Monthly Archives: June 2015

The Dental Dow Jones – 1st Quarter 2015

2015 OFF TO A GOOD START!

dental dow first quarter is upFor the mature area practices sampled, practice production was up 6.1% and collections were up 6.7% compared to the first quarter of 2014. This is the most growth in these indices since 2004.

Patient flow was up 5.1% with new patients up over 10%. Again, the most significant jump in patient flow we’ve seen in years.

One quarter doesn’t a year make but this is certainly good news. It’s also nice to see that downtime in the Doctors’ schedules is down 11% and in the hygiene schedules down 6.5%.

Associate Interview Suggestions

Question marks - Faq conceptLocating and signing a good associate is an important process. There are few other relationships that can have more impact on your life (your professional life for sure). I have seen many smart Dentists stumble in this process and lose a good potential associate. Or worse, not do a complete enough interview and be stuck in a “Bad Marriage”. So, I’ve developed a brief list of suggestions.

General Approach: Ask the associate what their long and short term goals are. Get a picture of what their picture is. Then, share your “pictures.”

In this way, you can see if both your expectations match by focusing on the positive aspects of getting together. This will help you work through anything that may be a problem or barrier.

Only once you’ve “shared pictures” should you then get down to specifics to do with associate compensation percentages, benefits, and other nitty gritty details.

Finding the right associate is a sort of courtship process. You don’t want to bring out the “prenup” too quickly. If legal details are brought up too soon, that can make things a contest. In fact, you do not want to prepare an associate contract until you are pretty much decided that you both want to practice together. Go for the handshake first, the lawyers second.

Sample Questions To Ask An Associate Candidate

Long-Term Questions:

  • What are your long term/big picture goals?
  • How much would you like to make?
  • How much would you like to work?
  • What kind of dentistry do you like to do?
  • What kind of technology is important to you?
  • What would be your ideal work week?
  • How much vacation time will you want?
  • “Tell me about yourself” (family, hobbies…you just want to see if the associate will reveal themselves to you).
  • How involved would you like to be in leading the staff?
  • Do you have any particular areas of administrative or clinical interests that you’d like to help our practice with?
  • Is practice ownership important to you? If so, what sort of timeline do you have in mind?
  • Are you working with any particular advisors or accountants?
  • What other opportunities are you looking at?
  • How does my opportunity rank with your other opportunities?
  • What sort of dental experience do you have (if there are other offices that they’ve associated with or worked in). What did you like or not like about those experiences?
  • What are the very most important things that you are looking for in a place to practice?

You can sometimes agree to disagree. You don’t have to see everything exactly the same way. One of the benefits of having an associate is to have someone who sees things differently than you do or has different interests.

Short-Term Questions:

  • What would you like to see happen in the coming year regarding (things like the above, hours worked, visits and so on).
  • What sort of compensation did you have in mind?
  • Would you be willing to work evenings, Fridays or Saturday hours?
  • Are you willing to be “on call” on weekends?
  • Are you O.K. with occasionally doing prophies?

Clinically-Related Questions:

  • What is your opinion on amalgams vs. composites?
  • What conditions, in your opinion, warrant the recommendation of a crown?
  • When are implants indicated?
  • What are your thoughts regarding ortho?
  • How much time do you like to have for a crown prep? Seating?
  • Are you into Cad Cam (Cerec)?

In summary, the best associate interview is a dialogue. A conversation. After the interview, make notes as to what the associate said was important. Chances are you’ll need more than one interview to really sort out how compatible you are. It also makes sense to have the candidate spend as much time as possible in the office observing. In fact, their willingness to take time to come and observe is an important sign of their interest and commitment.

PPOs & Practice Transitions

As published in The Profitable Dentist, Summer 2015

Delta PPO and Dental Practice TransitionsOne has to consider many factors when purchasing a practice and now PPO participation has to be taken into account. This becomes even more important when you’re dealing with practice mergers. It is increasingly common to see exiting practices not sold outright but sold to and blended with another practice. I have worked with many of my clients through this merger process and have described below some scenarios to illustrate the high stakes involved.

Example: A practice purchases another practice that’s participating in a large PPO that the purchasing practice isn’t. Does the buyer join that PPO for the sake of having a smoother transition?

Continuing with this example, let’s say you’re a Delta Premier provider. In many parts of the country, patients with Delta Dental insurance have the option of going to a Delta Premier provider and getting that level of benefits or going to a Delta PPO provider where they have the incentive of even further reduced co-payments.

If you are a Delta Premier Provider (the “Regular Delta” – not with Delta PPO) and you buy a practice that’s with Delta PPO, those patients will experience a transition as they blend into your practice. This has to be handled tactfully or the patients whom you are assuming the care of will bounce out of the practice. On the other hand, if you join Delta PPO and have a lot of regular Delta Premier patients, you will experience steeper discounts on patients you already have. This can be terrifically expensive, even more expensive than the actual practice purchase in some cases.

Even worse is going into the situation without knowing what PPOs in which each practice participates. Sometimes the owners of a practice don’t even know for which plans they are providers. This is particularly true with PPO networks like Dentemax, Connection, DHA and others that include multiple insurance companies. For example, you may be contracted directly with MetLife or you might be indirectly contracted through one of these PPO network groups.

If you’re purchasing a practice that has a lot more PPO participation than you do, you and your staff have to be ready to take these patients through transition (much as if you were leaving a PPO). However, this is more delicate because you don’t have patient loyalty working for you (yet). On the other hand, when you purchase another practice, you’re “topping off” yours, and it puts you in a better position to dump PPOs and take some patient loss. As you can see, all this can be quite complex.

Another scenario: The practice you’re purchasing participates with the same PPOs. Okay, but you want to compare both practices’ PPO fee schedules. PPOs do pay different doctors differently! The practice you’re purchasing might be getting better reimbursements on the same PPO than you are (or vice versa). Obviously, you would want to negotiate with the PPO (if you’re going to participate) to ensure that you get the better fee schedule of the two for continued participation, even if you are bringing the selling doctor over.

If you’re not doing a merger but an outright practice purchase, it’s very important to get a specific list of all the PPOs the selling doctor is participating with and the fee schedules. Of course, you want to look at all practice write-offs too. Some practices don’t do a good job of itemizing the write-offs so it’s hard to track how many are due to the various PPOs.

Before purchasing a practice, you may want to call the relevant PPOs and negotiate the fee schedules in advance. If you’ve gone ahead and purchased a practice, you have an opportunity very early in the credentialing process to negotiate. PPOs tend to be a bit more willing to negotiate before you sign up.

A practice purchase can be a great way to go. It offers a much quicker start or move in your career than building from a scratch. There is less risk and more predictability.

Practice mergers can be the best deal in dentistry. If the conditions are right, practice mergers are THE very best way to build your practice. This typically consists of absorbing an older doctor’s practice into yours with, perhaps, the older doctor working in your practice for a while through the transition phase.

In conclusion, If you are buying a practice (outright or in a merger), the right “PPO Plays” can make many, many thousands of dollars difference to your bottom line. No smart buyer will overlook the PPO situation.

Bill Rossi is president of Advanced Practice Management. He and his associates are actively involved in the ongoing management of over 250 Upper Midwest dental offices. You may contact Bill at 952-921-3360 or through www.AdvancedPracticeManagement.com.

The Dental Dow Jones – 1st Quarter 2015

Off To A Good Start!

For the mature area practices sampled, practice production was up 6.1% and collections were up 6.7% compared to the first quarter of 2014. This is the most growth in these indices since 2004.

Patient flow was up 5.1% with new patients up over 10%. Again, the most significant jump in patient flow we’ve seen in years.

One quarter doesn’t a year make but this is certainly good news. It’s also nice to see that downtime in the Doctors’ schedules is down 11% and in the hygiene schedules down 6.5%.