Associate for Your Dental Practice: Do You Need One?

Published March 27th, 2017 in Blog, Practice Transitions (Buy/Sell) | No Comments »

by: Sarah Pajot, Transition Specialist

Are you thinking about bringing an Associate into your practice? If so, there are some questions that you need to ask yourself. Why now? What will an Associate do for you or your practice? Do you want an Associate because you are swamped, or you like the idea of more free time, or because it worked for your colleagues? In a different direction, is the concept of hiring an Associate to permit you to cut back, and having an Associate could replace those hours and keep your practice vital prior to an eventual sale? Ask yourself if you are ready to take less income home. If the need is not real, then you are only building in more overhead, reducing your profit, and perhaps destabilizing your practice. If your plan is to keep your practice vital and still allow you to cut back, then there are some ground rules to hiring an Associate:

  • Do you have enough active patients in your practice to give the Associate enough hours to make it worth their while to come work for you? At the very least, you would need 2,000 active patients to hire an Associate.
  • Are you thinking that this Associate is your built-in buyer for your practice, a possible partner, or do you want to remain in control and just need help in your practice?

You need to determine if the practice can accommodate an Associate. In addition to the active patient count, do you have enough treatment rooms for both you and the Associate to work the same hours? If not, you may need to increase the office hours to do a staggered schedule; so you can both work efficiently. Do you have enough staff to accommodate two dentists and to increase office hours or will you need to add another assistant to accommodate the new Associate? Is there any treatment that you currently refer out that an Associate could perform thereby creating a new profit center in the practice? Is there any specific treatment that you refer out that you would prefer that the Associate not do in the practice?

For example, if the Associate starts an ortho case and then leaves, how do you determine how this case will be completed if you do not do ortho?

A new factor we need to look at now is insurance in your office. Are you a Delta Premier provider? This could be an issue. Most new dentists applying for an Associate position are not Premier providers. How would you handle this in your office? Will the insurance company reimburse you with a different fee schedule depending on the provider?

How will you determine what treatment the Associate will provide if their fees are lower than yours? Who will see the new patients in the practice?

How will you determine if you and the Associate can work together in harmony? Are your practice philosophies the same? Consider doing a personality profile to ensure a good match. What are the Associate’s expectations for working in your practice? Have a frank discussion about your expectations and the parameters the Associate would work under. What are the personal and professional goals of the Associate? What are your goals concerning the Associate?

When you interview potential Associates, you can give them an idea of what you expect and what they can expect. Although you can be somewhat flexible with the Associate, it is good to know the following:

  • Will the Associate be an Independent Contractor or an Employee?
  • How will they be compensated: percentage of production or collections?
  • Who pays for lab fees? and at what percentage?
  • What benefits will you provide: health insurance, retirement plan, vacation, holidays, continuing education allowance, malpractice insurance, etc.?
  • Will you pay for dues, licenses, etc?
  • What administrative tasks will be their responsibility?
  • Will they have any management or marketing duties?
  • Will they be a part of the practice decision making process?
  • Will they be required to attend staff meetings?

There is a long list of items to be determined to have a successful Associate Agreement. These are just a few of the items you will need to concern yourself with.

Whatever the reason to have an Associate, you will want to plan ahead before you bring the dentist into your office; make sure you have all the appropriate contracts in place to protect both you and the Associate. You would need to have an Associate contract that spells out all your expectations of the Associate’s employment, and a Covenant not to Compete; should they decide to leave your employment. The Covenant not to Compete can be signed with a 90-day clause; that way if either of you decide before 90 days is passed that it is not working, the Associate moves on and there is no Covenant. Or it is working and the Covenant goes into effect as of the 91st day. There is no harm to anyone that way. An Associate cannot hurt your practice in 90 days. Please have your attorney draft these documents to make sure they are legally binding and protect you.

The best suggestion I can make is to have advisors, who know your individual practice, help you determine if you are ready for an Associate in your practice. They will help you determine if your practice is large enough for an Associate, if you are ready for an Associate, or if you can work with an Associate. They will help you plan to attract the Associate that would work best in your practice. If you are thinking about an Associate, call your DBS advisors today. We welcome your questions regarding Associates.