 in 2005 to $125 in 2012. Scale has been the key, including electronic health records and digital panoramic x-ray machines. That, and salaried dentists.

"In other words, whatever is state of the art equipment, we have it, and it's paid for, off of primarily Medicaid and CHIP revenues," he says. "We don't rely on cash donations or grants to sustain ourselves. If I can build 14 offices with as good equipment as anyone else, with my major source of income as Medicaid and CHIP, there's enough money if you run it properly."

Good dental health has been cited as a key variable of whether someone is less or more susceptible to future, more serious health challenges, and the focus on prevention resonates in the imperative in all of healthcare to reduce spending and improve care. Parker has had battles with the state dental society for years over protecting their turf. Peace between the two groups has been the rule of late, because even though Sarrell is allowed to see adults and those who are not on Medicaid, the center does not actively recruits these patients.

Parker claims that Sarrell's model of dentistry—which forgoes the small-office, mom-and-pop profit motive of most private practice dentists—is largely what has allowed the organization to be so economical. It's also what attracts the best and brightest young dentists to practice there, he claims.

"I think it is difficult for anyone in America to rationalize how the CEOs of Cedars-Sinai, Children's Hospital of Atlanta, or even the University of Tennessee Medical Center, can do neurosurgery, heart transplants, and liver transplants and no one questions them," he says. "However, in over 40 states, the Dental Practice Act restricts a business person from using a nonprofit dental clinic for the underserved using licensed dentists to clean teeth and fill cavities. Personally, I feel this is a national disgrace."

Sarrell has about 60 dentists, 90% of whom live in the Birmingham area, the state's largest city. With only two offices in Birmingham, Sarrell rotates dentists among the far-flung clinics. All of the dentists undergo chart review from a chief dental officer, so dentists know they will be audited, which, along with straight salary compensation, eliminates any incentive for overtreatment.

"The overwhelming majority of our dentists are paid a straight salary," he says. "There is no incentive but to do the right thing every time for our patients."

To facilitate better outreach and recruitment of patients, the company employs a full-time community outreach person with college degree in every community it serves.

"We are recruiting the top students from the top universities in our region to Sarrell Dental, notably because of our competitive salary and benefits," he says. "But a differentiating factor is that we can also help some of the poorest children from some of the poorest counties in America."

Other states have taken notice. Parker says Sarrell is on the cusp of expanding outside Alabama, and he's now more satisfied than ever about his "retirement job."

 "Some kid or parent thanks me all the time for getting dental care for their kids. There are different ways of getting paid, and that's a heck of a good one," he says. "We have had more than 500,000 patient visits without a patient complaint to the Alabama Dental Board."

Philip Betbeze is the senior leadership editor at HealthLeaders.

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