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Articles

The Professional Advisory

  1. Is it Time to Move?
  2. Staging A Dental Practice
  3. The High Cost of Dying
  4. Deal-Busters
  5. Patients - Attract and Retain
  6. Should I Stay or Should I Go?
  7. Is There a Buyer for Every Practice?
  8. Good, Better, Best - The Market has Spoken
  9. Smooth-Sale-ing
  10. Buying Time
  11. Patients, Patience, Patients
  12. A Real Patient
  13. Why Do a Practice Valuation? I'm not Selling
  14. Irrational Exuberance or The New Normal?
  15. Do dental equipment and dental technology affect a practice value?
  16. Finding and Being a Mentor
  17. Bigger is Better
  18. Daves Top Ten List for Buyers (Vendors should read this too!)
  19. How Well Do You Know Your Practice?
  20. Dave
  21. What will happen to dental practice Values in the next 10 years?
  22. Your Premises Lease is an Important Asset
  23. What are Associates Thinking?
  24. There is Life Outside the GTA
  25. When Is the Right Time to Sell My Dental Practice?
  26. Mergers are a Viable Option
  27. Is Your Associate an Asset or a Liability?
  28. Has your Practice Facility Kept Up With Your Billings?
  29. The 100 per cent of Gross Myth
  30. The Past, The Present and The Future
  31. Caveat Emptor
  32. Overpaid Long Term Staff
  33. Selling your Practice in Stages
  34. A Potential Pitfall of Selling Shares
  35. Value in Your Practice Through Balance
  36. Only Trusted Staff Can Defraud You
  37. To Own or Not to Own Practice Real Estate? That is the Question.
  38. Coping With A Large Patient Base
  39. Successful Dental Practice Transitions
  40. Taking Care of Business
  41. The Investing Dentist Phenomenon
  42. Two areas to focus upon that could negatively impact the value of your practice
  43. Organize your Debt in Order to Sell your Practice
  44. Having a Better Team
  45. How Do I Prepare My Practice For Sale
  46. How Do I Prepare My Practice For Sale? Part 3
  47. How Do I Prepare My Practice For Sale? Part 2
  48. How Do I Prepare My Practice For Sale? Part 1
  49. Advice to My Son or Daughter Graduating from Dental School
  50. Transition - What to Expect
  51. Discussion on Digital X-Rays
  52. Partnerships and Shotguns
  53. Strategic Planning - How to Get Started
  54. Calling All Vendors - Practices have Gone Up in Value
  55. Purchasers: Expect to Pay More for a Practice because of Lower Professional Corporation Tax Rates
  56. Matrimonial Practice Valuations
  57. Purchaser's Guide to Affording a Practice
  58. Location Improvements Throughout Your Career
  59. Small Practice Valuations
  60. Partnerships – The Best and The Worst
  61. Changing Location When the Opportunity Comes Along
  62. Visual Presentation of Your Practice
  63. Presentation of Charts
  64. Your Premises Lease Can Be Your Worst Enemy
  65. How to Select an Appraiser for Your Practice
  66. How Are Your Billing Ratios?
  67. It Pays to Invest in Your Tangible Assets
  68. The Importance of Separate Financial Statements
  69. Five Time Frame Levels to Sell a Practice
  70. 12 Suggestions to Safeguard Computer Data
  71. How to Buy a Visible Practice
  72. Why is there a shortage of good practices today?
  73. The Importance of Equipment in the Purchase of a Practice
  74. The Balanced Practice
  75. Will My Practice Be Saleable in The Future?
  76. Buyer Be Aware
  77. Excess Profit - The Second Key
  78. Patients and Profits are the Keys
  79. Plan Ahead

Volume 42: Coping With A Large Patient Base

Download the PDF version now!

When a dentist has a large patient base, it can be very logical to hire an associate or a restorative hygienist to increase productivity to better care for the patients. Let’s look at these two alternatives.

Associates

In most situations, associates doing general dentistry are remunerated forty percent for the procedures they do. The concept of a recent graduate as an associate is to improve their skills and speed with a mentor. The long term objective of the associate is generally to have their own practice. When I refer to an associate this is the group I am referring to.

Ideally, the associate can buy into or purchase outright the practice in which they are working. But this generally does not work out and the associate leaves to get more experience with another practitioner or to purchase their own practice. Generally, the timetable of the associate and the principal dentist are not the same. The associate is generally wanting ownership before the principal dentist wishes to sell. Also, there is a risk that the associate will take your patients with them when they leave, even with a sound associate agreement including a reasonable restrictive covenant, this can happen. It certainly helps to have a dental lawyer draft this agreement.

Remuneration to associates varies within some practices to reflect the special circumstances within the practice.  If an associate is brought into the practice to have some high-end procedures kept in-house, the remuneration can be higher such as fifty percent. If the associate is a specialist the rate can jump to 60 or 75 percent. Generally at 75% the specialist brings his/her own chairside assistant. As stated above it is not their primary objective to enhance your practice, it is to gain experience.

Restorative hygienists

We have recently completed a number of valuations where a  restorative hygienist was engaged. Generally, the dentists were pleased with the assistance of their restorative hygienist. It takes a lot more planning by the team to keep the restorative hygienist productive as compared to scheduling an associate dentist. Restorative hygienists are paid on an hourly basis and their salary continues even if they are not productive. Their salaries tend to range from fifty to sixty dollars per hour which would equate to an associate dentist producing $150 per hour. Both the associate and the restorative hygienist would have their own dental assistant. 

A definite advantage of a restorative hygienist is that they do not leave and take patients with them. The difficulty of the restorative hygienist is to employ one in whom you have confidence to follow you and complete the restoration with the quality of dentistry which meets your standards. There will be an investment of your time at the beginning to monitor and train the restorative hygienist to meet your standards and to give you confidence to turn your patients over to them to complete the treatment.

Recently, I valued a practice where the owner of the practice had a restorative hygienist for the associate and the associate paid the wages of the hygienist by deducting the hygienist’s salary from the associate’s gross fees and the principal dentist paid forty percent on the net billings. I am not convinced this would be as satisfactory as hiring two associate dentists.

I had another situation where the principal dentist employed two restorative hygienists for himself. When all the analysis was done this was not efficient as he only achieved a 50% efficiency from the two restorative hygienists. Better to have one fully employed and save the second restorative hygienist’s salary.

I have also talked to several dentists who tried to utilize a restorative hygienist but gave up as they could not get the results that they wanted.

Summary: having a large patient base is great but it creates its own problems and requires more administration time. Associates and restorative hygienists solve some of your problems but they also bring new challenges.

Graham Tuck, H.B.A., C.A. is the broker/owner of Professional Practice Sales (Ontario) Ltd., which specializes in the valuation and sales of dental practices. He can be reached at (905) 472-6000 extension #24 or 1-888-777-8825 extension #24 or e-mail at: grtuck@rogers.com

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