Press Direct International

This is “Part II” of a two-part article on the subject of Dental Associates. (Part I is available at: http://www.gregwinteregg.com)

Perhaps now or some time in the future, you’ll think about adding an associate. Whether that time is today or ten years from now, it is best to be informed on the subject. Part one of this article offered guidelines to help determine the need for an associate in your practice.

In this article, we’ll pick up with questions you should ask once the decision is made to hire an associate. Specifically:

1. Do you want an associate or a partner?
2. What type of work do you expect the associate to do – i.e. what would be his or her job description?
3. How should you pay an associate?
4. How do you find the right associate?
5. How does the associate’s treatment philosophy match up with yours?
6. How can you tell if the associate “fits in” with your office, staff and patients

Let’s start with the first one: “Do you want an associate or partner?”

You should never enter a relationship saying “Well – come on board and we’ll see how it goes and work out the details later.” If agreements are not clearly delineated, each party has their own “idea” of what the agreement is and they seldom match! The associate starts with the idea he or she will be offered a partnership and eventually buy the owner/doctor out. The owner/doctor is entertaining the thought but is ambivalent. The associate makes the schedule easier so the owner/doctor, who originally planned on retiring in three to five years, has more time off, feels better, and decides to work another fifteen years. The associate feels abused and taken advantage of and decides to leave. The owner/doctor finds himself back at square one. What happened? In this case the doctor failed on both the communication and leadership fronts.

Had good communication existed from the get go, with a clear reality of where the relationship was headed, things might have turned out different. You don’t have to offer a partnership right up front. If partnership is a possibility though, at least have some benchmarks in place and get these agreed upon by both parties beforehand – and stick to the agreement. For example, you both agree that you will work together for a set evaluation period before talking partnership, etc. One excellent example I saw was a doctor who had his new associate (potential partner) sign three agreements: a) associate, b) buy-in and c) buy-out. If the associate met certain guidelines and the relationship was good, he could buy in. If the owner then wanted to sell the remainder the associate could buy him out, etc. Either way – you might not want a partner – ever. This should also be made clear. Talk it over with your accountant or other advisors and decide what you are shopping for before you start on this journey.

The next question is: “What type of work do you expect the associate to do – i.e. what would be his or her job description?”

Do you expect them to take all operative and root canals off your schedule and see all the children that come in? Will they treatment plan and present their own cases? Determine issues like this prior to interviewing, much less hiring. Keep in mind that the associate is there for you and your office. They either fit or they don’t. Imagine you were selling your house. If the realtor brought in a potential buyer that asked you to add a pool and two more bedrooms, you wouldn’t do that to make it work. The realtor would find another buyer. Same concept with an associate. For example: You want an associate to free up your schedule by taking all of the fillings, kids and root canals. The prospect you are interviewing refuses to do root canals and doesn’t really like kids. Next… You get the idea. While some things are of course open to negotiation – don’t go crazy attempting to accommodate. If you needed a full time receptionist and you interview someone who can’t work Mondays and Wednesdays– why hire them? You eventually will find someone who can.

The third question is “What should you pay an associate?”

This depends on what you expect the associate to do. If they are to find their own new patients, present their own cases, etc. the percentage would be higher. Conversely, if you handle all of the treatment planning and fill their schedule for them, the percentage would be lower. Sit down and do the math. If you had an associate producing X amount at Y percentage – what would that equate to and how would that impact your bottom line? Also consider how this would impact your schedule. If you are booked out for several weeks and you give an associate all of the operative, root canals, single unit crowns, etc. you would be able to move all of the major work on your schedule forward making you more productive. For a GP associate, anything over 35% of collections in compensation is too high in my opinion (specialists are an exception). I’ve seen some doctors who pay their associates 25% if all they do is work on patients with no treatment planning responsibilities. You can also mix a per diem and percentage. If you are going to do this, you have to ensure it is viable for the office.

For example:

You guarantee a doctor $450 per day. He works 16 days per month, making the guaranteed salary $7,200 per month. You decide you don’t want to exceed, let’s say, 30% in compensation for the associate. So we take that $7,200 and divide it by 30 and multiply by 100. We do this to determine what $7,200 is 30% of.

Here’s how the example works out:
1. Associate Monthly Base = $7,200
2. $7,200 Divided by 30 equals 240.
3. 240 multiplied by 100 equals $24,000.
4. $7,200 is 30% of $24,000.

So, if we are going to give a percentage on top of the base, we tell the associate that they get 30% of anything they collect over $24,000 in a given month and distribute that amount at the end of the month.

On the other side of this, what happens if this associate who you are paying $7,200 a month and, after ramping up, their average collections are only $15,000? In that case, you had better do something as they are costing you more than they are worth – in this case 48%!

In my experience, if an associate can’t do $40,000 per month, no one is going to be happy. They won’t be making enough money and below that level of production you aren’t making enough of a profit to keep them around. You must have enough business to make it worth everyone’s while and they must be confident enough clinically to produce it.

The next question is: “How do you find the right associate?”

You’ve filled in the blanks and decided what you want and what you have to offer. If no prospects are immediately to hand, you need to go out and find someone. The question is: where to look? The answer: Everywhere! Here are some ideas:

1. Advertise in the paper.
2. Ask various sales reps (i.e. your supplier, etc.)
3. Call your friends and colleagues.
4. Advertise in local and state dental journals and newsletters.
5. Advertise online.
6. Have your office manager help you contact doctors in your immediate area to see if they know anyone.
7. Sign up for an associate “headhunting” service (these can be pricey).
8. Contact residency programs in your state. Dental schools are also an option, but if you need someone who can hit the ground running from a production standpoint, this may not be the best option as you may have to deal with a learning curve.

Just keep in mind that if you outflow enough, you’ll eventually find someone who will be a good fit.

The fifth question is: “How does the associate’s treatment philosophy match up with yours?”

Let’s say you’ve worked out the need for an associate, what the level of compensation is, the job description and the hours that he or she will work. You also searched for an associate and are now interviewing an associate prospect. He or she seems like a nice person but what is his or her treatment philosophy? Divergent treatment philosophies between a senior doctor and his or her associate is the cause of more turmoil than you’d suspect.

How can you prevent this in lieu of having to work together for six or more months? Try this approach: During the interview with your prospective associate, take ten charts, along with accompanying x-rays, models (if there are any) and temporarily remove the treatment plans. Now, ask the associate to draw up a treatment plan based on the information to hand. Match up the associate’s treatment plan with the treatment plan you made for the case. If they are relatively the same, you may have a good match. You could also describe a number of clinical scenarios and see what course of action he or she would take and see how that agrees with what you might do.

Ultimately, the MOST important thing to consider with an associate is their level of clinical competence.

You may not be able to establish this for yourself without working with him or her. There are a couple of things you can do to get an idea of where they are at clinically.

1. They could treat you. (Even if it is a prophy, you’ll see their chairside manner and the like.)
2. You could have them bring in models and pictures for cases they have completed.

Other than that, you’ll have to check up on their work with your patients.

If you feel you have found the right candidate, you could possible have them treat you and some of your staff. If the team isn’t sold on them as a clinician they’ll be reluctant to have patients see the ‘new guy/girl’. You’ll end up just as busy as you are now while paying the associate to sit around because “none of the patients wants to see the associate.” It may be a great ego-trip to a have an associate but if it doesn’t move you in the direction of lightening your load or expanding the practice, it’s not worth it.

I once had a doctor tell me that there was no way he would let his associate work on him. Excuse me?! They represent your office. Their treatment is your treatment! You are responsible for their work. And no one wants to be re-doing dentistry for free after a sub par clinician leaves the practice, not to mention the effect this has on your patients and practice.

These are a few of my thoughts on a subject that could easily fill a book. Try these simple guidelines and get good advice from your advisors. In the end, the decision ultimately is YOURS. Choose wisely. If you would like to get more information on this subject, or on how to get more fee-for-service new patients to keep your practice healthy, to expand or to make it possible to add an associate the “New Patient Workshop” from MGE (http://www.mgeonline.com) is the solution.

With news headlines sounding alarms like, “Joblessness on the Rise,” “Mortgage Crisis Unfolds,” “Record-Breaking Oil Prices,” and “Recession Looms,” one could easily assume that the U.S. economy is in for a dramatic downward spiral. Just as with other stories in the news, however, reality is much more subtle than the headlines. Although the short-term outlook for much of the economy is bleak, not every sector will suffer. “Even though we’ve seen some dramatic economic shifts – particularly in the real estate market – RV resorts and manufactured home communities continue to be sound investments,” says Leon D. Meekcoms, President of Parkbridge Capital Group, Inc. (www.parkbridgecapital.com), a privately held real estate investment, acquisition, and brokerage firm.

Meekcoms attributes the strength of the manufactured home and RV resort markets to two underlying factors: prosperous Baby Boomers on the verge of retiring are trending toward having affordable second residences, while vacationers are opting for seasonal recreation within driving distance of their homes. “Properties within two hours of major cities and those that are in the Sun Belt will continue to appreciate and provide the foundation for increasing returns over time,” says Meekcoms.

Pre-built resort cottages, commonly referred to as “park models,” are perfect for cost-conscious Boomers. Maxing out at around 400 square feet, these mini-homes may look like cottages or cabins, but are legally RVs. “Park models are the ultimate hybrid,” says Meekcoms. “They can be luxurious and have myriad amenities like a house, but without the tax implications of a permanent residence.” Because of the dramatic increase in the popularity of park homes, manufacturers are enjoying keeping up with consumer demand.

Similarly, traditional RV manufacturers are seeing strong demand, and industry insiders estimate that over 8 million families will own recreational vehicles by 2010. Although one might assume that record-breaking fuel prices would discourage RV travel, Meekcoms says that the opposite is true. “Research indicates that those who own RVs overwhelmingly feel that RV vacations are much less expensive than other travel options,” he says. “What we’re seeing is that RV owners are spending less time on the road and more time at their destinations.”

Trends in both park models and RV travel are strong indicators that RV resort properties are a wise investment, which is why Parkbridge Capital has focused on this market. “The number of upscale park model and RV resort communities is relatively small, so demand is sure to outstrip supply in coming years,” says Meekcoms. “We’re confident that buying, upgrading, and expanding existing properties will maximize investor return while providing Americans with an affordable, or even quite luxurious way to achieve the lifestyle that they desire.”

(This is Part One of a two part article on the subject of Dental Associates.)

Several times a week I field associate related questions from colleagues. These come from dentists who need one right away, as well as those just entertaining the idea for the future. The pros to adding an associate are obvious: more service for your patients, potentially more time off, someone to cover emergencies, etc. There are also plenty of cons: your patients may not like the new doctor, and you might worry about them making off with your patient base, etc. When discussing associates, thirteen years in private practice and close to as many as a trainer/consultant have taught me one hardbound rule: there is definitely a right and wrong way to go about this associate business.

If one or more associates are in your future plans (whether this is now or ten years from now), there are several things to consider:

1. When should you get an associate?
2. How would you structure compensation?
3. What’s the best way to find one?
4. What are the important points to cover when interviewing?
5. How will you integrate them into your practice?

I’ll start with number one: When should you get an associate?

Arguably, this is the most important question. This is also where I see the most errors made. Let’s say you are doing moderately well, still have some openings in your schedule and get about 10 new patients per month. You decide to expand your hours and bring in an associate to become more productive. The reasoning seems sound – you are adding more hours and providing more treatment opportunities for your patients – but this rarely works. New patients don’t magically show up, the associate is unproductive and unhappy. You either a) let him or her move on or b) start moving work from your schedule to make the associate busier/happier. The net result is less profit and a problem, i.e “how do I keep my associate busy?”

In this scenario the office was in no position to justify adding an associate. As such, this begs the question: How do I know when the “right time” is? To answer this question, ask yourself the following:
a) Is your practice growing (or has it grown up to now and you just seem to have “maxxed out”)?
b) Are you scheduled efficiently?
c) Is your business profitable?
d) Is your schedule relatively full?

If you answered “Yes” to all of the above, now is probably a good time to add an associate.

I’ll give you this scenario: Your practice has rapidly (or steadily) expanded up to a point where you can’t take in more patients than you currently are. You are operating efficiently and the office is profitable. You just can’t see more people and things start to book out a couple of weeks in advance. Now is the time to add that associate to serve three purposes:

1) To provide faster and more efficient service to your patients,
2) To lighten your schedule so you can focus on the type of work you want to do and
3) To increase practice productivity.

If my practice was in the above situation, I would look at adding an associate – perhaps one to two days a week to start and roll from there.

From a practical standpoint, I would also look at how many charts I had. In my experience 1,000 charts, if handled efficiently, can potentially keep a doctor and hygienist productive. Also, maintaining a ratio of one doctor to one hygienist seems to work best. If you are already have two full time hygienists (who are booked), chances are you need an associate now. However, you also need to consider the other points above.

Business survival is inexorably connected to expansion. If the office is well-run (which would mean that it was expanding at least a little bit), there would come a time when you couldn’t produce any more yourself and would need an associate. The level of production that will require an associate will be based on your style of practice, fees, type of dentistry you do, etc.

At MGE (http://www.mgeonline.com) we suggest you get an associate when there is more work than you personally can handle and patients are being pushed out on the schedule too far.. How long is too long for them to wait? Although this is ultimately your decision, it shouldn’t be more than a couple of weeks. Too long of a wait is just not good service!
One of the questions asked above when deciding whether or not you should add an associate, asked about expansion. How much expansion do you need? To start, are you even getting enough new patients to support yourself? How many should you be getting? This depends in a large part on how you practice, but I’ll give you a basic formula to use:

a. Take your total number of active charts
b. Multiply this by 20%
c. Divide “b” by 12 (months in a year)
d. The figure from “c” above gives you the minimum number of new patients you should be getting on a monthly basis to maintain your practice’s health. Note that this is just to keep you going. You would definitely need to exceed this number to add an associate.

Example: Dr. Smith has 1200 active charts. 20% of this is 240. 240 divided by 12 is 20. To maintain a healthy practice, Dr. Smith should be getting at least 20 new patients each month.

Keep in mind this formula assumes a couple of conditions exist:
a) The new patients are fee-for-service.
b) The doctor has an acceptable skill level when it comes to treatment presentation and acceptance (which is reflected in production and collections).

If you want an associate, I would recommend that you far exceed this 20% factor. This is where the “MGE New Patient Workshop” comes in handy – whether you want an associate or not. If you want more fee-for-service new patients to keep your practice healthy, to expand or to make it possible to add an associate the “New Patient Workshop” is the solution.

About Greg Winteregg DDS:
Greg Winteregg, D.D.S is a graduate of the Indiana University School of Dentistry and was an MGE (http://www.mgeonline.com) client for 18 months prior to becoming a partner in the company in 1994. While a client of MGE he increased the number of new patients from 10 per month to over 60 per month – with no HMOs, PPOs or discount plans! During this period, he was also able to successfully integrate an associate and more than double practice revenues, while and reducing his work week to under 25 hours.