To this point, we’ve painted a nice, white picket fence, daffodils and roses view of opening a group practice. If you have a good system, find new locations, get financing, open the offices using that system, monitor results, lather, rinse, repeat. Of course, life isn’t that simple. Yes, no matter how many offices you have, supply orders will get screwed up, employees will quit and a patient or two will have an unpleasant experience. On top of that, certain problems unique to a group practice setting will loom over you at some point or another.
Here we discuss some of the problems that you will see as you develop and operate a group practice. We’re not going to discuss the most frequently occurring problems, but a number of the ones that tend to cause negative emotions to swell, hard feelings to harden and chairs to get thrown (OK, I haven’t seen any chairs actually thrown, but a few were grabbed in anger before cooler heads prevailed).
Patient transfers
We alluded to this in our last section. Here’s the situation: you have your associates set up on an incentive program based on collections in the offices in which they work. Or, you may have had your associates in a position to own a piece of those offices. Either way, same issue. A patient starts treatment in office A, worked primarily by associate A, and pays the entire contract amount up front (sweet!). About 6 months into a 24 month treatment, that patient moves across town and decides to seek treatment at office B, worked primarily by associate B. Now, associate B has 18 months of treatment to do without a penny of collections left.
You can, and we have, argue(d) that transfers even out over time. If 3 paid-in-fulls come in, 3-4 will transfer out before the end of treatment and so it is essentially a zero sum game. Great, logical, point and one that is routinely ignored by the parties involved. Treatment has been refused. Loud exchanges have been had. The loser in this is the patient and your reputation as a brand that can cater to patients no matter which office they want to visit.
Solution: Have a system in place for patients that transfer. The simplest answer is just to divide the total fee in the case above by 24 and credit each office for the number of months seen. So, office A would get credit for 6 months of payment and office B would get credit for 18. But as we know, in orthodontics, a lot of the work is done up front to get the patient in braces. If you evaluate things on a percentage of completion basis (and the SEC, FASB and other acronyms have required us to do this), 24-30% of the treatment is completed in month one with a relatively equal amount in the remaining months. So, office A would get credited for 30% of the fee in month 1 and then 3.04% in months 2 through 6 with the remainder to office B.
Sounds like a lot of math for a less than frequent occurrence. If you have a good practice management software, it’s done on an automated basis so that’s easy. And, it saves you from a lot of unpleasant phone calls and awkward dinner conversation when spending some social time with your associates.
Uniforms
When you build your brand as a group practice, some consistency across all of your offices helps to build that brand. Offices have the same general color scheme, advertising is consistent and it helps to have your staff clothed the same way.
At a meeting of our doctors and managers, we introduced a new uniform for our offices and the response was shocking. Loud voices, red faces, and the aforementioned gripping of the chairs in anticipation of throwing. I half expected Michael Buffer to walk into the room. There were objections to the color scheme, the shirts, the jackets and everything in-between. Something that was slotted for 15 minutes to occupy space until we got to the guest speaker turned into the talk of the weekend of meetings.
In the end, most offices adopted the uniforms, grudgingly. Others just went their own way. Uniforms were never again slated as a topic for our annual meetings.
In a bigger picture this is an example of what happens when you add more people to the mix and try to add some systems and consistency to have the business side operate efficiently and successfully. More, and more diversified personalities get involved and they are looking to you for an answer. You are in charge. This goes back to the change in role as you transform into a group practice. You are no longer focused just on some individual issues. You are the manager of an enterprise.
Solution: If you have a decision that you believe strongly in and is extremely important, you need to implement it despite the initial unpopularity. Stick to it, but don't be stubborn. If the implementation shows that tweaks are necessary, make them. If it’s something that won’t necessarily make or break your business, be willing to compromise and incorporate the best, logical suggestions. When it comes to uniforms, tread lightly.
Turf wars
Here’s the scenario: you’ve got 2 offices nicely positioned with their own radius on either side of the downtown area. The local government decides to revive downtown by encouraging major investment in residential living and enticing businesses into the area. You start salivating because a lot of potential patients are about to move into a concentrated area and you are positioned to attract them from two sides.
Well, grab a napkin because two different associates have a piece of the action in each of the offices and they want that area for themselves. Claims of exclusivity abound. Contracts are reviewed, lawyers are put on standby and you have a headache. Once you get to this point, repairing the relationships are next to impossible. Yes, this has happened more than a few times.
Solution: If you give your associates a piece of ownership, don’t box yourself in with protected areas, narrowly defined exclusivity or something of that nature. This is your practice and you run it. Establish that you are in control. This puts you ahead of corporate-run DMO’s and DMSO’s that cannot have ownership and need to be sensitive to different matters. Take advantage of that advantage.
If you run into other problems and need to talk about it with someone who won’t charge you or lock you into a contract, let us know. We’ve seen a lot over the years and can rely on that experience to help you.
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