Monthly Archives: February 2018

“Collections Made Comfortable” Seminar is Friday, Nov. 2

Presented by: Shelly Ryan
Friday, November 2, 9:00 am to 1:00 pm
Embassy Suites Bloomington, MN
Fee: $219 First person, $199 each additional

This perennial favorite is a must-attend for you and your team. Dealing with patients, money and insurance is something you have to do every day so why not do it well? And, it takes the whole team!

Take the confusion out of dental fees and insurance so your patients follow through on treatment and your schedule stays full.

Register by May 15th and receive $30 off per attendee! This seminar is almost always a sellout. As clients, you get first dibs and a discount! $189 first person and $169 each additional.

What’s The Plan, Stan? Do you have written goals for 2018?

I define Management as “The process by which you set and reach goals.” If you haven’t already done so, ask our help in establishing goals and a strategy for 2018. We find that the clients who take this seriously and have written goals, consistently do better. Think about it…you’re much more likely to do better if you have a plan to grow, than just a wish to grow!

Many of our clients have found the outline on the back page helpful. Take 5-10 minutes now to greatly increase your chance of success this year.

Delta Wisconsin Acts Up (Then Settles Down)

Our Wisconsin clients got quite a shock with their new Delta contracts for 2018. In these, there were provisions that would limit Doctors to referring to only specialists in the Delta network and would allow Delta to lease their provider list of the carriers. (So, you might sign-up for Delta, and then find you’re with a bunch of other PPO’s.)

Most disturbing was their insistence that Doctors send them fee schedules of other PPO’s that they participate with and agree to accept from Delta the lowest fee allowance they get from other PPO’s. This could have been a huge problem for dentists. I don’t think Delta could enforce it. Most Doctors that sign a PPO contract are required to keep the fee schedule confidential. So, the Delta contract, in effect ,asked Dentists to violate other contracts. I would think that other PPO’s such as MetLife, Guardian, etc., would have something to say about that.

Anyway, apparently the Wisconsin Dental Association rode to the rescue. All those clauses were taken away. “Back to normal”, for now. Good to see, but I always wonder when the next shoe will drop.

Timing Your Practice Transition? Look to Your Lease!

In order to get the best practice price, you want to be attractive to as many buyers as possible. In our market nowadays, practices are almost as likely to be sold to an existing practice (a practice merger) as they are to be sold directly to a practitioner who will take over the practice. Naturally, buyers want options. The ideal timing is that your lease is renewable, assignable and up in the year of your transition. This gives the buyer a choice of negotiating a new lease with the landlord or moving/merging your practice.

We’ve seen situations where Doctors signed a 10-year lease in a professional building where new patient traffic is almost always low. Potential buyers don’t want to spend the next decade in a low visibility situation, no matter how attractive the decor and equipment.

Many Doctors start thinking about transitions five years in advance of their likely retirement date. If your practice is large enough to bring on an associate(s), you’ve got a built-in buyer who you can presumably sell to and work for, for a while. This sort of tapered retirement is desirable to many. If your practice isn’t large enough for that, the lease timing is more critical.

Renewing Your Lease

Leases and lease renewals are not
typically conducted on a level playing
field. By planning ahead and having
professional representation, it is possible to negotiate a
lower lease rate and receive a substantial tenant
improvement allowance and free rent.
How does the lease renewal process work?
Renewal options include terms for specific lease rates,
concessions such as free rent and tenant improvement
allowance, and whether a new base year for operating
expenses will be granted. Whether or not a renewal
clause exists in the original lease, all of these terms
are negotiable and play a large role in the financial
structure of a lease renewal.
When should the process begin?
As a rule of thumb, you should begin to consider
the renewal process 12 – 18 months in advance of
your lease’s expiration. Landlords view this as an
opportunity to push rents higher as the window of
opportunity to relocate closes. If tenants hold over
(stay in the space after the lease expires), they often
see penalties of 150% – 200% of their last month’s
rent and can also incur damages if they holdover
without permission. The bottom line is that if there is
not ample time to relocate, if necessary, the landlord
has too strong an advantage.
What type of cost savings can be achieved through
a successful renewal?
If properly negotiated, you can achieve significant rent
savings, a build-out allowance, free rent and other
concessions. It is very common to start a lease renewal
term at a lower lease rate than what you are currently
Below are actual examples of recent lease renewals for
dental practices located in the Midwest. These cases
illustrate the importance of properly negotiating your

Case #1
Landlord “Best Offer” Final Terms
Starting Lease Rate (Per SF) $24.00 $18.00
Monthly Payment $4,000 $3,000
Other Landlord Concession Tenant option for early termination in
the event the practice is sold
Total Savings (5-year lease) $60,000

Takeaway: Many landlords see lease renewal as an
opportunity to aggressively raise rates. Good renewal
negotiation can drastically improve on what is claimed
to be their “best offer.” Additionally, certain lease
terms make it easier to sell your practice and can be
achieved during renewal.
Takeaway: Renewing your lease without properly
negotiating the terms could lead to overpaying by
hundreds of thousands of dollars.
Takeaway: Lease renewal negotiations are
multifaceted; significant savings can be achieved
through concessions other than lease rate.
Tyler Van Eps and Carr Healthcare Realty provide real estate services to
healthcare tenants and buyers. Tyler specializes in representing dental
practices. Telephone: 612-708-2631


Most incentives need to be “retuned” each year. They should be in line with practice goals and calculated so that it’s Win/Win. That is, staff share in the practice’s success and wage overhead is kept proportional to collections. Here are some important ground rules for any Incentive Program:

  1. All incentives are subject to change or discontinuation at any time based on the Doctor’s discretion.
  2. Incentives are meant to pull the team together, not apart. If they’re causing discord, they may be discontinued.
  3. Individual team members can be pulled off the incentive if, in the Doctor’s opinion, they are not appropriately contributing to the team effort.
  4. All incentives automatically cease at year-end subject to next year’s goals and strategies.*

The last one is most important, because otherwise there’s a real danger the staff will just take the incentives for granted. Incentives can lose their power to stimulate performance over a long period of time. They must be set to coincide with practice objectives.

We can help you set up or “retune” your incentives. Just call.

*Hygienists paid in some form on their productivity, are not really on incentive programs so much as a “compensation formula”. So those are not as readily subject to change or discontinuation, but you still must give yourself some leeway in doing so.

Dental Dow: Fourth Quarter 2017

For the year, practice production was up 6.1%. Collections were up 4.3%. Patient traffic increased 2.4%. New patients were up 2.7%. Crown and Bridge was up 9.4%. Production per patient examined was up 4.2%. All in all then, 2017 was the strongest growth year since the “Great Recession”.

Collection Increase Percentages

2009 2010 2011 2012 2013 2014 2015 2016 2017
0.4% 0.4% 1.6% 3.5% 2.2% 3.1% 4.8% 3.3% 4.3%

Production Increase Percentages

2009 2010 2011 2012 2013 2014 2015 2016 2017
0.5% 1.4% 2.5% 3.3% 3.3% 4.2% 6.0% 4.1% 6.1%