The New Way

By William Jackson

Peter, a young dentist, has decided to make the leap from being an associate dentist to purchasing his own dental practice. As the reality of a purchase gets closer, he begins to realize how little he knows about managing a dental office. Other factors also increase his fears. Should he increase his indebtedness by adding the cost of a practice to his already large student loans? So-called corporate dentistry is creating tremendous competitive pressure on solo practitioners. There are more dentists trying to sell than trying to buy dental offices, and the trend will only get worse. Just as Peter's fears are about to cause him to reverse his decision to buy an office, he meets Athena while having dinner in her restaurant. She opens the door to a series of people and events that help Peter understand and implement a new way of running a solo dental office that will cause it to thrive in the future, despite the seemingly overwhelming challenges. Peter's journey helps any dentist or dental manager better understand the real challenges ahead and how to best address them.

• Language: English
• Publisher: William Jackson
• Release date: Oct 10, 2014
• ISBN: 9781310692130

Book preview

Introduction

To quote the American Dental Association, dentistry is a profession in transition. While most of us understand that the only constant in life is change, the manner of running a dental business has seemed immune to significant change for several decades. A dentist or office manager of a solo practice, who was frozen in time in the 1990s, could walk into a dental practice in 2014 and find that little in the business flow had changed.

However, several factors are emerging which are forcing the industry to reassess itself. The complacent will likely be in for an unpleasant shock. Demand for dental care has been flat since 2008 and is predicted to remain so into the foreseeable future. The Affordable Care Act is likely to cause a decrease in the number of adults with dental insurance, while placing more children into low paying Medicaid plans. Dental insurance providers are likely to use smaller, more selective networks. The trend towards consolidated multi‐location practices will continue, fueled by changes in practice patterns of new dentists, a need for efficiency, and increased competition for patients.

Simultaneously, the number of dentists who want to sell their practices already exceeds the number of potential buyers. It is projected that by 2018, there will be only 6 buyers for every 10 available solo practices. Dentists who anticipate selling their solo practices need to understand the components that will make a dental practice attractive for acquisition and adjust as necessary, or they may be forced to simply walk away from their asset.

Nonetheless, the changing environment will bring tremendous opportunities for those with the foresight to be proactive. The pressure to reduce costs has already driven innovation, including the use of new business management tools that have never before been considered in the dental industry. The innovations, when used correctly, give the small practice owner many of advantages typically only thought available to large groups. The innovations also give the solo practice the ability to link remotely with others to form virtual clubs or groups, without losing any control.

While the discussions of so-called corporate dentistry are frequent, it became obvious to me that most dentists are unaware of the activities or structure of many of these entities, and hence, have no idea how to compete. They are unaware of the universe of available, innovative business tools, and even when they are made aware, they don’t know how to employ them.

This book is intended to help the solo practitioner to better understand the unsustainable business model of the past, to compare it to the emerging multi-location group models, and to get a glimpse of how to not only survive a changing industry, but to thrive. The New Way also attempts to connect the dots among various information and management technology tools, so that a practitioner can get a better view of the big picture. Too often, a dentist is only shown individual pieces and is left to his or her own to figure out the best fit.

All of the information technology solutions mentioned in the book are available and in use in the dental industry today. Very few practices have begun forming virtual clubs or groups as implied in the book, but they are emerging.

While this is a fictitious story, anyone associated with the industry is likely to recognize a bit of him or herself in The New Way. I hope you enjoy Peter’s adventure.

Chapter 1: Coffee at Athena’s

Peter made a mental note. The God Save the Queen ring tone for Karen had been cute initially, but it was getting old now. Her British accent was a sufficient reminder of her heritage. He’d change it after this call.

Hi, Karen, what’s up?

Peter, I just heard of a new listing that might be exactly what you’ve been looking for. It’s the right neighborhood, good location, and an eager seller. I spoke with him, and he’d like to meet with us. He is available after he finishes with his patients today – sometime after 5:00. She went on to describe the location and some of the other specifics. He hasn’t told his staff yet. So, he’d like to meet at the cafe across the street. It’s called Athena’s. Let’s meet there about 4:45, and we’ll have a chance to chat before he arrives. Ciao.

Peter hung up feeling ambivalent. I suppose I could have said that I was busy, he thought. After seeing 10 or 11 offices that he didn’t really like, he was getting increasingly discouraged. His preference right now was to go the gym to work out. I suppose looking at one more won’t hurt.

On the drive over to meet with Karen and the dentist, his ever-present dilemma began to replay itself. Peter had been in practice for almost 6 years now. He was comfortable in his clinical capabilities. In fact, he knew he was as good or better a clinician than anyone he worked with, and he really liked the clinical part, unlike some of his colleagues. He was making decent money, but like most dentists, he’d always wanted to own his own business, and now was a logical time. He was getting married to Jenna in 10 months, and if the hoped-for family was just around the corner after that, it would be good to have the practice already established. He also really liked the idea of being his own boss.

But, what did he know about running a business? Other than what he’d observed in the practices where he had worked, he didn’t have a clue. What if he wasn’t good at it? He’d need to learn it on-the-go, which was intimidating, but isn’t that how almost every dentist has done it? What if he wasn’t able to reproduce or exceed his current income with his own practice? He still had a substantial student debt. Did it make any sense to go deeper in debt? There are more dentists selling practices right now than there are dentists buying, and it’s projected to get worse before it gets better. What if something happens and I need to sell in the next few years?

Peter wasn’t even half way through his now too-familiar litany of fears when he arrived at his destination. He laughed to himself, No problem. I’ll pick up the questions again tonight when I can’t get back to sleep at 3:30 am.

He was pleasantly surprised at what he saw. The office was in a building on the corner of a busy intersection. The first floor dental office was visible from the street. The signage was very good. He turned the corner to see an easily accessible, spacious and free parking lot. He parked his car in an adequately-sized parking spot, and he noticed the lot was clean and had what appeared to be good overhead lighting. On his way to the diner, he walked through the building. Again, he liked what he saw. It was very clean, light, excellent décor, handicap-accessible.

So far, so good … I guess, he thought as he walked across the street.

Athena’s was part coffee shop, part café, part art gallery, and apparently, part artist’s studio. It even had a little stage in the corner. Peter figured it was used for poetry reading. Although he’d never been to Greenwich Village, he imagined that Athena’s was an attempt to re-create the Bohemian image.

Karen was already seated at a table. I just ordered you a regular coffee. Would you prefer decaf?

No, that’s OK, answered Peter, I don’t seem to be sleeping much anyway these days." Karen stood up, and as they finished a greeting hug, the coffee arrived.

You know, of course, that I don’t like buyer and seller to meet this early in the process, but he insisted. He said the sale will be dependent on his feeling about the buyer. I think he’s afraid a corporate dentistry group will want it.

Do you know how old he is approximately? Peter had mixed feelings about buying a retiring dentist’s practice, but then, he was also concerned that a younger dentist would only sell if there was something wrong with the practice.

I’d guess he’s in his mid-30s, but if you’re worried about why he’s selling, it’s because he’s moving, answered Karen. You have to admit that the location is brilliant, and it’s basically the neighborhood you wanted. We’ll go over the financials later, but from what I’ve seen, it looks like a solid practice. The negatives are the dentist to population ratio around here isn’t great, and within the last 12 months, two corporate practices have opened within five miles.

Peter was going to ask her to elaborate on the negatives, when the he heard the server say to a man who just walked in, Hi, Dr. P.

Karen stood and strode to the youngish-looking man with her hand extended, Hello, doctor. I’m Karen.

It’s nice to put a face to a voice, Karen. Please, call me Paul.

Hi, Paul, I’m Peter. Peter thought of making a biblical or singing group quip, but decided not to. Instead, he just smiled as he shook Paul’s hand.

Can I bring you something Dr. P? called the server from behind the counter.

I could use a decaf, Athena, Paul replied. Thanks.

Chapter 2: It’s Going to be a Lot of Work

Paul didn’t wait for any small talk or other amenities. Thanks for meeting me here. I haven’t told all the staff yet. They’re not really good at handling change – who is? So, I decided to wait until I was further along in the process. I’m sure you have questions. Where should I start?

The beginning is always a good place to start, smiled