Interview
OraMetrix: Marketing Medical Technology and Services

Technological advances are changing the face of every industry — from manufacturing and logistics, to communications and defense. Not to be overlooked is medical imaging, particularly the advances being made in orthodontics by OraMetrix, a Dallas-based provider of innovative 3D technology solutions.

We talked with CEO Chuck Abraham about the technology advances that paved the way for the development of the OraMetrix SureSmile® orthodontics products and services, as well as the company’s strategy for penetrating an already profitable and tightly controlled market segment.

Chuck, orthodontics was unchanged for almost fifty years. Then, in last decade, many changes have taken place. In this context, what was the genesis of OraMetrix?

The major change that occurred in orthodontics was the introduction of nickel titanium
shape alloys in the 1980s. This revolutionized the face of orthodontics. The properties of this alloy — shape retention over time, super elasticity, and its bio-friendly nature — enabled the development of arch wires that exert constant and comfortable forces on the teeth. What this meant to the patient was less pain, fewer changes, and a more predictable treatment plan.

Two issues persisted, however. First, orthodontics was still a reactive procedure based on watching how teeth responded over time. The ability to target the final dental position was missing. Second, even with new shape alloys, the orthodontist still was tasked with inserting hand-bent stainless steel wires toward the end of treatment to achieve the final result.

OraMetrix’ origins are rooted in three technologies coming together — in-vivo 3D imaging, advanced robotics applications, and CAD/CAM software systems. Our SureSmile® approach allows practitioners to obtain a digital image of the teeth, predetermine the final dental position, and shape wires with specific treatment prescriptions built in for each patient. Most importantly, it lets orthodontists maintain a proactive treatment plan and therapeutic design input.

When a new technology is genuinely disruptive, a company faces challenges on the industry, practitioner, and academic levels. For OraMetrix, what are these challenges?

The main obstacle we face is the lack of training. Orthodontics has traditionally been
reactive — almost an art form. It consists of bending wires by hand based on visual examination, and that’s the basis of academic training. We are now teaching digital treatment planning with accuracy better than 1/10th of a millimeter based on 3D imaging and taking into consideration all biological constraints. To be able to do this proactively is truly radical!

Some challenges arise from the fact that we are now working in a computer setting (rather than examining a mouth) and looking at 3D images in a 2D environment. Today, there are no teaching or training programs for a digital environment, partly due to academic budget constraints. OraMetrix has had to create the tools and curricula. We have also teamed with several teaching orthodontists who will introduce it to the universities.

Even though we are working with academia to introduce digital treatment planning, our “point of attack” is the practitioner. We believe that as practitioners go, so goes the orthodontic industry. The industry will pull academia into the digital age.

Give us some insights into what OraMetrix has done to determine the right strategy, develop consensus, and build a business around it.

Our motto is “an inch wide and a mile deep” — fewer practitioners with a significant percentage of their cases. As our revenue model is based on service, we want to be the method of choice for practitioners and cover 85% or more of each practice. This translates to 15-40 cases per practice per month, unlike other companies which are happy with a few patients from each practice.

We are in the “mass customization” business — it’s a different business model with a novel philosophy. This is what I mean: Traditional orthodontic care employs pre-stamped arch forms and resorts to hand-bending stainless steel wires in the final stages. OraMetrix is designing a specific target and manufacturing a therapeutic device for each patient. We treat every case as a separate prescription and custom-build a device specific to each patient. The “mass,” or volume, is derived by using robots to bend the wires accurately and efficiently for the entire practice.

Our model is built around a service-based business — we educate, support, and work in partnership with our customers, the practitioners, to achieve a high level of quality care. Future directions could include partnering with bracket suppliers; management information services providers; large dental companies with 3D CAD/CAM technology but no orthodontic presence; and practice consultants.

How is OraMetrix driving technology acceptance at the practitioner level?

In our case, early adopters have been the key to acceptance and success. These are orthodontists who have been in practice for a while, are successful, want to drive quality and establish standards of care in their practices, and positively influence their profession. However, few of them have forward-looking business pro formas and so the need to change isn’t obvious from their perspective. We have to come up with different scenarios, model different outcomes, and demonstrate the cost reduction and volume amplification benefits over multiple years.

OraMetrix’s customer service organization is very strong and works closely with the practitioner throughout the cycle. We have received some very positive feedback. One practitioner said that “the Ritz-Carlton could learn some things about service from OraMetrix.” We think we’re on the right track.

Despite the obvious advantages of SureSmile, what have been the barriers to adoption by orthodontists — and what is OraMetrix doing to change this?

The first barrier is the educational challenge we talked about earlier. The second is a lack of economic imperative — most orthodontists are private and profitable, and the industry is in a favorable supply-demand environment. We’re in a situation where we have to develop a clear and compelling ROI proposition.

We demonstrate ROI on a couple of different levels. At the patient level, we track the patient experience from beginning to end to prove the optimization of the clinical experience. At the practice level, we generate the economic return by reducing variable expenses, enabling premium pricing for premium quality care, and creating capacity and driving volume.

At this point, the practitioner decides to convert his practice, and it takes another 9-12 months before capacity is really created. Since we shave 40% off the END of treatment, the practitioner really sees results around Month 24. There is a dramatic ability to increase revenues — without having to expand facilities or add people.

How do you gauge practitioner ROI?

We start looking at patient records and statistics (typically about 20 random cases/non-SureSmile cases to examine everything from number of wires, length of appt., etc.), then look at practice expenditures (consumables, labor, rent, etc.) as well as patient type and mix. This information creates an accurate economic picture of the practice. At that point, we understand and can demonstrate where the practice can go using SureSmile, benchmark against the baseline, and jointly set goals and milestones.

SureSmile seems to be on a slow but steady launch path. Can you share what the strategy has been, and why?

We completed multiple clinical cases internally about a year ago, but needed to replicate the success in a commercial environment. We now have finished 30 cases in practices that have validated our ability to deliver results in a commercial environment. These cases have helped us ensure protocol accuracy and streamline our overall service approach. Additionally, we have improved our software significantly over last 12 months and now have over 700 patients being treated with SureSmile.

If you’re going to create a service business, you have to have the right infrastructure. For us, it was building it from the ground up — service, training program, tracking, and more. There simply was no other business upon which we could model OraMetrix. Additionally, we had to build our infrastructure at a reasonable pace so that customer service didn’t suffer in those early months. Now everything is in place, and we can scale more rapidly.

Now that SureSmile is in the market, what are your marketing and sales strategies?

We have a three-pronged attack. First, we help the patient understand the value of the SureSmile system and thus the reason for the premium cost. This is fairly easy because they already need orthodontic care. We make a strong impression, and hope they tell all their friends.

Second, we market to referring dentists who deliver 20-30% of the cases to the orthodontist. This is the next easiest market as they understand and appreciate the technology and why this is good for the patient.

Third, we will soon launch local or regional PR/ad campaigns in support of specific practices. The marketing is done under the orthodontist or practice name, similar to the approach used in the LASIK industry.

What do you consider the most critical factor to the long-term success of OraMetrix?

Customer Service! Creating successful partnerships with our customers is the future of our business. We are a service-based business model. There are 8,000 orthodontists in the U.S. so every single customer is important to us. And we want every one of their patients to be treated using SureSmile.

Back to the top

Charles Abraham is a medical technology veteran with more than 23 years of experience in medical imaging and medical devices. Mr. Abraham began his career at GE Medical Systems where he spent 17 years in sales, product management and general management roles. His last assignment was as a global business manager for vascular imaging in Paris, France. After GE, Mr. Abraham joined Nellcor Puritan Bennett, the world leader in products and services that diagnose, monitor and treat the respiratory impaired patient, as the vice president and general manager of Global Sleep Solutions Business. At Nellcor, he developed and implemented a global strategic plan for the consolidation of seven businesses into a single global business unit.

Before coming to OraMetrix, Mr. Abraham was chief executive officer of Florida-based eMerge Interactive, Inc., an Internet and technology-based company delivering innovative solutions to the U.S. beef production industry. While at eMerge, Mr. Abraham built the United States’ largest cattle marketing service and in 1999, led the company to a $105 million initial public offering.

Mr. Abraham received a B.S. in biological engineering at Mississippi State University at Starkville.

April 2004