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Issue #4 - 10.10.06
Planning For Your First Associate
Like all business decisions, the choice to recruit your first associate requires thoughtful planning and consideration of those factors that may affect your personal and professional financial success. For some, recruiting an associate will provide more free time for you or increase the utilization of your practice’s resources without any long term commitment. For others, a qualified associate is the first step in long-term transition planning to develop a partnership or a short-term decision to facilitate a practice sale. No matter your motivation in hiring an associate, several important steps should be taken to ensure the associate relationship benefits your practice, your patients, and your bottom line.
1. Determine The True Size of Your Patient Base
An adequate patient base is a necessary component of all successful transitions. The number of active patients can help determine whether your practice can effectively support an associate. Busy practices show signs of “saturation,” a condition which offers opportunity to grow, by transferring the care of “excess” patients to the new associate, as the practice continues to expand. For a typical general practice, saturation equals 1,500 to 1,700 active patients. Active patients are defined as those who utilize a practice’s hygiene program at least once every twelve months. For practices which skew toward a higher proportion of aesthetic and complex restorative services, the saturation point is even less — roughly 1,200 to 1,400 active patients. Saturation is a key indicator of probable success in transitions, and provides insight into the appropriateness of a decision to hire an associate.
2. Conduct A Chart Audit
Conducting a chart audit is the only way to identify how many patients actively participate in your practice’s hygiene program. Once the chart audit is complete, you will know whether your patient base can support a full time or part-time associate. If you have 400 to 1,000 patients who have not been seen routinely in hygiene, reactivation efforts should pay a good dividend for your associate. Reactivating 70 percent of these patients for hygiene services would provide a new associate with a base of 280 to 700 patients, who may become his or her regular patients.
3. Determine Part-Time vs. Full-Time Feasibility
It’s unrealistic for many practitioners in an urban setting to require a full-time associate since the number of patients required maintaining an associate will be substantial. A “rule of thumb” is for every 200 to 250 active patients; you will require one full day per week for an associate to meet their needs.
4. Experience Pays
In many instances, “first-time” associates may not have sufficient clinical or private practice experience. To ensure a smooth transition, a structured probationary period of three to six months is appropriate. We suggest using a scheduling template to assure that your associate meets minimum production goals, during this time, initial production may vary between $900 to $1,300 per day, based upon the associate’s skill level. Additionally, this is a good time to begin an aggressive patient reactivation program and to schedule reactivated hygiene patients (two to four daily) with your new associate. Chances are likely that these “lost” patients will accept your new associate as their doctor and will continue with routine treatment. Subsequent hygiene appointments should be regularly scheduled with your hygienist(s).
5. Determining Fair Compensation
Although most associates are paid a percentage of collections, new associates should be placed on a mutually agreeable guaranteed salary for 90 to 120 days. This takes the financial pressure off your associate during the initial period and lets the young doctor focus on clinical skill enhancement and patient management. This time frame also allows the associate’s Accounts Receivable to build up since he/she will be paid on collections. Many General Practice associates in the are being paid 33 to 37 percent of collections minus a percentage of their lab bill.
6. Provide Opportunity To Learn And Grow
To seamlessly integrate your associate into your practice’s routine, we recommend new associates be assigned to the most experienced dental assistant during the initial months. This simple consideration provides new associates with ample opportunity to learn valuable efficiency tips and patient record keeping guidelines and procedures. Since an experienced assistant most likely will know reactivated patients, it promotes a good opportunity to acquaint the patient with the new doctor.
7. Have An Open Door Policy
With a new associate, communication is imperative. Regularly scheduled weekly meetings are a must to discuss patient and clinical matters. Monthly meetings are also needed to review practice statistics and to provide a new associate with better insight into his/her progress. These scheduled meetings, as well as having an open door policy for matters of concern, provide opportunity to review practice management issues together, and develop solutions as a team.
8. Develop A Transition Plan
Although some practitioners never contemplate selling an interest in their practice to their first associate, those who think otherwise must develop a comprehensive plan. If a practice transition is the objective, whether it may be a partnership or practice sale, a practice valuation should be completed within the first twelve months of employment to establish a base-line value. Terms of the buy-in or buy-out should also be fully disclosed. With adequate forethought, successful associate relationships can produce great rewards for both you, and your associate, as your practice matures and grows.
Dr. Thomas L. Snyder, is Managing Partner of The Snyder Group, LLC, a nationwide practice transition and financial management consulting firm. With over 75 years of experience in the field, The Snyder Group can provide you a full range of services relating to practice transition matters and retirement planning. They can also be reached directly at 800.988.5674.
If you would like additional help regarding implementing an associate into your practice, email Dr. Snyder at Drsnyder@thedentistsnetwork.net.
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