Corporate Dentistry vs. Private Practice: Pros and Cons

Whether to pursue corporate dentistry or a private practice is one of the great dental debates of our age. Corporate dentistry has long been demonized for turning something highly personal (dental care) into a franchise model governed by the bottom line. Increasingly, though, some dentists have begun to realize that corporate dentistry has its own unique set of advantages. Ultimately, which route to choose will depend on how you see your career progressing.

Private Practice

If you are looking for full autonomy in the theories, practices, and techniques you choose, private practice is the best choice for you. As long as you follow the best practices outlined by your governing bodies, you are free to craft your practice however you see fit, from opening an in-house dental lab to offering cutting-edge techniques. You can focus your practice on a particular patient group, such as children or those with special needs. You can offer sedation dentistry or not, dental implants or not, all at your discretion.

Likewise, in a private practice, your time and earning potential are your own. If you want to golf on Tuesdays or offer late night hours on Friday, you are free to do so. With the right leadership skills, a deep understanding of your clients’ needs and desires, and a bit of luck, you can even earn a higher income in private practice.

However, the freedoms of a private practice come with a price. You are a small business owner, with all of the responsibilities that the title entails. You alone are in charge of hiring, scheduling, insurance filing, accounts receivable, vacations, workers comp issues, and all the rest. If you don’t have a solid, experienced team that you can trust, you may find yourself spending more time handling the business side of your practice than you do practicing dentistry—yet you only make money for the time you spend actually treating patients.

Another consideration is how established corporate dentistry already is, or is likely to become, in your town. With a huge marketing machine and the ability to offer targeted incentives based on market research, corporate dentists are very difficult to compete with. Once your practice is up and running with a loyal client base, you may be able to withstand the onslaught. However, it is incredibly tough for new dentists to gain traction when competing against the big corporations.

Corporate Dentistry

If you want to focus solely on dentistry, corporate dentistry may be a better choice. In many cases, you can negotiate a schedule and salary that are guaranteed regardless of the ups and downs of the market. You may even be able to negotiate a part-time schedule, such as four days a week at your preferred hours, that pays the salary you would like. In nationwide groups, you may even have the freedom to simply transfer to a new location if you decide to move.

In addition, you will most likely not be assigned duties outside of the typical scope of dentistry. Hiring and firing, accounts receivable collection efforts, patient and staff scheduling, training, and all the rest are typically handled by the corporation’s team rather than the dentists.

However, corporate dentistry also has its own drawbacks. You will be a cog in the corporate machine, expected to maximize the practice’s income. You may be constrained to a specific theory of dentistry and limited only to the techniques and materials that the practice selects. Your treatment plans may be scrutinized by corporate management, and you may be asked to attend meetings where specific ideas are strongly pushed. You will likely be unable to try out new, cutting-edge techniques or strategies.

Ultimately, there is no right answer to the question of corporate dentistry vs private practice. Your personal and career goals, your approach to dentistry, and even your location should all factor into your decision. If you do decide to practice corporate dentistry, make the effort to find the right fit. Just like any other service industry, there are excellent, good, marginal, and poor dental organizations. Of those that are good to excellent, some will be a better fit for you than others.

Ascent Dental Solutions is dedicated to helping dentists build their practices. If you are interested in learning how to take your dental practice to the next level, please contact us today at (800) 983-4126.

Checklist for Buying a Dental Practice

Whether you are newly out of dental school or have been running your own practice for years, buying a dental practice is a huge commitment. It is absolutely essential to do your homework, ensuring that the practice you select will truly serve your needs. In addition, the paperwork requirements are significant, requiring a great deal of time and effort. With so much going on, it is easy to overlook some very important steps. Here is a checklist to keep you on track when buying a dental practice.

Research Phase

The first step is to research available practices in the area you would like to serve. Make appointments to go see each practice and speak with those in charge. Examine the existing equipment and make note of anything you would like to upgrade or change. Talk to the staff. Find out how many regular patients are currently on the books. Learn as much as you can about the practice’s current financials.

Build a Team

Once you have narrowed down your list to the ideal practice for you, it is time to build your team. At a minimum, you will need to retain a CPA and an attorney. You might also choose to add a business coach, a partner, and other professionals who can help make your transition as smooth as possible.

Apply for Financing

Although some dentists wait until their offer is accepted to find financing, it is far better to obtain pre-approval for a loan. Presenting a letter of pre-approval reassures the seller that you are serious and minimizes the risk of the deal falling through, which can help move yours ahead of offers from other dentists without pre-approval.

Make an Offer

Remember that you are not buying an inanimate object. You are purchasing another dentist’s life’s work. He or she has worked very hard to build the practice and form relationships with both the staff and the patients. Therefore, a lowball offer, like you might make for real estate, is inappropriate. While you certainly want to leave room to negotiate, and to get the best deal, consider the full package when preparing your offer. A fair offer shows respect and will be seriously considered, while a lowball offer may cause the dentist to move on to the next offer without negotiating.

Also include your letter of pre-approval, as well as your resume or CV and letters of reference. These documents show the dentist that if he or she accepts your offer, the practice will be in good hands.

Review the Sales Contract

With your lawyer, go through the sales contract with a fine-tooth comb. Ask for clarification on any clauses that you don’t understand. Make sure all blanks are filled in, and that all terms are as expected.

Manage All Other Documents

If you are assuming equipment leases, contact the lease companies for the proper assumption documents. Review the accounts receivable if they are part of the purchase. Assess the practice’s regulatory compliance status. Also speak with the property owner to set up either a lease assignment or a new lease on the physical location.

File Business Documentation

The exact documents that you need to file vary widely by location. Your attorney can help you determine what documentation you need. In general, expect to file paperwork with the state board, the IRS and state tax commission, any dental societies to which you belong or plan to join, and the unemployment office. You will also need the appropriate licenses and permits to operate a dental practice in your state and city. In addition, you will need to set up a business bank account if you do not already have one.

Get Insurance

Depending on your state and local laws, as well as the requirements of your bank, you may need several different types of insurance. Speak with an insurance agent in your area who is familiar with dental practices to ensure that you get everything you need.

Set Up Your Practice

Although you are buying an existing practice, it is important to adjust it to your needs and goals. Set your fee schedule. Decide which dental insurance carriers you will accept, and file the appropriate forms. Choose an employee benefits package. Set up your accounting system. Decide how payroll will be handled. Organize your billing and insurance filing systems either internally or through an outside company. Order business cards, prescription pads, stationery, and other branded products. Select a dental lab. Order new equipment if needed.

Smooth the Transition

Immediately after signing the sales contract, determine how long you will need to get the office reopened. Review the appointment book and contact any patients whose appointments need to be changed. Send out a letter of introduction to all existing patients, and plan an open house. Meet with the employees to explain how the transfer will affect them. If desired, present a letter from the seller to the patients, employees, or both, to help them understand why the previous dentist left. Send a letter to your own existing patient list, if applicable, to let them know of your new location.

Buying a dental practice is complicated, but the rewards can be significant. Do your homework, assemble an experienced team, and take the time to help smooth the transition for both patients and staff. This will minimize disruptions and help your new practice start off on the right foot.

Ascent Dental Solutions is dedicated to helping dentists build their practices. If you are interested in learning how to take your dental practice to the next level, please contact us today at (800) 983-4126.

Should You Hire a Dental Practice Consultant?

Most dentists enter the practice because they have a passion for the work, not out of a burning desire to be a CEO. Yet building and growing your dental practice requires you to be a top-notch business owner, capable of running everything from marketing to human resources, and from bookkeeping to daily operations. You certainly do not need to perform all of these tasks yourself, but you do need enough understanding of each process to tell whether it is working well or needs adjustment. As insurance reimbursements go down and expenses rise, it is more important than ever before to run a streamlined practice that drives profits without compromising the quality of care.

A dental practice consultant can be the solution. While you are understandably attached to certain ways of thinking and managing your practice, a consultant provides an outside perspective.  He or she can take an objective look at the business side of your practice and help you see things in a new way. With a consultant by your side, you are truly poised to take your practice to the next level.

However, hiring a consultant is not for everyone. If you are considering taking this step, it is important to understand some basic truths about what to expect.

Consultants Are Not Miracle Workers

A good consultant will challenge your assumptions and help you see your practice in a new way. However, the hard work of implementing changes will fall on you. In the short run, while you are developing new systems and processes, your workload may skyrocket. Your consultant will likely give you lots of homework to complete between meetings, and you may wonder why you brought this person in at all. Remember that it is the consultant’s job to assess your practice and make suggestions, but your job to bring those ideas to life. In the long run, though, your practice will thrive. Just keep your long-term goals in mind.

Change Begins with You

If your dental practice is struggling, it is easy to blame external factors. Your location is terrible, your staff is lazy, you can’t afford a fancy new machine, or a myriad of other excuses. While some of these may be objectively true, they are symptoms of the problem, not the root cause. As the business owner, you and you alone are ultimately responsible for the practice’s success. Bringing in a consultant is a sign of strength and good decision-making—you are admitting where you need help, and hiring someone with the specific skills and knowledge to fix those areas. Take a deep breath and trust the process, remaining open-minded to ideas that might at first strike you as strange.

Clinical Skill Is Important, But Not Sufficient

Many dentists with struggling practices try to educate themselves into success. Post-doctoral training, clinical workshops in cutting-edge techniques, adding in-house dental labs…all of these things help you to become an objectively better dentist, but have little to no effect on growing your practice. Remember, your patients are not trained in dentistry. Although the digital generation has more general knowledge about various treatment options than its predecessors, few patients are really able to judge whether one dentist’s clinical skills are better than another’s.

Continuing education is always an excellent idea, but to truly take your practice to the next level, you need to switch gears to focus on the business management side. Sometimes it’s as simple as going back to basics: Do you accept the insurances that are most common in your area? Are your wait times reasonable? Do you offer online appointment scheduling? Do you have extended or Saturday hours? Your consultant will analyze all of the little details that could be hurting your business.

Avoid One Size Fits All Solutions

Be wary of dental consultants who want to sell you their practice management “system.” Implementing systematic processes is an excellent thing, but they must be tailored to your practice. Every dental practice has a different patient base and different staff members, all with their own unique needs and desires. Local norms and conventions vary widely, as do individual offices. Look for a consultant that will make the effort to analyze your practice and make recommendations that are tailored to your needs, rather than plugging you into an existing system.

In today’s economy, dentists must run smooth, streamlined practices that provide top-quality care at minimal cost. To achieve this, it is vital to ensure that the business side of the practice is fully optimized. As most dentists are not business experts, bringing in outside help can be the solution. However, a dental consultant is not right for every practice. The points above can help you decide whether it is the right choice for you.

Ascent Dental Solutions is dedicated to helping dentists build their practices. If you are interested in learning how to take your dental practice to the next level, please contact us today at (800) 983-4126.

New Dentists: independent or corporate practice a personal choice

Congrats. You’ve finished school and graduation was a blast. However after you’ve taken off the cap and gown, you have dentistry degree certificate and a lot of decisions to make. Life happens fast and you don’t have a lot of time before you have to begin your career.

You’re at the proverbial fork in the road. And you really have two options: corporate dentistry (Managed Service Organizations or Dental Support Organizations) or starting your own practice.

Corporate dentistry is definitely an easier road and a lot of grads are tempted by the allure of a steady, predictable income. I come from a different world. I know how great it is to have your own practice, set your own rules, define your own standards for performance, and even set your own hours of operation.

I’m not here to judge. What works for one dentist won’t work for another. Corporate dentistry isn’t going anywhere and both private practice and corporate work each have pros and cons to consider.

One of the objections I’ve heard when speaking to new dentists who are considering opening their own practice is, what they see, as a lack of experience in clinical skills and complete absence of any practical business knowledge.

To these dentist corporate dentistry looks pretty good: more skill experiences, a built-in primer on running a business and the piece of mind that comes with knowing everything else is the corporation’s problem.

But here’s the thing. I’ve talked to many practicing dentists who have taken this path only to find out that the above scenario isn’t necessarily true.

Experienced dentists today say 50 or 60 percent of the stress in their practice, is not related to their clinical focus but rather, caused by staff and patients.

These are stresses that will happen whether you’re the captain of your boat or a hired hand on someone else’s.

For me, being independent and in control of both the clinical and business aspects is very important. Not only do you control every factor in your professional life, it also pushes you to get the training on the clinical skills you need and upgrade your management skills.

It really comes down to the kind of person you are. Do you just want to do A, B and C? Then explore a corporate dentistry opportunity.

Just don’t do it because you’re lacking clinical skills and business savvy. You can learn those while developing your own practice. And this is something I help new dentists do through my private coaching programs.

So ask yourself: what kind of a person am I? Are you happy being the employee, or would you rather develop the skills to create something special? The answer to that will ensure you make the right decision: your right decision.

Marketing an essential part of running a dental practice

What’s marketing? To most dentists it’s a few ads in some dental mags and the local paper.

Marketing doesn’t seem at the top of the list when running a dental practice but it is invaluable.

I alway like to learn from the best so I talked to Russell Trahan, owner and CEO and President of the PR/PR public relations firm.

He says that the sweet spot for advertising is a mix of social media and print media. Although the allure of TV seems tantalizing for some he cautions that the ROI on that expense may not be worth it. Quite simply, radio or TV is here for a moment and gone the second it leaves the air.

Long term results lie with print and social media simply because after the first viewing consumers can return to them for future research. Sometimes they’ll even tear out a page from a magazine or newspaper - wherever they are. As for social media, the options to save content or bookmarking it is a very common practice.

Trahan also says the size of a practice doesn’t matter. It's all about name recognition.

Here’s perhaps the most important thing. You really can’t stop marketing and promoting your business. Dental schools are continually pushing new dentists into the marketplace, so new competitors are opening their doors monthly.

How much should you be spending on marketing? Trahan says between $1,000 to $3,000 per month. A good goal is to get your name to pop up when a viewer Googles a term like hometown dentist.

As for print media, local is usually better. But Trahan told a story of a dentist who once bought an expensive ad in Sport Illustrated. As he told it, it made his business profile pop. He was now a local dentist with an advertisement in a national publication. Because of that, he got new business from people who cited the ad when they came in. It was the proximity effect and his clients told him that as well.

So should you be planning your next advertisement in Time magazine? Well, probably not. But you need to continually market and advertise your practice. Because if you don’t, you’re not really open for business.

The direction of your dental career starts on Day 1

In any career, the earliest decisions are always the most crucial.

Decisions made at the outset of any endeavor directly determine the path you're on and at least in rough terms, where you will end up.

And yes, when you walk out the doors of dental academe, the choices begin.

Today, the new dentist is faced with an important fork in the career road that really didn’t exist when I started out some 34 years ago.

To go the corporate dentistry route or not is a decision that would have vexed Hamlet and it’s the same for new dentists.

Corporate dentistry (Dental Service Organizations or Managed Service Organizations) is a very viable route for new dentists. But the decision to go that route has everything to do with the kind of life you want to live and the kind of person you are.

Here’s a few questions to mull over.

Do you want to set up your own service standards or subscribe to ones set up by the chain’s management?

Do you want to grow your own practice through your own marketing or using DSO chain-wide advertising?

Are you comfortable with the change in ownership that can happen with a DSO or MSO and the new standards of performance and profit sharing that can result?

These are all very important questions with many spin-off issues from each.

Exploring these issues with new dentists is the most rewarding part of my career as a dental coach. If I can help guide them to the decision that’s right for their lives, it means success for them and me.

And after all, we all want success on our terms. How one goes forward with their career is directly reflected with how they want to live their life.

Is your business in the good profit or bad profit game?

In dentistry as in most businesses, how your business operates says more about your company than you might suspect.

The culture of your workplace reflects your company values. If staff attend carefully to patients instead of rushing them in and out, then you have a more healthy culture.

 

Your people are your company’s greatest asset. In order to find continued success you need a hardworking, dedicated and motivated team. But if you do not have a great people-culture, it’s your responsibility to improve it.

I have been in this game a long time.  I have found that one of the key factors in  success has been the positive relationships with team members, leaders and managers have internally and also with patients. It doesn’t happen overnight. You have to cultivate this over time with excellent processes, procedures and outstanding communication.

Why bother?

Good relationships lead to what I call ‘good profits.’ This is a continuous revenue stream that comes from good customer interactions and relationships. In essence you’re building customer loyalty not on price, but service based on a personal touch. People want to stay with you. When this is done they will tell their friends and family members.

Of course the opposite can true. Bad profits are those revenues earned when you chase after every dollar and squeeze employees at every opportunity. They won’t like you. It will show in the way they act around patients and each other. As they say “you can’t fake authenticity.”

The result is patients don’t feel loyalty and they don’t return. Worse still they may also tell their friends about the experience they had. An unsatisfied customer is more than a missed opportunity – it’s multiple lost opportunities.

Unsurprisingly, what you need to do is treat your customers the way you’d want to be treated.

Good profits are earned when customers or patients continually come back for additional services and products and rave to friends and family about their excellent experience.

These customers become promoters of your business and they’re worth far more than any advertising dollars you’ll spend. People trust word-of-mouth and they are the most cost-effective growers of your business you’ll ever have.

The ultimate question is how do you create the appropriate processes and procedures? Start by measuring what makes your customer or patient satisfied and happy. This comes with quality assurance and quality assessment on every point of service. Review and improve your existing processes and procedures and focus on your customers and patients, plus team members, leaders and managers. All areas of an organization need constant improvement and that will come with continual organizational communication.

The goal is you want your team members and patients to (BLT) Believe, Like and Trust you and your organization.

So what does your business focus on: bad or good profits?

If you’re a dentist or other healthcare professional and you’d like to discuss how to lead a business that works for you please get in touch.

 

Dentistry is changing: do you know where you fit in?

Dentistry as we know it is changing right before our eyes. The data is clear: fewer and fewer dentists are practicing as solo practitioners and more of us are moving toward group practice. While everyone has their own reasons, the biggest draw seems to be creating a better work-life balance.

 

patient-care-and-customer-service

It’s an understandable choice. On one hand your are expected to be an excellent healthcare provider, leader, and business person. While at the same time you have a family and all the obligations that come along with it.

For the majority of us who are not superhuman, something has to give. And most of the time the hit is taken on the family side of the ledger.

So it’s no surprise that many of us look to corporate dentistry – specifically DSO’s and or MSO’s – to even out the personal balance sheet.

Dental Service or Support Organizations or Managed Service or Support Organizations are markedly different from ordinary ‘mom and pop’ solo dental corporations.

The biggest benefit to the dentist looking for a bit of balance and structure is that MSOs come with built in processes, marketing, education and support that eliminate many of the headaches solo practices have to deal with.

But there is also a cost. That cost comes from the loss of control to equity partners, more interested in profits than patients. In many instances these groups are only in the game for 3 to 7 years after which the investment arm cashes in it’s chips and moves on.

At that point another group will step in with it’s own ideas about how things should be done.   

This invariably causes disruption and a lack of continuity within the organization. On the positive side process and procedures will be put in place that could perhaps reduce waste and control some costs. But that doesn’t entirely offset other factors such as additional layers of management, and an emphasis on short term profits at the expense of long term failure.

This isn’t an issue for discussion anymore. We must adapt and modify our practices and prepare team members and the public for these changes.

There is room for both business models. And the hope is that each model will force the other to become better not just in care but in service.

In the end patients are attracted to a particular dental practice based on their needs, finances and education. A majority will be moved by slick marketing, convenient hours and numerous locations. But others will value the continuity of care specialized services and BLT: an office they Believe In, Like and Trust.

If you’re a dentist and you’d like to discuss how to create a practice that works for you please get in touch.

Three simple rules for passing on your dental practice

Passing-down-you-dental-practice

They say you can’t take it with you. And it’s certainly true of dental practices.

Whether you plan on passing it on to family members, selling to a corporation or even another practitioner, there are three simple rules to keep in mind.

Rule 1: Value does not equal price. Value is an estimate of the financial worth of a practice determined by formulas. Price, however, is determined by the careful dance between how desperate a seller is to sell and how determined a buyer is to buy.

At present time, most of the dentists I know above the age of 60 cannot wait to sell their practice. Typically, the dental practice is one of their largest assets and is generally considered the best way to ensure a happy and  secure retirement.

Rule 2: Gross production is not what you want to purchase. A much better determinant of the value of a practice is really net income. So whether you’re considering selling your dental practice or making a purchase, it’s critical that you look at net income from the seller’s tax returns related to the practice. What a buyer should look for before making the purchase is the dental practice’s ability to make a profit. So as a seller the number one goal is to make the practice as profitable as possible before putting it on the market. The more profitable it is, the more valuable it will be to a would-be purchasers.

Rule 3: Never buy a practice’s potential, only the present or historic value. Future profits can be uncertain. Many times I’ve had someone say to me, “Dr. Coughlin, I’m thinking about buying a practice. It has great potential.” You really want to make your purchase price based on today’s value, not what tomorrow’s value might or might not be.

I cannot emphasize enough that even if you feel you’re not interested in selling your practice or you’re not considering buying a practice you should be prepared to sell at any point in time.

If you are considering buying a practice or selling your own practice, I may be able to help. My coaching services leverage over 30 years of real experience growing my business from one practice to 14.

Contact me today and let’s make sure you make the best and most profitable decisions based on your current situation.

Corporate dentistry not friend or foe

What’s the fastest growing segment of the dental health care industry? No, not actual dental care methods like braces and tooth replacements. It’s actually corporate dentistry: the organizational DNA of the industry.

Although many of us are aware of the accelerating incursion of dental chains into our industry, it’s worth mulling over the facts for a moment and why it matters.

As a catchall term, corporate dentistry is growing at almost 40 to 45 percent each year. These Managed Service Organizations (usually chains) or Dental Service Organizations (same, except a DSO can be a stand-alone operation) can be owned or invested in by venture capital or equity firms.

It can be argued that such a financial relationship is problematic in practice. Equity firms typically invest short-term so when they get involved in dental firms they’re trying to triple or quadruple their money over a 3 to 7 year timeframe. When they get out and sell to another finance firm, this can be disruptive to the dental operations in that they may have to financially modify or change their models.

Most of these dental practices are run like franchises. Some have a universal look and feel along with strict franchise practices and branding. Others, usually existing dental practices, are allowed to retain their own unique character and feel, with the franchising instead focussing on suppliers and general business practices.

Keep in mind that like with all things there are excellent corporations, less than excellent corporations and poor corporations. The critical aspect is what is their short and long term goals are. And that should be your focus when considering bringing your practice under their system.