Category Archives: Dental Practice Management

7 Steps To Boost Your Practice Profits While Reducing Managed Care (PPOs)

By Bill Rossi*

In last month’s article, Managed Care Update, we discussed strategies to minimize patient loss, and slow it down, when reducing managed care (PPO) participation. However, that’s not enough. Doctors need concrete plans to rebuild their practice in order to counteract the patient loss and add mightily to their bottom line. This requires developing a plan for seeing more patients (measured by total exams) and doing more for the patients you do see (measured by production per exam).

Seeing More Patients

An over-dependence on PPOs to keep your schedule full causes other parts of the practice to atrophy. It’s time to get your practice in shape!

While it isn’t easy to increase new patient numbers, it’s certainly possible with a little hard work. Here are the top strategies to make it happen, ranked in order of cost-effectiveness:

1. Increase Internal Marketing

Virtually every doctor recognizes that internal marketing is the most cost-effective way to build his practice. Yet fewer than 10% of doctors feel they do a “good job” in generating patient referrals. It’s time to get good at it! Doctors must become more comfortable in asking satisfied patients to refer their family members, friends, and colleagues to the practice. This should be done at appropriate times (when a new patient joins the practice, when a patient compliments you or your staff, and upon completion of major cases). To get comfortable, consider this simply as an invitation to join your practice. And, add: “Please don’t keep our practice a secret”!

Finally, the doctor should encourage staff members to refer new patients from their family, friends and colleagues. Be sure to establish a bonus program to reward their referrals.

2. Improve Practice Signage

One of the best ways to attract more new patients is through adding or increasing practice signage to improve visibility. Remember, signage is the silent salesperson, providing a 24/7 365 days a year image touting your practice. So, find out what legal restrictions (if any) your locality has on office signage and maximize your exposure with a well-lit sign.

I’ve seen patient numbers double simply through adding improved signage. So, get a sign up, so you don’t have to “sign up.”

3. Upgrade Your Practice Facility

Remodeling and/or implementing cosmetic upgrades to your office facility (new paint, carpet, wallpaper, etc.) is almost always a wise investment. Your practice will typically grow 10-15% through increased patient referrals, and improved case acceptance of upper-level procedures, providing a great return on investment.

That means a large, attractive internally-lit sign, along with an engaging “storefront.” Your visibility isn’t just a matter of the signage, it’s the whole presence of your office!

4. Improve Your Online Presence

Doctors should enhance their online presence by upgrading their practice website, adding video testimonials, and original photographs of actual cases. This will help improve search engine optimization (SEO) as well as attract new patients. Also, increase favorable patient reviews since our research indicates that having 10 or more favorable (five-star) Google reviews can add measurably to your new patient flow.

5. Practice Purchase/Merger

If dropping managed care reduces the practice to operating at 70% or less of capacity, the doctor should purchase a practice and merge it into his own. Through treating the additional patients in your existing space, the purchaser can often generate incremental profits of 60-70% on the added volume before debt service, since there are no additional fixed costs, and the incremental lab, supply and labor costs are usually minimal. Even after deducting debt service payments, most doctors can still generate a 50% profit margin on the added volume purchased, making this a “slam dunk” investment.

6. Boost Hygiene Department

Most of your patient flow comes from continuing care in the hygiene department. Many doctors feel they are already doing a good job with their continuing care system, but most aren’t. For best results, use a “continuing care checklist” in order to track these statistics on a monthly basis:

  • How many hygiene patients confirm their next appointment while in the office? Your “appoint ahead” percentage should be 75%+.
  • How many cards, texts, and emails went out to patients that are due and past due?
  • How many past due recall patients were actually scheduled?
  • Are the hygienists helping with calling and confirming patients?

Digital communication options such as Revenue WellLighthouse, etc. can be very helpful, but don’t stop sending postcards. And whatever you do, don’t stop using the phone!

For the typical general practice, it’s not hard to increase the number of hygiene recall visits by five or so per week; that’s 20 per month, which will represent a 10% or more increase in patient flow for the average practice. Call Bill Rossi at Advanced Practice Management (952.921.3360), for a complimentary 10-minute continuing care checkup.

7. Ramp Up External Marketing

Doctors heavily involved in managed care often boast they’re spending little, if any, money on marketing. They complain they can’t afford to, because of overhead concerns. In reality, these doctors are already spending tens of thousands of dollars on managed care fee adjustments monthly, which is actually just a “marketing expense.” These doctors are always better off spending more time, energy, effort, and money on marketing to boost their new patient flow, rather than simply standing by while managed care companies bite off a bigger part of their practice profits each year.

As a rough rule of thumb, it costs about $300 in marketing expenses for each new patient brought in. Direct-mail, pay-per-click, and online advertising do work, but doctors have to stay with them long enough to figure out what works best in their practice environment. $300 is cheap when you compare it to how much it costs for you to continue writing off 30%+ per year in PPO discounts. Too many general dentists end up working 2-3 months a year for free, due to PPO write-offs. It’s costing you big money, you’re just not writing a check for it!

Next month, we’ll discuss how doctors can increase production on the patients they already have, to offset patients lost when reducing managed care (PPO) participation.

5 More Ways To Boost Profits While Dropping Managed Care (PPO) Plans

By: Bill Rossi*

In last month’s article, 7 Steps To Boost Your Practice Profits While Reducing Managed Care (PPOs), we discussed seven strategies doctors could use to increase practice profits by seeing more patients, while reducing managed care participation. But don’t overlook your existing patients! In many cases you can also significantly increase your production from existing patients to help offset the loss of patients from managed care plans you drop, using these five methods:

  1. Invest in continuing education to expand procedure mix – Take some of the money that you have been losing to PPO write-offs on the terminated plans, and invest it in continuing education to help broaden your procedure mix. An increasing number of general dentists are placing implants and having good results. Likewise, many are providing anterior and bicuspid endodontic procedures with proper training. InvisalignClear Correct, and Six Month Smiles can also add to your procedure mix, given the proper case selection.
  2. Improve clinical calibration – Schedule a staff meeting for brainstorming to discuss what clinical conditions warrant recommending every type of treatment you deliver. Once each clinical staff member has given their thoughts, the doctor should finalize the list. Then develop concise written statements on what clinical conditions warrant every type of treatment that you provide, so that the entire team knows and understands what you feel is the best treatment for your patients.This will help focus your recommendations and eliminate ambiguous phrases like “We’ll watch this…” or “Someday you should.” The two most underused words in dentistry are “I RECOMMEND.” Use them! If you have clearly calibrated what’s best for your patients, be sure to tell them.
  3. Utilize the introral camera for each hygiene patient – A picture’s literally worth a thousand words in pointing out clinical problems and discussing potential treatment options that the doctor will likely recommend. The picture confirming these findings helps build trust with the patient, which will help increase your treatment acceptance rate. Have your hygienists start off by using the intraoral camera on the first patient each morning and afternoon and they are much more likely to use it all day.
  4. Track production per exam and follow up – All practices should track their exams and production per exam. If you implement these strategies, your production per exam will go up. But that’s not enough! One staff member should be appointed to follow up with patients that have not yet accepted needed treatment. It’s best to do this when the trail is fresh, no more than three weeks after it was recommended. “Dr. Smith asked me to call. We are concerned because we haven’t scheduled an appointment for your recommended care.” If needed, offer flexible payment options (discussed below) to make it easy to say “yes.”
  5. Offer flexible payment options – You have many patients who can afford to pay $150-$200 a month for needed treatment that can’t pay $1,000-$2,000 or more in cash right now to have it done. That’s why it’s important to offer monthly payment options, as long as it’s limited to automatic credit card charges. It’s easy – simply get the patient to sign the Patient Easy Pay Consent Form** allowing you to charge the patient’s card for the agreed-upon amount each month until payment is completed. You’ll see case acceptance rates soar, while bad debt is minimized, leading to increased practice profits.

* Bill Rossi is President of Advanced Practice Management. For more information on his practice management services, including PPO decisions, negotiations and transitions, contact him at 952.921.3360 or at

Boost Profits By Managing Your PPO Participation

More practices are participating in managed care plans these days, and a greater percentage of their production is coming from these plans. Moreover, PPO discounts are growing deeper and deeper. Despite these negative trends, you can dramatically improve profitability by properly managing PPO participation. Developing a managed care plan strategy can help you overcome fear and ignorance to limit patient loss, improve profits, and reduce stress.

Our recent reader survey (May 2017) revealed that 66% of practices are now participating in managed care plans (including Delta Dental), up substantially from 56% just 8 years earlier. Even more troubling, a greater percentage of production is coming from these discounted fee managed care plans (for doctors participating) than in the past. In fact, 35% of doctors reported that 40% or more of their production now comes from these discounted fee managed care plans.

Fortunately, you have more power than you think to reverse these disturbing trends, says Bill Rossi*, a leading practice management expert on PPO issues with over 35 years of experience. However, to make positive changes, you must overcome your ignorance and fear to develop a strategy for dealing with PPOs.

Tracking PPO Costs

Rossi says that doctors often contact him thinking they have an overhead problem when, in reality, they have a write-off (PPO) problem instead. That’s because most doctors are not aware of the true impact that managed care write-offs have on their practice profitability, since they’re not tracking the amount of these managed care adjustments (write-offs).

Rossi recommends curing this by charging out all production at full fee for each procedure, with the related production adjustment for the write-off amount required to get to the discounted fee allowed under the plan. As much as possible, the adjustment codes should track each major PPO plan in the office.

You can easily track total production and write-offs by each managed care plan using your practice management software. This allows you to clearly see how much PPO participation “costs” your practice in the form of write-offs.

After this analysis has been completed, you can then rank all of their managed care plans by their write-off percentage (total write-offs divided by production). This allows you to develop a plan to reduce, or eliminate, PPO plans until you have the right “balance” of PPO participation. When selecting the order of PPOs to eliminate, Rossi says you should consider the PPO’s fee level, number of patients in the plan, difficulties with insurance processing, as well as the out-of-network benefits available.

This production adjustment (write-off) information should be reviewed monthly, since in many cases, these write-offs represent the largest “expense” to your practice.

Overcoming Fear of Making Changes

Rossi says that, contrary to public opinion, some PPO fees can be negotiated. If you haven’t tried, there’s a good chance you’ve left money on the table, he says. It costs very little to do this, and the extra dollars are “free” money, so don’t overlook this step.

Rossi says that too often doctors sign up for a PPO plan too quickly, and then drop it too rashly. He urges you to make your decisions logically, since there are many thousands of dollars and many patients at stake.

Doctors with otherwise healthy practices can peel back their PPO participation, but they need a well-thought-out coordinated game plan for doing so. In other words, you must take measures to fortify your practice and build it up in the face of the inevitable patient attrition that may occur. Done correctly, you can keep the vast majority of these patients and lose all, or most, of the discounts.

If you drop PPO participation, don’t send a letter announcing it to the affected patients, unless the PPO is sending one. Rather, discuss this with each patient at their next visit. If your staff is properly trained, you can retain the vast majority of PPO patients, unless they have little, if any, out-of-network benefits, and delay the impact from those that do leave. Employers provide dental insurance to make their employees happy, says Rossi. Of course they want to save money, but their employees aren’t happy if they can’t see the doctor they want. Accordingly, most insurance companies do not have punitive out-of-network benefits. In fact, often the out-of-network benefits are surprisingly good.

He further reminds doctors that most likely they are already seeing some patients out of network. For every PPO plan, there are providers both in and out of the network in your area. No insurance network, not even Delta, has 100% of providers in a given area.

Rossi has helped hundreds of dental practices reduce, or eliminate, PPO participation while increasing profits. He cautions that the practice needs to have a healthy patient base to successfully go through these transitions. He says doctors tend to be compulsive about being busy. Ironically, the doctors in the best position to decrease PPO participation are the ones who are least temperamentally inclined to do so. His best results have come with doctors producing over $100,000 a month who are collecting less than 80% of their practice production.

He flew into 3 practices recently to perform a PPO “exorcism,” with astounding results. In each case, practice production actually went up, not down, after dropping PPO participation. More importantly, collections rose even more significantly, as managed care discounts were eliminated. In fact, these practices saw collections increase an average of over $157,000 annually, virtually all of which went to the bottom line as increased profit. Rossi says that properly managing PPO participation can often add 4–10 percentage points to your collections percentage and profit margin, making it one of the fastest, and most effective ways to fatten your bottom line!

* For more information on his firm’s managed care consulting and other practice management services, contact Rossi at 952.921.3360, online at

How You Can Make Practice PPO Decisions Profitably

By: Bill Rossi*

Managed care (PPO) participation and related discounts are rising substantially every year. And decisions to join or drop a PPO can impact annual practice profits by $100,000 or more! So avoid acting (or reacting) too quickly based on emotions. Rather, analyze the situation based on the facts and get any help you need, before making these critical decisions.

Two successful practices in separate upper Midwest towns had similar demographics, and both faced the same dilemma. The hospital systems in their area had decided to provide their employees with dental coverage under a new PPO.

Impact of PPO Sign Up

The PPO kicked in beginning January of 2015. Before that, both practices were peppered with questions from patients about whether or not the practice would be joining. Each practice had desirable patients (physicians, nurses, other hospital employees, etc.) on the plans, and naturally were nervous about potentially losing them. However, both practices also had many patients that they were already seeing out of network on this same PPO plan. Each practice ended up making a different decision, resulting in dramatic differences in their bottom-line profitability.

The first practice immediately signed up for the new PPO and saw their write-offs dramatically increase. Their collection percentage (total dollars collected divided by total practice production) declined from 93% to 86% in 2015. So even though they produced $20,000 more per month during 2015, they actually collected $8,000 a month less! Over a year’s time, that was almost $100,000 in reduced collections. Moreover, since the cost of treating these patients remained the same, this resulted in a drop in profitability in the same amount (almost $100,000)!

Practice #1 (Joined PPO)
Monthly Amount Jan-Dec 2014 Jan-Dec 2015 Jan-Dec 2016
Production $355,170 $376,586 $395,180
Collections $330,131 $322,787 $360,488
Collections % 93% 86% 91%

The reason for the dramatic drop they experienced was the increased discounts on patients they already had! This was “collateral damage” they never anticipated. I advised them to drop the PPO, which they did by the fall of 2015. Fortunately, by 2016, their collection percentage had recovered to 91%. If they had not taken this action, and remained in the PPO collecting 86%, they would have collected $20,000 a month less beginning in 2016, with a related drop in profitability of over $240,000 annually. As you can see, the practice continued to grow, even after going out of network with the PPO.

The second practice took my advice to “wait and see.” They knew that the option to sign up with the PPO would still be there later on. They also knew that if they signed up immediately they were guaranteed to suffer huge write-offs on their existing patients already on the plan. And since they were seeing plenty of these patients out of network already, they thought the same may be true for the hospital employees.

Practice #2 (Didn’t join PPO)
Monthly Amount Jan-Dec 2014 Jan-Dec 2015 Jan-Dec 2016
Production $172,651 $188,106 $199,356
Collections $160,277 $170,977 $181,538
Collections % 93% 91% 91%

As you can see, this practice maintained a collection percentage of over 90%. The practice continued to grow, and they probably saved over $100,000 in practice profits in 2016 and beyond by not jumping on the PPO bandwagon too quickly.

You see, insurance companies have a “chicken or egg” problem. They need providers to get businesses to sign up; yet they need businesses to sign up in order to get providers. Unfortunately, dentists are often too quick to sign up for fear of losing patients. That’s understandable, since no doctor likes to lose patients.

However, the insurance companies are taking advantage of this fear and that is why there is a race to the bottom with PPO fees actually declining. In effect, the higher-paying insurance company and noninsurance patients are subsidizing the ones that are costing you the most in write-offs.

The Moral of the Story

When it comes to making PPO decisions, it’s often better to be reactive than proactive. If a new PPO is coming to your area, or if a large employer in your area converts to a PPO, don’t immediately sign up due to the loss, (or fear of loss), of a few patient families.

Rather, take time to check things out. What are the out of network benefits of this particular employer’s plan? What percentage of patients do you already see out of network on this plan? What is the general momentum of the rest of your practice?

If you’re not sure what to do, ask for help. Investing a few thousand dollars in consulting advice may save your practice hundreds of thousands of dollars in lost profits from a poor decision.

* For more information on his firm’s managed care consulting and other practice management services, contact Rossi at 952.921.3360 or online at

3 Steps To Increase Profits By Reducing PPO Participation

Most doctors aren’t aware of the true impact that PPO write-offs can have on their profitability, since they don’t track them. Fortunately, a growing number of doctors are following our advice to track this data, analyze its impact, and take proactive steps to reduce PPO exposure, resulting in higher profits. Here’s how to make it happen in your practice.

Track the Adjustments

Do you manage your patient care without first taking records? Of course not. So neither should you manage your practice finances without taking records, in the form of your managed care exposure. This year’s readers’ survey revealed that while 34% of practices had no managed care participation, the remaining 66% did. Unfortunately, most of the practices in that 66% aren’t aware of the true impact that PPO write-offs have on their profitability, since they aren’t tracking the amount of their managed care adjustments (write-offs).

We recommend your practice charge out all production at the full (regular) fee for each procedure, regardless of the negotiated fee under the managed care (PPO) plan. Your practice management software should then be able  to calculate the related production adjustment (or write-off amount) necessary to arrive at your net production based on the discounted fee allowed under the plan.

On a monthly basis, you should review the total production, write-offs, and collections by each managed care plan. This allows you to clearly see how much PPO participation is costing your practice, since in many cases it represents the largest “overhead expense” in your practice.

Analyze the Impact

The next step is to calculate the write-off percentage for each plan, by dividing the total adjustments (write-offs) by the total production for related plan. You can then rank all PPO plans by their write-off percentage, from the lowest, to the highest, as shown in the following chart. This allows you to develop a plan to reduce, or eliminate, the PPO plans with the highest write-off percentages, until you have the right balance of PPO participation. When selecting the PPOs to eliminate, you should consider not only the fee adjustments, but also the number of patients in the plan, difficulties with insurance processing, as well as the out-of-network benefits available.

Production Adjustment Adj. % Priority
Delta $400,000 $60,000 15% 3
Cigna $125,000 $37,500 30% 2
Aetna $75,000 $30,000 40% 1
TOTAL $600,000 $127,500 21%

Take Action

While this data and related analysis is helpful, it won’t add a cent to your bottom line unless you take action. Our survey revealed that 12% of your colleagues ACTED last year to reduce their PPO exposure and were rewarded with higher profits. Will you join them?

The good news is that you have more power than you think. Contrary to public opinion, some PPO fees can be negotiated. If you haven’t tried, there’s a good chance you’re leaving money on the table. It costs nothing to ask, and the extra dollars you receive are “free money,” so don’t overlook this important first step. Remember, just like asking a date to the senior prom, the worst response you’ll hear is “no.”

Most practices CAN reduce their PPO participation, but they need a well-thought-out, coordinated gameplan for doing so. First, you need to develop a plan to limit patient attrition for PPO plans that you plan to go out-of-network with. Don’t send a letter announcing your decision to the affected patients unless the PPO is sending one. Rather, discuss this with each patient at their next visit.

If your staff is properly trained, you can retain the vast majority of PPO patients, and delay the impact from those who do leave. Most insurance companies have surprisingly good out-of-network benefits, since they want to keep their employees happy and able to see the doctor of their choice.

Next, while patient attrition can be limited, and even delayed, you’ll still have some. So it’s imperative to develop a gameplan to replace the net collections lost.*

Once your plan is complete, it’s time to “pull the trigger.” Will you do it? Don’t feel bad, because most doctors won’t. If you’re not ready to go it alone, ask for professional help to get the job done.

Practice management expert Bill  Rossi**  has  helped hundreds of dental practices across the country reduce or eliminate PPO participation in order to improve profitability. He has performed numerous PPO “exorcisms” and specializes in training staff and coaching the doctor to make sure the decisions that need to be made, are made. Since reducing PPO participation can add 4-10 percenta

How To Increase Profits By Playing It Smart With Delta

Reducing managed care (PPO) fee discounts is one of doctors’ biggest management concerns. Since Delta Dental has the largest dental network by far, your practice’s status with them is critical. Below, practice management expert Bill Rossi* outlines how you can potentially add thousands in increased profits by making the right moves.

Over 85% of general dentists participate with Delta Premier, which is still Delta Dental’s largest network. Over half of the dentists in the United States are also with the Delta PPO. They are “Premier/PPO Providers,” and the fee allowances paid to these dentists default to the lower PPO rate.

If you are a Delta Premier/PPO provider, you need to seriously evaluate your situation. You may be able to gain tens of thousands of dollars per year by dropping your Delta PPO participation and becoming a “Regular” Delta Premier Provider.

Most of your Delta PPO patients will still have the same benefit set (100% coverage on preventative, 80% restorative, 50% major, etc.) because their plan will default to the “Premier” level of benefits. Making this change means you can collect 10%-20% more for treating the same patients.

For example, in our area the average fee for a D2740 crown is about $1,300, while the Delta Premier Provider fee allowance is $967. The Delta PPO reimburses providers for the same crown at a fee of only $864, over $100 less!

While there’s approximately a 25%-35% fee discount for “Regular” Delta Premier, the discount for Delta PPO is in the 35%-45% range. Our experience is that the additional PPO discounts don’t translate into proportionately more patients attracted or retained.

Most doctors assume Delta is phasing out its Premier program and, therefore, its providers. That’s true in some areas, but in many states it isn’t over yet! It’s been our experience that transitioning from Delta PPO to Delta Premier is a relatively smooth process and can add tens of thousands of dollars per year to your bottom line. So make the switch while you can!

You may not be clear on your Delta status or options, so take the following steps now:

  1. Contact Delta Provider Relations to confirm your Delta status. If you’re only with “Delta Premier” that’s good. If you’re participating with Delta at all, that’s where you want to be.
  2. Are you both Delta Premier and PPO? Then you likely can add substantially to your bottom line by switching to Premier only, as described above.
  3. Compare the PPO to Premier benefit sets for the largest employers in your area. You’ll find that in most cases, the benefit sets are the same. However, in some cases, the PPO to Premier benefits vary (for example, from 100% to 80% coverage on preventative).Some PPO plans have no Premier benefits. You’ll likely lose those patients. However, many times patients have the option to upgrade their Delta plan so they can go to the “dentist of their choice” – you! Or, they have the option to choose other dental insurance through their employer which offers better coverage in your office.

PPO decisions should only be made in the context of your particular practice situation. In any PPO transition, there will be some loss of patients. So prepare yourself psychologically for this loss in advance. However, if you handle it correctly, the loss will usually be far less than you fear.

It’s interesting that when we make a consulting visit to an office participating with Delta Premier, they usually have plenty of Delta patients, even when they are surrounded by other practices that participate with the Delta PPO. Many doctors are unaware that their patients have incentives to go to a Premier/PPO office.

This confirms that once you’ve made the transition to a regular Delta Premier Provider, it’s pretty easy. While the transition may seem scary, it won’t be if you plan for it properly.

For more information on managing PPO participation and other practice management services, contact Rossi at 952.921.3360, or online at Advanced Practice Management.

“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.

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

Collections Made Comfortable Seminar

Presented by: Shelly Ryan
Friday, November 3, 9:00 am to 1:00 pm
Embassy Suites Bloomington, MN
Fee: $219 First person, $199 each additional

Everyone on Your Team Has to Deal With Patients, Money andInsurance. Make Sure They Know How!

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.

This seminar is almost always a sellout. $219 first person and $199 each additional. $20 discount per attendee if registered by September 15th.

CALL TODAY (952-921-3360) to reserve your space before we do our general mailing.