Among the most important personnel decisions you will make as your group practice grows is which associate doctors you will want to employ in the practice. On patient days when you are not there, this doctor represents not just the attitude and environment you want to convey to patients, but also have to treat patients with a level of quality that is satisfactory to you. Clearly, you want this person or people to fit the treatment style for all of your patients and have an amenable personality.
Beyond that, there are a number of other important considerations when identifying and employing associates (not that I use the term employing here – if you and your tax advisor feel that an independent contractor arrangement is superior and IRS-friendly, the considerations described in this post do not change).
Here are the items to consider with an associate:
Where do I find associates?
The market used to be extraordinarily tight. As the recession descended upon us and ownership became less of a shining star, a number of doctors elected the associate route. One number that seems to have swelled is the number of doctors that own a small practice with limited production. On the non-patient days those doctors would work as associates to earn extra income. So, those smaller practices represent a source of potential patients (if amenable, you may want to consider making an offer to acquire the practice to build your own practice size). A number of students coming out of school want to start as an associate to build skills so you may want to contact your former dental school and/or orthodontic school. A number of services exist that identify and place associates. Of course, there is a fee for these services – including some that charge you up front before a doctor is found. So, please be careful here when you choose. If you go with a service, I’d recommend one that only charges when an associate is found and placed in your practice.
One issue that is the source of some debate, especially for orthodontists, is whether or not to use general dentists to perform some orthodontic procedures. They do not handle the consultation of patients, but handle routine procedures and things like debonds to free up orthodontists to handle more involved procedures and new patient consultations. We used this tactic at OCA with success, but some doctors are not comfortable with this arrangement. Of course, do whatever works for you, but if you are willing to consider it, that is one option that might be available.
How do I compensate these doctors?
There are a lot of ways to go here, but as a general rule, I would recommend a combination of a base salary plus an incentive for performance. How you structure the incentive depends on your relationship with the associate. You may want to provide an incentive to the associate based on profit, but if you control all of the funds and keep your financial results close to the vest (which is certainly fine), the associate has no control over potential profitability and no way of knowing whether or not his or her efforts are making a difference. In other cases, the associate is essentially treated as an owner of the 2 offices in which he or she works and, as such, a profit incentive would be appropriate. Without a profit incentive, tie the incentive to new production or collections.
For example, you may decide to set up your associates with a daily rate of $700 plus 10% of patient collections on days that the associate works. Or if the associate sees new patients, you may want to give a payment for each new contract signed. In any event, you want to provide some incentive for the associate not only to come in to see patients, but also to make sure that the practice is successful. After all, you can’t be there every day and you need the people working there to have your best interests at heart.
One major issue that comes up in a group practice setting is the issue of patient transfers. If the associates get an incentive and a patient switches offices during mid-treatment, especially after paying off the contract, how do you handle the compensation? We’ll discuss that in our next post.
How do I monitor associates?
As far as the performance in the practice financially and the flow of the day, we talked in a recent post about the tools you can use to monitor results (call us!). But what about the treatment performance? Quality assurance specialists all have their own opinions, but here are some ways to handle it:
Spend time in the office on new patient days – The new patient consultation is critical for treatment. Here, the entire roadmap for treatment is laid out. If you’ve diagnosed things correctly (and I’m sure you have), others just need to follow the plan like a construction company follows a blueprint. So, you can establish a level of control over treatment by spending your limited office time during this part of the process. You may also elect to observe your associate to train them over time.
Select random cases for review – You’ll probably want to pick several random cases at random times (and I’m not talking about the mathematical definition of random – this isn’t a math blog) to review to make sure that treatment is moving along according to plan. For this, you will want to make sure that you have some sort of electronic charting system common to most practice management software. Otherwise, digging through files could be time-prohibitive.
Select outlying cases for review – You may see some difficult or severe cases that you want to keep your eye on as treatment progresses. For this, you may want to check them off to review online, have the office keep more detailed records or stop by the office on the patient days for these patients just for a few minutes to look more closely at these patients.
Won’t my associate learn a bunch of skills from me and then leave?
Maybe. But look at this as an opportunity. In a number of cases, the associate decides to leave to start his or her own practice. You may want to offer your assistance, financial or operational, to get them rolling. For that, you may own a piece of the practice or charge a fee. Either way, you are able to potentially expand your brand and the expanse of your practice.
In some cases, you may value the associate so much to allow him or her to buy a piece of the offices in which he or she works. This will keep them tied into your practice and position them to pull on the same end of the rope as you when ensuring practice success.
Much, much more to come in the group practice roadmap. Keep it locked in to My Practice Engine and stay in touch.
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