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11.25.05 Issue #194  
   
Planning For Your First Associate


Tom Snyder, DMD, MBA

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Like all business decisions, the choice to recruit your first associate requires thoughtful planning and consideration of factors that will affect your personal and professional financial success.  Here are several important steps that should be taken to ensure the associateship benefits the 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. 

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 seventy percent (70%) of these inactive patients can provide a new associate with a base of 280 to 700 patients.

3. Determine Part-time vs. Full-time Feasibility

It’s unrealistic for many practitioners, especially in an urban setting, to need a full-time associate since the dentist to population ratio is usually lower and most patient bases are smaller.  A “rule of thumb” is for every 200 to 250 active patients, you will require one full day per week per year 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 $800 to $1,500 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.  Nationwide, compensation range varies from 30 to 35% of collections.  It’s all about supply and demand as to what percentage prevails in your locale.

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 do must develop a comprehensive plan for the transition. If a transition is the objective, Practice Valuation should be completed within the first twelve months of employment to establish a baseline value.  Terms of the buy-in or buy-out should also be fully disclosed.  With adequate forethought, successful associateships can produce great rewards for both you, and your associate, as your practice matures and grows.

Dr. Snyder is a noted lecturer and author.  He is managing partner of The Snyder Group, LLC, a transition and financial management consulting services firm located in Marlton, New Jersey.  Dr. Snyder has assisted dentists throughout the United States in developing long range plans as well as designing associate and partner relationships.  He is a member of the Editorial Advisory Board of Dental Practice Report. Dr. Snyder can be reached at 800-988-5674  www.snydergroup.net.

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