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Articles

Volume 42: Coping With A Large Patient Base

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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

The Professional Advisory

  1. One Year Later

  2. Dealing with Unsolicited Offers

  3. Covid-19 Practice Sales Update

  4. When is the Right Time to Sell Your Practice and Why?

  5. Partnership Pitfalls

  6. The Real Cost of a Dental Practice Set-up

  7. Smaller Practice Realities

  8. Dental Market Update - 2019

  9. Creating Your Own Most Valuable Practice (MVP)

  10. Small Practice Economics

  11. The Market is Very Efficient

  12. How Can Dental Practice Values be Rising and Declining?

  13. Hygiene as a Value Driver

  14. The Value of a Good Team

  15. Is it Time to Move?

  16. Staging A Dental Practice

  17. The High Cost of Dying

  18. Deal-Busters

  19. Patients - Attract and Retain

  20. Should I Stay or Should I Go?

  21. Is There a Buyer for Every Practice?

  22. Good, Better, Best - The Market has Spoken

  23. Smooth-Sale-ing

  24. Buying Time

  25. Patients, Patience, Patients

  26. A Real Patient

  27. Why Do a Practice Valuation? I'm not Selling

  28. Irrational Exuberance or The New Normal?

  29. Do dental equipment and dental technology affect a practice value?

  30. Finding and Being a Mentor

  31. Bigger is Better

  32. Dave's Top Ten List for Buyers (Vendors should read this too!)

  33. How Well Do You Know Your Practice?

  34. Dave's Top Ten List for Vendors

  35. What will happen to dental practice Values in the next 10 years?

  36. Your Premises Lease is an Important Asset

  37. What are Associates Thinking?

  38. There is Life Outside the GTA

  39. When Is the Right Time to Sell My Dental Practice?

  40. Mergers are a Viable Option

  41. Is Your Associate an Asset or a Liability?

  42. Has your Practice Facility Kept Up With Your Billings?

  43. The 100 per cent of Gross Myth

  44. The Past, The Present and The Future

  45. Caveat Emptor

  46. Overpaid Long Term Staff

  47. Selling your Practice in Stages

  48. A Potential Pitfall of Selling Shares

  49. Value in Your Practice Through Balance

  50. Only Trusted Staff Can Defraud You

  51. To Own or Not to Own Practice Real Estate? That is the Question.

  52. Coping With A Large Patient Base

  53. Successful Dental Practice Transitions

  54. Taking Care of Business

  55. The Investing Dentist Phenomenon

  56. Two areas to focus upon that could negatively impact the value of your practice

  57. Organize your Debt in Order to Sell your Practice

  58. Having a Better Team

  59. How Do I Prepare My Practice For Sale

  60. How Do I Prepare My Practice For Sale? Part 3

  61. How Do I Prepare My Practice For Sale? Part 2

  62. How Do I Prepare My Practice For Sale? Part 1

  63. Advice to My Son or Daughter Graduating from Dental School

  64. Transition - What to Expect

  65. Discussion on Digital X-Rays

  66. Partnerships and Shotguns

  67. Strategic Planning - How to Get Started

  68. Calling All Vendors - Practices have Gone Up in Value

  69. Purchasers: Expect to Pay More for a Practice because of Lower Professional Corporation Tax Rates

  70. Matrimonial Practice Valuations

  71. Purchaser's Guide to Affording a Practice

  72. Location Improvements Throughout Your Career

  73. Small Practice Valuations

  74. Partnerships – The Best and The Worst

  75. Changing Location When the Opportunity Comes Along

  76. Visual Presentation of Your Practice

  77. Presentation of Charts

  78. Your Premises Lease Can Be Your Worst Enemy

  79. How to Select an Appraiser for Your Practice

  80. How Are Your Billing Ratios?

  81. It Pays to Invest in Your Tangible Assets

  82. The Importance of Separate Financial Statements

  83. Five Time Frame Levels to Sell a Practice

  84. 12 Suggestions to Safeguard Computer Data

  85. How to Buy a Visible Practice

  86. Why is there a shortage of good practices today?

  87. The Importance of Equipment in the Purchase of a Practice

  88. The Balanced Practice

  89. Will My Practice Be Saleable in The Future?

  90. Buyer Be Aware

  91. Excess Profit - The Second Key

  92. Patients and Profits are the Keys

  93. Plan Ahead

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