The Dentist's Network #68


	Integrating An Associate Merging Practices Practice Stimulus Package

Thomas L. Snyder, DMD, MBA
Managing Partner
The Snyder Group, LLC
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Integrating Your First Associate

For some of you, 2009 will be the year for you to recruit an associate either on a full-time or part-time basis. When we discussed the tell-tale signs of saturation in prior columns, we emphasized the importance of adequate numbers of patients and a full schedule several months in advance. If you have met these criteria and are ready to start recruiting, here are a few tips to consider getting ready for your first associate.

1. Determine the number of patients to be assigned to the associate. If you are working full time, approximately 1,500 to 1,700 active patients are probably keeping you busy. Since those who are ready to recruit have an excess of patients above these numbers, we suggest that you first generate a master patient list. Now select between 1,500 to 1,700 patients to be considered as your primary patients. Next, take the difference between that master list and the selected group of patients and calculate the number of patients to be transferred to the new associate. We have found that an associate can accommodate between 200 to 250 patients per associate day. For example, let us assume you have 2,300 active patients. If you have identified your 1,700 primary patients, that leaves a balance of 600 to be assigned to your associate. In this instance, that equates to a 2 to 3 days per week associate schedule. In this example, you would recruit for a part-time associate. However, if you plan to reduce your schedule when the associate is hired, you would reduce the size of your primary patient base and transfer more patients to the associate, thus adding perhaps another day per week.

2. Staffing Requirements. We recommend that you assign your best dental assistant to your new associate so that he/she “learns the ropes” of your practice. This assistant, if employed for a while, may be familiar with many of the associate’s assigned patients, and that can serve as a bridge in patient introduction. Your top assistant is also best qualified to judge the new doctor’s patient communication and clinical management skills. We suggest that this assignment be maintained for the first one to three months, based on the skill and experience of your candidate.

3. Reactivation Hygiene. Saturated practices often experience retention problems. As a result, there may be many patients who have fallen out of their normal recall cycle. This offers an ideal opportunity for your associate to provide the hygiene reactivation appointment, which is an excellent way for the new doctor to meet his/her “new” patient. It also provides a better opportunity for casual conversation between the doctor and the patient. If any treatment is needed, the associate can complete it. The next hygiene appointment would be scheduled with a hygienist.

4. Scheduling Templates. Make sure you develop the associate’s time units for procedures that are commensurate with his/her level of skill and expertise. There is nothing worse than having a reception room full of patients waiting to see their new doctor because proper time management has not been factored into the equation! Also, set realistic production goals based on the anticipated service mix of your new doctor. We typically set production goals of $800 up to $1,750 per day, based again on the associate’s skill and experience. The template would include a certain number of daily reactivation appointments until that task is completed.

5. Develop a Marketing Plan. Make sure you tell your associate that although you may have a busy practice; expectations are that he/she will recruit new patients as well. To assist him/her in this effort, make sure that you:

print business cards
change the signage on your building (if feasible and cost effective)
modify your brochure to include the associate’s name, picture and bio
edit your Web page
write a feature in your next newsletter about your new associate to include professional qualifications and experience as well as personal information
run an ad in the local newspaper if you employ external marketing strategies.

We recommend that full-scale marketing efforts be made after the new associate’s probationary period, which usually runs 90 days. In the interim, staff can promote the new associate when scheduling a patient for reactivation hygiene or new patient or emergency visits

6. Communication. We recommend weekly meetings to discuss clinical and patient management matters. Do this routinely for the first three to six months (based on need). Additionally, a monthly meeting should be scheduled to review production and collection reports and discuss other staff or business management issues.

7. Mentoring and Over-the-Shoulder Training. Based on your practice’s clinical philosophy, it’s appropriate for young doctors to participate in some “over-the-shoulder” observations. This is especially true when you’re performing more involved clinical procedures, and also when it’s obvious that your associate has never performed these procedures.

If you take the steps listed above, chances are you can have a very successful associate relationship and one that can only enhance your practice transition plans.

Dr. Thomas L. Snyder is Managing Partner of The Snyder Group, LLC, a nationwide practice transition and financial management consulting firm. With more than 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 be reached directly at 1.800.988.5674.

If you would like additional help, email Dr. Snyder at drsnyder@thedentistsnetwork.net.

Interested in having Dr. Snyder speak to your dental society or study club? Click here.

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Michael Moore, Esq.
Director McKenzie
HR Solutions
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Merging The New And The Old (Part 2)

In Part 1 of this piece, we introduced a doctor who bought a practice only to find that the seller, the seller’s associate and the old staff began sabotaging the practice within just a couple months of closing.

The doctor came to VisionHR after she had terminated the seller/provider, the associate and several key staff because she had realized—soon after terminating the seller—that there was no way to manage the human relations aspects of the situation without documented policies. The seller had never had a written office policy, but had used his personality to keep things together. He had a front desk leader and an assistant who had been with him over twenty-five years. He also had very loyal patients. But his business operations were extremely inefficient and he was losing substantial revenue, though he was highly productive himself.

When doctors buy practices, the one thing that is never looked at by transition specialists is the state of the HR policies. In most cases, there are none, or the office manual is buried in a desk somewhere. Often when a dental practice is purchased it includes all of the potential employee issues that are waiting to explode on you.

If you are considering buying a practice now or in the future, you must consider the HR situation as a key element of your due diligence. Had my client been aware of this need, she could have mitigated substantially the negative effects from the old staff. Major warning signs to look for in a practice are (1) long-term employees [more than six or eight years] in key positions, (2) a patient base loyal to the doctor, not the office, and (3) the presence or absence of an up-to-date HR policy that has been communicated to every employee.

Remember, associate doctors—whether classified as employees or independent contractors—must be covered by the HR policies. You must have control over their actions that goes beyond the confines of the provider agreement. They must be subject to the corrective actions procedures. The provider agreement will usually state that the provider may only be terminated with cause.

In the case of my client buyer, she had no guidance and, consequently, when the associate sued, she had no documentary base from which to both defend and to sue him to remedy his violations of her rights.

Long-term employees are the most challenging aspect of the buyer’s creation of a core of employees who will continue to grow the practice. Particularly in the absence of clear HR policies, they will have fixed ideas about how the practice should be run (based on the seller’s past practices) and, without education and indoctrination, will become the major obstacles to the buyer’s success. Furthermore, if the seller’s spouse has had substantial involvement in the practice, the buyer must be satisfied that he/she will not become a source of disquiet if the buyer keeps the seller on for any period as a provider.

I say that you want to make the patients loyal to the practice, not a particular provider. I know that this flies in the face of common wisdom. But, if the patients are loyal to the practice because the entire staff cultivates trust and friendship, the change of an associate, or even the sale of the practice itself, will not impact the patient base. You must find out what the policies are and read them. Learn how long each employee has been with the practice, and ask the doctor about specific personalities of each. If possible, obtain the seller’s agreement for you to interview the staff individually. Find out the spouse’s involvement. If you decide to buy, you must include in the purchase agreement a specific provision requiring the seller to cooperate with you completely in re-educating the staff. There must be a clear process that you undertake to make sure the staff’s “goodwill” is transferred as well to you. We strongly recommend that if the HR policies are deficient or non-existent, you immediately implement a complete policy upon taking over the practice. It is recommended that the seller be obligated to institute the policy before you take over the practice as part of the sale agreement. We can develop the customized policies, and have them in place for you at the time you take over.

Take the time to sit down with the staff—and associates—and go over the HR policies. Make sure the policy has a written “employee concerns” provision that encourages staff to report complaints or concerns they have.

Importantly, address specifics of the transition with the staff and associates. In the beginning, the seller did not make clear exactly what his relationship was with the buyer. Some staff did not know that all management decisions now were in the hands of the buyer. This increased the awkwardness of the operations. If the seller is remaining for any period of time, he or she must be part of a meeting which outlines the changes, and must be fully supportive to the staff.

Doctors are quick to seek practice management support when they go into a transition, and for good reason. You should seek the same kind of support to deal with the internal HR challenges that will inevitably following the purchase.

Mike Moore is ranked among the best in employment law and has been named one of the top 10 lawyers in Ohio. As Director of McKenzie's HR Solutions, Mike is the creator of the Employment Policy and Handbook, geared to providing dentists who are unsophisticated in the legal arena with a step-by-step policy manual.

Click here to hear Mike present “7 Elements of an Effective Employment Policy.” Email Mike at mike@thedentistsnetwork.net.

Interested in having Mike speak to your dental society or study club? Click here.

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Sally McKenzie, CEO
McKenzie Management
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Create Your Own Stimulus Package

To date, I’ve heard nothing about a stimulus package for dental practices, so it’s incumbent upon you to create your own. One of the best places to start is plugging the leaks in your revenue stream, leaks that can cause serious financial trouble seemingly overnight. In actuality, it takes about four months for a practice to spiral into serious financial disarray. Certainly, the average practice isn’t necessarily teetering on the brink of financial disaster; however, it is likely losing some $2,000–$3,000 per month in practice revenue. The culprit? Lack of attention to key systems, specifically those dealing with money.

For starters, make sure you’re paying closer attention to the dentistry you collect on than the dentistry you produce. Not that the latter isn’t very important, but it is still quite common for dentists measure their financial success by the amount of dentistry they produce—$500,000, $800,000, $1.5 million, etc. But it’s not the production that pays the bills.

Speaking of collections, given the state of the economy, some dentists may feel pressured to abandon or ease their financial policies. You don’t have to be rigid—options are critical—but you also don’t want to set a precedent that you’ll be paying for (literally and figuratively) for multiple economic upturns and downturns to come.

Take a look at your receivables. You should know this by now, but by way of reminder, your accounts receivables should be no more than one month of what the practice produces. In other words, if production is $80,000 per month, there should be no more than $80,000 owed to the practice. You should also see a 98% collection ratio every month—that’s 98 cents on every dollar. If the office is collecting assignment of benefits from insurance companies, the front desk should be collecting from patients 45% of the monies that were produced that day. If the dentist is not accepting assignment of benefits then the dentist should expect the front desk to be collecting in the high 90s over the counter because it is almost a cash practice.

Getting back to revenue losses, have you checked your audit trail lately? In other words, do you have a system in place to catch and correct costly mistakes? No matter how good your business employee may be, she/he makes mistakes. Look at key reports daily. In particular, examine the day sheet and the deposit. Print and review an audit trail report daily. It reflects every transaction that has transpired in the office since the last printed audit trail. Perhaps you performed a $900 procedure yesterday and the patient’s credit card was accidentally charged only $90. It happens.

It happens because people are human. HOWEVER, for far too many practices, money is lost because business employees are grossly undertrained. Combine the lack of training with the fact that many of these employees are lone rangers who must multi-task at a frenetic pace and it’s no wonder individual practices are losing thousands every year. These are the people who hold your financial solvency in their hands. Make sure they are thoroughly trained to handle this major responsibility.

Next, inventory your patient complaints. If you are getting calls from people who are angry because they don’t understand how the practice arrived at a particular balance, that’s a good indication that there are system shortfalls.

Information is the key to avoiding serious problems with patients when it comes to charging for treatment. About 75% of complaints against dentists involve money—not that the fee was too high, but that there was a misunderstanding about the fee. When the data in the computer system does not leave an audit trail these misunderstandings can turn into major problems for the dentist.

Make sure there are no surprises and patients are fully informed before a procedure is performed and the information is documented in the system. The patient should be very clear on the specifics of their clinical condition and what needs to be done as well as why it needs to be done. This is not only good patient relations, it is critical in curbing cancellations and no-shows.

Take a close look at your own financial systems and perhaps you can award yourself a million dollar bonus next year, and you will have done so without any help from the government.

Sally McKenzie is CEO of McKenzie Management, a nationwide dental management, practice development and educational consulting firm. Working on-site with dentists since 1980, McKenzie Management provides knowledge, guidance and personalized solutions that have propelled thousands of general and specialty practices to realize their potential.

Interested in speaking to Sally about your practice concerns? Email her at sally@thedentistsnetwork.net or call 1.877.777.6151.

Interested in having Sally speak to your dental society or study club? Click here.

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