Archive for the ‘Associates’ Category

Associate Contracts

Wednesday, October 15th, 2014

Once you’ve assured yourself that the economics make sense for your associate, proper planning is key.

The first step is to discuss all the terms and conditions of your associate’s potential employment and then have an employment contract prepared. Make sure you have an attorney who has dental experience and/or a consulting firm who can recommend the nuances that an associate contract should contain.

For example:

1. Should a restrictive covenant be in force from the first day of employment or should it be graduated over time?
2. Should your associate be prohibited from soliciting your patients as well as your staff?
3. Should you place restrictions on the lab selection?
4. If your associate leaves after a few months, on their own volition, after investing thousands of dollars in marketing, should you be reimbursed?

These are just a few of the key questions that need to be addressed in your associate employment agreement. “Off the shelf” documents will not do justice to these key areas, only properly prepared contracts will.

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Dr. Thomas L. Snyder, Director, Practice Transitions for The Snyder Group, a division of Henry Schein Professional Practice Transitions.

The Profitable Associate

Wednesday, October 1st, 2014

Can an associate generate a profit? The answer is in the size of your patient base. If you have a saturated practice with an abundance of patients, you can keep your associate busy and generate a 30-35% profit margin.

The first step after accurately measuring the size of your patient base is to perform a cost benefit analysis to determine the likelihood of profitability, as well as to gauge the non-monetary benefits such as improved quality of life, which may be equally important. The following steps will help you analyze the economic sense of hiring an associate, and will help you set realistic expectations about the return on investment you are likely to attain.

Step 1: Determine Production Goals

Step 2: Assign Direct Expenses to the Associate

Step 3: Apply the Formula and Get the Answer

Associate Profit Analysis Summary

Daily Collection – $950
(Assume 95% Collection/Production Ratio on Daily Production Goal of $1000)
# Days Worked Per Year X 196
Projected Annual Revenue $186,200

(Assume 34% Collections) Associate Compensation – $63,608
(6% Dental Supplies) Associate Payroll Taxes – $4,843
(8% Lab Expenses) Associate Lab Expense – $14,896
Associate Supplies – $11,172
Assistant Salary (inc P/R tax) – $21,620
Uniforms – $200
CDE Allowance + $1,100
TOTAL EXPENSES – $117,439

Projected Annual Revenue: $186,200
Less TOTAL EXPENSES – $117,439
Associate Profit: $68,761

PROFIT MARGIN: 37%
($68,761 PROFIT / $186,200 ANNUAL REVENUE)

Once you’ve assured yourself that the economics make sense for your associate, proper planning is key. Most importantly, if this associate is a candidate for your long term transition plans, make sure that you properly think about your exit strategy so that once you begin interviewing candidates, you clearly spell your vision for a successful relationship.

To read the original article in its entirety please visit: The Dentist’s Network Newsletter #100
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Dr. Thomas L. Snyder, Director, Practice Transitions for The Snyder Group, a division of Henry Schein Professional Practice Transitions.

Valuable Associates Reactivate Patients

Monday, September 30th, 2013

Busy practices that may be the right fit for you to join usually have a patient retention problem. Ideally a patient reactivation program should be implemented to coincide with your joining the practice. This allows the practice to reactivate patients that have not been seen on a regular basis in hygiene. This is often the case in offices that have more than enough patients; however, there is not enough capacity for one doctor to handle the entire patient base. Your joining the practice is the perfect opportunity to solve that problem.

 

When patients are reactivated, they should be scheduled for a hygiene appointment with the associate. The hygiene appointment is probably the most non-threatening appointment in the dental practice, making it the ideal way for you, the associate, to get to know several of the patients. It also allows patients an opportunity to get to know you, and hopefully you will form a long-term dentist/patient bond with all of them.

 

Once you’ve completed their reactivation hygiene appointment, future hygiene appointments should be schedule with the practice’s hygienists. Your employer should schedule you for no more than four reactivation patients a day so that you have time to perform other clinical procedures.

Associate Dentist Needs Help…

Monday, January 16th, 2012

I am an associate dentist. I have been working with the Senior Associate for a little more than 2 years, and he is now wanting to make changes to our contract. Having no dentists in the family and few friends in the field who I would feel comfortable sharing this information with, who can I ask for advice regarding this associateship? I need a relatively unbiased opinion, and still being relatively new to the field, I don’t want to make a rash decision out of anger or emotion. If you could give me any resources to help me, regarding average percentages (of collections, production, etc) or average pay for someone in my position, or if I could consult with anyone on this site, I would greatly appreciate it. I am a regular reader of your magazine and truly appreciate all of the helpful advice you offer.

 

Thanks so much.

 

-Allison

 

________

Hi Allison,

 

Thank you for reading the magazine. I am going to refer you to Jason Wood, Attorney. Please call him.

 

Law Offices of Wood & Delgado

20 Pacifica, Suite 320

Irvine, CA 92618

(800) 499-1474 toll free

(949) 553-1474

 

You need legal advice to protect yourself. Jason specializes in dentists. Let me know if you have any trouble connecting with him. Also, most associate dentists are paid a % of collections with a range of 28% to 35%. 33% being the most common %. Hope this helps.

 

Best regards,

 

Sally

Becoming an Associate…Consideration #4

Wednesday, June 1st, 2011

Whether you just graduated from dental school, finished a residency program or specialty training, the majority of young dentists begin their careers as associates. The road to becoming an associate is full of variables, and knowing the “lay of the land” can help you make wise decisions. The journey begins with choosing the practice that is right for you.

 

Consideration #4 – Communication…Communication

 

Hopefully, you and your employer share values and philosophies on patient care and the important role you each will play in the success of the practice. Like any relationship based on mutual respect, trust, and honesty, associates and employers must engage in ongoing communication to address needs, expectations, and issues that arise.

 

Take advantage of “learning the ropes” from your employer. Whether you remain with the practice as a future partner or leave to purchase or start a practice, the lessons learned from the non-clinical side of an associateship relationship can have a big impact on the success of your career.

 

Becoming an Associate…Consideration #3

Monday, May 2nd, 2011

Whether you just graduated from dental school, finished a residency program or specialty training, the majority of young dentists begin their careers as associates. The road to becoming an associate is full of variables, and knowing the “lay of the land” can help you make wise decisions. The journey begins with choosing the practice that is right for you.

 

Consideration #3 – Compensation

 

Compensation can be structured in many ways, but should be fair and adequate to meet your personal budget needs.

 

Compensation methods may include:

 

Per Diem Rate. Part-time associates are typically offered per diem rates of $400 to $600 per day, depending on geographic area, or a variation of a rate that includes a minimum daily “guarantee” and an extra percentage based on extra clinical production per day. The variable per diem rate can be attractive as your productivity and proficiency increase.

 

Salary. Full time associate salaries range from $5,000 to $7,500 per month based on the geographic area. It is not unreasonable to begin an associate relationship with a guaranteed
salary, since employers may place limitations on the clinical procedures, especially with recent graduates. After the initial probationary period is complete, the guaranteed salary is usually replaced with a draw.

 

Monthly Draw. A draw is a monthly salary but it is not guaranteed. It is an advanced payment for future services rendered. The draw is credited against a commission arrangement.
Most practices pay on a percentage of collection but some will use net production. Compensation rates vary throughout the country but normally range between 30-40% of collections.
If the commission relates to net production, the rates vary between 28-37%. Lab charges are usually made against your compensation at the same percentage of your commission.

 

When you are paid a draw, you’ll need to reconcile what you have been “advanced” versus what you actually produced or collected over a defined period. This reconciliation is usually done on a monthly or quarterly basis. Reconciliation payments are recorded as additional salary. If there is a shortfall between your draw and what was produced or collected, your draw may be lowered for the next period, since you were essentially overpaid. However, this can be avoided if you monitor your monthly production or collections.

 

Fringe Benefits. Many practices provide full-time associates with single coverage health insurance. Additionally, we recommend that a continuing education allowance of $1,000 to $1,500 per year be provided to help associates further develop their skills. When practices provide pension plans for full-time employees, associates can be included. However, participation in these plans usually occurs after employment of one-to-two years. Provisions for vacation time, sick time, and personal time also should be spelled out. In most instances, associates do not receive paid vacation or sick days.

 

About 45% of general practices pay for malpractice insurance premiums. In specialty practices, they often pay the full premium. Some employers will pay your malpractice premium and charge it against your salary, since you normally cannot take this expense as a deduction on your personal tax return. If you receive a comprehensive fringe benefits package, the compensation rate that you receive may be lower than those associates who receive no fringe benefits.

 

Becoming an Associate…Consideration #2

Friday, April 15th, 2011

Whether you just graduated from dental school, finished a residency program or specialty training, the majority of young dentists begin their careers as associates. The road to becoming an associate is full of variables, and knowing the “lay of the land” can help you make wise decisions. The journey begins with choosing the practice that is right for you.

 

Consideration #2 – Employment Relationship

 

Do not enter into a relationship without a written contract. A well-designed employment agreement will address many issues, including your role in the practice, non-competition agreement (if applicable), non-solicitation agreement, your compensation, and possible option to purchase. Additionally, realize that non-solicitation and non-compete clauses are common business practices, which protect the employer dentist from unscrupulous tactics. Non-solicitation means that you may not directly solicit any patients or staff for a specified period after you leave the practice.

 

Non-compete clauses may vary. Moreover, in some states they are not enforced. For those states that enforce non-compete clauses, they have to be crafted fairly. The geographic limitations in covenants are based on local convention in a specific area and must be considered to be reasonable. For example, a 10-mile covenant restriction in a major metropolitan area would probably not be enforceable for a general dentist, whereas one-to-two-miles would be considered reasonable. Restrictive covenants for specialties tend to have a larger geographic range since the number of specialists is fewer. The duration of a non- compete ranges between one-to-two years.

 

When you join a general dental practice, a non-compete clause stipulation should not take effect completely until you are employed for 12 months. A gradual approach, which allows the first 6 months of employment to be free of covenant and penalty, with subsequent periods of increasing restriction, is more appropriate. In cases of specialty practices where the employer is introducing the associate to the referral base, the graduated approach would be modified and have a shorter timeframe for increasing restriction.

 

 

Read more on Becoming an Associate at http://www.thenewdentist.net/Library/index.htm

Becoming an Associate…What You Need To Know

Thursday, March 24th, 2011

Whether you just graduated from dental school, finished a residency program or specialty training, the majority of young dentists begin their careers as associates. The road to becoming an associate is full of variables, and knowing the ‘lay of the land’ can help you make wise decisions. The journey begins with choosing the practice that is right for you.

 

If you want to join a practice as a full-time associate and have adequate patient volume for yourself, you need to join a practice that is “saturated.” Saturation means that the owner is working at optimum speed, practicing optimum hours, is scheduled fully, six to eight weeks in advance, and has more new patients in the practice than can be cared for.

 

By joining a “saturated” practice, you have an immediate opportunity to gain clinical experience and enhance your income. Additionally, saturated practices afford greater opportunities to build a patient base. A saturated practice may also offer long-term opportunity in the form of an equity interest or potential buy-out.

 

Usually, general practices with more than 1,700 active patients are at the saturation point. An active patient is one who visits the practice at least once during the past 18 months for a recare visit. The degree of saturation, or the number of excess patients in a practice, will determine the actual opportunity for you to work as a full-time or part-time associate. For example, an efficient and skilled owner who is servicing 1,700 patients with a full-time workload may want to reduce hours and transfer patients to a part–time associate. Generally, practices with 2,500 or more patients present excellent full-time opportunities for new associates.

 

Therefore, if you are considering a full-time associateship, be sure to inquire about the size of the active patient base.   

 

Snyder, DMD, MBA, Tom  (2009, Summer). Becoming an Associate…What You Need to Know. the NEW DENTIST™ Magazine, 20-21.

Associate Lab Charges?

Thursday, November 12th, 2009

Hello Dr. Snyder,
I read your article in new dentist this past month and I have a quick question for you.  You wrote, “lab charges are usually made against your compensation at the same percentage of your commission.”  Does that mean that if the associate is getting paid 35% of collections that the lab bill is deducted from the 35%?  Or is the lab bill deducted from the associate’s total collections and then 35% is taken from that?  Thanks for your time.  great article!
Jayson

Is Associate Needed?

Thursday, July 23rd, 2009

I would like to know how I can be sure the dentist needs an associate and what I can do to make patients want to schedule appointments with the “new dentist.”

Dr. S. C.

TN