Dr Phillip Palmer, April 2004 - Several sociological phenomena have been converging over the past few years:
• There appears to be a moderate to severe shortage of dental manpower-that also looks like worsening in the future, depending on where you are situated in Australia
• There is an increased demand for dentistry. People are living longer and are generally expecting to keep their teeth longer.
• There has been a boom in cosmetic procedures for many years that appears to be strengthening (partly driven by ‘makeover’ reality TV shows).
• The cost of setting up practice is escalating. Digital anything seems to be considerably more expensive than previous analogue models of the same thing.
• A number of dentists will be aiming to get out of their practices over the next 10-15 years, and the pool of dentists in the market to buy a practice does not appear to be able to keep pace.
• Dentists who are graduating these days have greater and greater expectations for their practicing life. In fact, because of the shortage of available dental manpower, young eligible dentists are interviewing practices for consideration rather than the other way around.
The result of this phenomenon is that there is a real need to solve the problems of both Dr Senior (the dentist at the end of his career) and Dr Junior (the dentist wondering where he should take up employment).
Dr Senior wants
Dr Senior wants, over the remaining years of his practice, to cut down his hours at work and at the same time to also know that he has:
• Significant lifestyle improvements
• Greater support for holidays, emergencies etc
• Better facility usage
• Economic benefits
• Expanded market-hours, service mix, gender
• Camaraderie
• New ideas
• Decreased overhead percentage
• A guaranteed buyer of his practice
• A fair price for the sale of his practice
If only he could be assured that he has a purchaser for his practice, work on until he’s ready to retire, and have a relationship with Dr Junior that will help him to accomplish his plan.
But he’s worried - he has heard of arrangements that fell apart, leaving other ‘Dr Seniors’ with problems that were even greater than the original problem of being alone, or not being able to sell his practice
Dr Junior wants
Dr Junior is looking for where is he going to work? What job should he take? Or should he set up a new practice? Let’s examine Dr Juniors concerns:
Setting up a new practice
Firstly there’s the cost. Stories abound of practice establishment costs of $400,000-500,000, but even for a modest practice, it would be difficult to imagine getting any change out of $200,000. Especially when you consider that despite very low income in the first few months there is a need for working capital to pay for staff costs, rent, leases, materials, and this is without considering any HECS repayments necessary.
Paying off $200,000 over 5 years (according to Medfin) would entail monthly repayments of $3900. This is a difficult figure to be able to afford, month after month, on top of normal practice running costs, without any guarantee of it being a busy practice with a good cash flow. When you consider all this it really is quite a gamble setting up a new practice from scratch. And who knows if it’s going to be successful at that location anyway.
If the decision was to buy an existing practice, the gamble may be a little less, but how do you know if the patients will stay, if the staff will stay and how you’re going to fare in your new circumstance. For these reasons its far easier and less risky (and commonly less expensive) to get a job in a practice with prospects of being able to buy in. That way Dr Junior gets to know the patient flow, the income and cash flow and whether or not it’s the right location etc. Lending institutions are also far happier to see an existing business history to lend on rather than a start up.
Where To Work, What Job To Take?
Clinical Standards
Obviously I’d be advising any dentist to ensure that they get into a practice that has clinical standards at the very highest level.
It is often not easy to determine the standards of a practice when going for an interview. If asked, all employing dentists would comment that of course they operate at a high clinical level (the latest survey shows that 87% deem themselves to be above average clinically). It is much easier to look at tangible items in a practice (types of equipment, computers etc), and of course these have importance, but it is imperative for the new graduate to ensure that they start off their new career with the right standards. Naturally ‘sexy’ new modes of treatment - cerecs, digital x-rays, lasers, and brand new practice fit outs will appear to be very attractive to the employee, but shouldn’t be paramount at this early stage.
So how do you determine the clinical standards of a dentist?
The only way to determine this is to ask:
How and whether they do different procedures (amalgam, endodontics, crowns, implants, etc), and make a judgment call on their answers.
How regularly does the employer himself engage in continuing education and training? This will give you an idea of how committed the practice is to continuous improvement or how stagnant it is in terms of clinical development.
Ethical Standards
Do you feel comfortable with the employing dentist’s philosophy - what is their approach towards their patients, their staff etc?
The Employer/ Employee Relationship
Probably the most important but least considered feature of one’s first job should be the ability to be coached and mentored in those areas of initial weakness - usually clinical and managerial skills. This should include communication skills and patient care. The benefits of this cant be over-emphasised when you consider the effects this can have over a full career.
Will the employer encourage (and possibly subsidise) the new dentist to attend continuing education courses?
The Practice Systems
Communication. Are there regular staff meetings to ensure that communication is fluid and open between all the staff members and to ensure that any potential issues are anticipated, prepared for and handled in a timely manner? Are there verbal skills training to increase management of patient issues?
Numbers. Does the practice know how many new patients they get a week? Do they know how many active patients they have? This is important. How else will you know if the practice is busy enough to allow enough patient flow for two dentists? Just because a practice is too busy for one dentist (some are even booked out months in advance), doesn’t mean there’s enough abundance in the practice for two dentists to be busy. It may just be a backlog of work that the senior dentist hasn’t gotten to, rather than an ever-increasing number of patients calling that practice home.
Job Descriptions. Does the employer know what your responsibilities will be exactly? What times, where and how you will be expected to work? Does everyone in the practice know what his or her responsibilities are? Having job descriptions in place are very important. How else are you meant to know if you are meeting or exceeding what is expected of you? How else are you to know what to expect of other staff?
There is nothing worse as an employee (especially around a pay review or “view to partnership” talks) than “shifting goalposts”. Make sure that the expectations of you are well established in advance.
Pay
Lastly we should look at pay rates or commissions. Naturally the first tendency of every new graduate after 6 years of student life is to look at the dollars. I urge new dentists to put this to the end of their list. There will be plenty of time in a career to kick some financial goals.
We are in a golden age of dentistry at the moment and the future is looking even rosier. People will certainly be keeping their teeth for longer and longer, the interest in cosmetic dentistry will continue and the shortage of dental manpower will become even more severe.
As new graduates I strongly recommend that you concentrate on getting the foundations of your clinical dentistry, leadership skills and practice management to a level you’ll be proud of. If you develop and become proficient in all three together you will find that the money will follow, and you’ll be delighted with your choice of career.
What future is there for Dr Senior and Dr Junior?
What to make of all those ads that say “Dentist wanted with view “? Just exactly what does that mean? For Dr Junior, he thinks that this means that he is being offered the chance to buy in to an established practice with an established client base. However often the employing dentist means that when Dr Junior has built up the practice gross enough, he’ll then be offered the opportunity to buy the goodwill he’s created.
It is important to establish exactly what “with view” means from the outset to avoid considerable frustration and conflict further down the line. There would be nothing worse for Dr Senior than introducing all his patient base to Dr Junior, only to have him either move away, or worse still to move nearby, taking a pool of Dr Senior’s patient base with him.
All dentists need to know that taking on an associate is a process, not a transaction. The desired end result for both parties should be that a Transition occurs. After an agreed upon timeline (usually a year), agreements get signed, a valuation is carried out, and contracts are exchanged for Dr Junior to buy in to the practice at a mutually beneficial point in time in the future (usually 3-5 years down the road).
That way Dr Senior gets all the things he wanted, as does Dr Junior. Usually it is also less expensive for Dr Junior, as well as less risky. He is buying in to a practice where he knows the patients, staff etc, and is totally aware of his income, and cash flow. How preferable a situation is that compared to buying into an unknown practice or setting one up from scratch.
[Published Australasian Dental Practice, April 2004]