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Avoiding detours along the road to a good associateship
By Thomas L. Snyder, D.M.D., M.B.A.
The road to a good associateship may be long and winding,
but the rewards will be well worth studying the terrain.
Graduation is near. For four years, you've anticipated this
time in your life when you would join the profession you've
worked so hard to enter. But before you begin your professional
life, you have to make a series of choices and decisions about
what you want from your dental career and your personal life.
You already have fulfilled your dental school requirements.
Where you go next is up to you.
Whether you decide to expand your clinical skills through
a graduate residency or hospital program or become a specialist,
you might consider entering the dental profession as an associate.
The majority of dental graduates pursue associateships as
the first step in their dental career.
No matter what you decide, the good news is that dentistry
is a profession that is growing, thriving, and full of opportunity
for today's graduates. The demand for dental services has
risen dramatically since 1980, when Americans spent less than
$20 billion for dental care. In 2000, Americans spent $54
billion for dental services. Some experts predict that spending
on dental services in 2010 will exceed $110 billion!
Add to this the utilization of advanced technology, the increase
in life expectancies, and the lowering of the dentist-to-population
ratio, and you realize that the potential for a fulfilling
career in dentistry has never been better.
The road to becoming an associate is full of variables, and
knowing the "lay of the land" can help you choose
wisely.
The long and winding road
The road to associateship begins with questions you ask yourself.
Think about your motivations for becoming an associate. Do
you have expectations of immediate ownership, or are you more
interested in working for a while to gain clinical experience?
If you want to become an associate first, are you interested
in selecting an opportunity that will allow you to become
a partner, or do you want to purchase the entire practice
after a period of affiliation? Are you sure that you don't
want to build your own practice from the ground up in a good
location where your can have the lifestyle you've always dreamed
of?
Now it's time to focus on your prerequisites. Give some thought
to the following questions and be honest with yourself.
- Where do you want to live?
- How many days per week do you want to practice?
- What are your ultimate goals as a dentist?
Once you have identified these basics, you can focus on other
details.
1. Select the right practice
If you want to join a practice as a full-time associate and
have an adequate patient volume, you need to join a practice
that is saturated. Saturation means the owner is working the
optimum number of hours per week at optimum speed, is booked
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 will have an immediate
opportunity to gain clinical experience and enhance your income.
Additionally, saturated practices afford greater opportunities
for young associates to build a patient base. A saturated
practice also may offer a long-term opportunity in the form
of an equity interest or potential buy-out.
As a rule, general practices with more than 1,700 active patients
are saturated. An active patient is one who visits the practice
at least once during the past 12 months for a recare visit.
The degree of saturation - or the number of "excess"
patients in a practice - will determine the actual need for
a full-time or part-time associate. For example, an efficient
and skilled owner who is servicing 1,700 patients with a fall-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 work 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.
2. Look before you leap
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, noncompetition and nonsolicitation
agreements, your compensation, and if there is a potential
option to purchase.
However, if your goals include staying in the community and
practicing in the area, work out contractual stipulations.
These stipulations should include transition options such
as partnership opportunities with specific terms and conditions
concerning your future position in the practice.
Nonsolicitation and noncompete clauses are common business
practices that protect the dentist/employer from unscrupulous
tactics. Nonsolicitation means that you may not directly solicit
any patients or staff members.
On the other hand, noncompete clauses may vary. In certain
states, they are not allowed. In others, non-compete clauses
in employment agreements are used with caution. These clauses
enforce geographic restraints regarding noncompetition and
may rely on the practice's zip code analysis to protect at
least 80 percent of the patient base. Frequently, the geographic
limitations are based on local conventions in a specific area.
First and foremost, these covenants must be considered reasonable
to the employer and to the associate. The customary time frame
is from one to two years.
If you join a practice, the noncompete clauses stipulation
should not take effect completely until you are employed for
12 months. A gradual approach might also be used, in which
the first six months of employment are free of a noncompete
covenant and penalty, with restrictions increasing during
the subsequent period of time.
3. Make dollars and sense
Financial compensation is an important part of, an associateship
that demonstrates the goodwill and commitment an employer
is willing to offer to a new dentist. It also can be a clear
signal about an employer's motivation for hiring an associate.
Compensation can be structured in many ways, but it should
be fair and adequate enough to meet personal budget needs.
Today, Internal Revenue Service restrictions defining independent
contractors make it likely that you will be hired as an "employee"
and not as an independent contractor. When you are an employee,
your employer pays one-half of your Medicare and Social Security
taxes through payroll taxes. Independent contractors, however,
must pay both the employer and employee portion of payroll
taxes.
Some of the compensation methods include:
Per Diem rate - Part-time associates typically
are offered per diem rates of $300 to $600 per day, depending
on the geographic area. Part-timers also may be offered a
variation of a rate which includes a minimum daily "guarantee"
and a 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 $4,000 to $8,000 per month, based on the area of the
country. It is not unreasonable to begin a relationship with
a salary, since employers routinely place limitations on the
clinical work available to new graduates. As you hone your
skills, the salary may be replaced by a "monthly draw"
commensurate with the services provided. The fairness of this
arrangement rests in easing the pressure and financial burden
of a young associate, particularly in the early stages of
an associateship. It allows a new associate to build a patient
base gradually with both new and existing patients. The most
effective way for an associate to initially meet existing
patients is by performing a reactivation hygiene visit. This
method of introducing a new dentist into the practice takes
approximately three-to-six months. It affords the reactivated
patient an opportunity to "size up" the new dentist.
If all goes well, that patient becomes the associate's patient.
Monthly draw - a draw is basically an advanced
payment for services rendered. Most practices pay based on
a percentage of collections, but some will use net production.
Compensation rates vary throughout the country, but range
between 33-to-40 percent of collections. On net production,
the rates vary between 30 and 37 percent. Lab charges are
usually deducted from the associate's compensation at the
same rate as the draw. Additionally, appropriate percentages
for services rendered during routine hygiene services should
be added to the associate's compensation.
If you are paid with a draw, you'll need to reconcile what
you have been "advanced" vs. what you actually produced
over a set period. This reconciliation can be 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.
If you monitor your monthly production or collections, this
type of situation can be avoided.
Fringe Benefits - You will need more than a
steady income to feel well-compensated as an associate. If
you are a full-time employee, a comprehensive benefits package
may include health insurance coverage for you, with an option
to purchase coverage for your family. The additional premium
is usually charged against your compensation. Many practices
also provide a continuing-education allowance of $1,000 to
$1,500 per year to help you further develop your skills. Some
also provide pension plans for full-time employees. Participation
in these plans usually occurs after an employment period 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.
Most practices do not pay for malpractice insurance premiums
unless they are specialty practices. Many employers will pay
your malpractice premium and charge it against your salary
since you usually cannot take this as a deduction on your
tax return.
If you are receiving a good fringe-benefits package, the compensation
rate you receive may be lower than those associates who receive
no fringe benefits.
4. Keep in touch
You and your employer will share common 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 communicate regularly to address each other's needs and
to reassess issues as the relationship progresses.
Sadly, many associate relationships fail because of poor or
little communication between the owner/doctor and the associate.
Setting up regular times for communication can eliminate the
most common pitfalls that associates and employers encounter.
There is no need to "settle" for something less
than what you want, although being realistic and seizing a
good opportunity are not mutually exclusive.
To ensure open dialogue and continued commitment to the practice
and career success, employers and associates should meet weekly
for at least the first six months of the relationship. Weekly
meetings should be related to clinical patient-care issues,
so that each party shares opinions and updates on cases and
specific concerns. In addition, regular monthly meetings should
be held to review productivity and other issues related to
managing the practice. These discussions are particularly
important if there is a partnership opportunity. Ideally,
monthly meetings with your employer should continue throughout
your relationship as an associate. If you become a partner,
maintaining this regular communication will strengthen the
partnership and the practice.
As you prepare to enter the dental profession, you will be
faced with opportunities and options that may seem confusing
and overwhelming at times. Your decisions will lay a foundation
for your future, and will affect the time it takes to reach
your personal goals. Performing due diligence, asking the
right questions, and choosing wisely will provide multiple
rewards. As a new dentist today, your possibilities for success
are truly extraordinary!
Five steps to a winning interview
Follow these
steps to interview success, and opportunity will come
knocking:
1) Prepare a professional resume - Resumes
are sales tools that help you sell yourself, even
before your first meeting. Be sure to include information
that will set you apart from others, including clinical
experience, awards, special recognition and academic
accomplishments. Search online for resume tips and
templates.
2) Create a "brag book" - If you performed
substantial cases in dental school, and/or residency
or military training, develop an orientation book
of photos to illustrate your skills.
3) Prepare a personal budget - With dental school
debt, managing your cash flow is critical. Knowing
what you need to meet your financial obligations,
including loans, housing, car, clothing, medical,
and insurance expenses will help you to determine
your income requirements.
4) Don't oversell yourself - Be mindful of questions
that may be asked by the doctor and answer succinctly.
Do not interrupt when the doctor is asking questions.
5) Ask intelligent questions - (See Figure 2,
"The most important questions to ask,")
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The most important questions to ask in an interview
If you want an associateship, asking
the right questions can lead you toward the practice
that best matches your needs.
1) How many active patients are in the practice?
An active patient has been in the practice at least
once over the last 12 months. Practices with more
than 1,700 active patients are usually "saturated,"
which offers steady work for you as a new associate.
2) How many emergency patients does the practice see
per week? If the emergencies are generally patients
of record, this is an indication that the practice
may be saturated and may have too many patients who
are not seen regularly for hygiene appointments.
3) What is the number of hygiene hours per week?
This tells you the level of recare activity in the
practice, which translates into active patients. For
example, one full-time hygienist can treat about 1,000
patients, assuming they are visiting the practice
twice per year. This translates into, approximately
175 recare patients per month. In a busy practice,
there may be opportunities for reactivation hygiene
appointments, which could mean the excess patients
being transferred to you.
4) How many new patients does the practice see per
month? Strong new-patient flow is important, since
you will depend on new patients to build our practice.
Most solo general practices average 10-to-20 new patients
per month.
5) What services are referred out? For example,
many dentists refer out time-consuming endo cases.
If you enjoy endo, this may make you a more attractive
candidate. You can generate good income from these
procedures, plus the invaluable opportunity of building
relationships with patients and, perhaps, becoming
their regular dentist.
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