Last updated on November 29th, 2017 at 04:17 pm
All About Associates, Part II
By Gregory A. Winteregg, D.D.S.
(This is Part II of a two part article on the subject of associates. For Part I, click here.)
Perhaps now or some time in the future you’ll think about adding an associate. Whether that time is today or ten years from now, it is best to be informed on the subject.
Part one of this article (which appeared in our last webletter) offered guidelines to help determine the need for an associate in your practice.
In this issue, we’ll pick up with questions you might have once the decision is made to hire an associate. Specifically:
- Do you want an associate or a partner?
- What type of work do you expect the associate to do – i.e., what would be his or her job description?
- How should you pay them?
- Where can you find associate prospects?
- How does the associate’s treatment philosophy match up with yours?
- Are there ideas on how to determine if the associate is a “good fit” with your office and the staff?
1. Do you want an associate or a partner?
You should never enter a relationship saying “Well, come on board and we’ll see how it goes and work out the details later.” If agreements are not clearly delineated, each party has their own idea of what the agreement is and they seldom match! The associate starts with the idea he or she will be offered a partnership and eventually buy the owner/doctor out. The owner/doctor is entertaining the thought but is ambivalent.
The associate makes the schedule easier so the owner/doctor, who originally planned on retiring in three to five years, now has more time off, feels better, and decides to work another fifteen years. The associate feels abused and taken advantage of and decides to leave. The owner/doctor finds himself back at square one. What happened? In this case, a severe communication failure! Ultimately, the owner/doctor displayed poor leadership/executive skill.
Had good communication existed from the get go, with a clearly delineated idea between both parties as to where the relationship was headed, things might have turned out differently. You don’t have to offer a partnership right up front.
If partnership is a possibility though, at least have some benchmarks in place and get these agreed upon by both parties beforehand – and stick to the agreement.
For example, you both agree that you will work together for a set evaluation period before talking partnership, etc. One excellent example I saw was a doctor who had his new associate (potential partner) sign three agreements: a) associate, b) buy-in and c) buy-out.
If the associate met certain guidelines and the relationship was good, he could buy in. If the owner then wanted to sell the remainder, the associate could buy him out, etc. Either way, you might not want a partner – ever. This should also be made clear. Talk it over with your accountant or other advisors and decide what you are shopping for before you start on this journey.
2. What type of work do you expect the associate to do – i.e. what would be his or her job description?
Do you expect them to: take all operative and root canals off your schedule and see all the children that come in? Will they treatment plan and present their own cases?
Determine issues like this prior to interviewing, much less hiring. Keep in mind that the associate is there for you and your office. They either fit or they don’t.
Imagine you were selling your house. If the realtor brought in a potential buyer that asked you to add a pool and two more bedrooms, you wouldn’t do that to make it work. The realtor would find another buyer. Same concept with an associate.
For example: You want an associate to free up your schedule by taking all of the fillings, kids and root canals. The prospect you are interviewing refuses to do root canals and doesn’t really like kids. Next…You get the idea.
While of course some things are open to negotiation, don’t go crazy attempting to accommodate. If you needed a full time receptionist and you interviewed someone who couldn’t work Mondays and Wednesdays– why hire them? You would eventually find someone who can.
3. How should you pay them?
This depends on what you expect the associate to do. If they are to find their own new patients, present their own cases, etc. the percentage would be higher. Conversely, if you handle all of the treatment planning and fill their schedule for them, the percentage would be lower.
Sit down and do the math. If you had an associate producing X amount, at Y percentage – what would that equate to and how would that impact your bottom line. Also consider how this would impact your schedule. If you are booked out for several weeks and you give an associate all operative, root canals and single unit crowns, etc., you would be able move all of the major work on your schedule forward making you more productive.
For a GP associate, anything over 35% of collections in compensation is too high in my opinion (specialists are an exception). I’ve seen some doctors who pay their associates 20-25% if all they do is work on patients with no treatment planning responsibilities. You can also mix a per diem and percentage. If you are going to do this, you have to ensure it is viable for the office. For example:
You guarantee a doctor $450 per day. He works 16 days per month, making the guaranteed salary $7,200 per month. You decide you don’t want to exceed 30% in compensation for the associate, so we take that $7,200 and divide it by 30 and multiply by 100. This is the old fashioned way to determine what $7,200 is 30% of.
- Associate Monthly Base $7,200
- $7,200 Divided by 30 equals 240.
- 240 multiplied by 100 equals $24,000.
- $7,200 is 30% of $24,000.
So, if we are going to give a percentage on top of the base, we tell the associate that they get 30% of anything they collect over $24,000 in a given month and we distribute this amount at the end of the month.
On the other side of this, what happens if a year into the relationship you have an associate who’s only collecting $15,000 per month and you are paying him/her $7,200 a month in salary? Well, you had better do something as they are costing you more than they are worth – in this case 48%!
In my experience, if an associate can’t do $40,000 per month, no one is going to be happy. They won’t be making enough money and below that level of production you aren’t making enough of a profit to keep them around. You must have enough business to make it worth everyone’s while and they must be confident enough clinically to produce it.
4. Locating associate prospects.
You’ve filled in the blanks and decided what you want and what you have to offer. If no prospects are immediately to hand, you need to go out and find someone. The question is: where to look? The answer: everywhere! Here are some ideas:
- Advertise in the paper.
- Ask various sales reps (i.e., your supplier, etc.)
- Call your friends and colleagues.
- Advertise in local and state dental journals and newsletters.
- Advertise online.
- Have your office manager help you contact doctors in your immediate area to see if they know anyone.
- Sign up for an associate “headhunting” service (can be pricey).
- Contact residency programs in your state. Dental schools are also an option, but if you need someone who can hit the ground running from a production standpoint, you may have to deal with a learning curve.
If you outflow enough, you’ll eventually find someone who would be a good fit.
5. Interviewing your associate: How does the associate’s treatment philosophy match up with yours?
You are interviewing an associate prospect. The level of compensation, job description and hours will work for him or her. He or she seems like a nice person that would fit into the office. Now there are two things to look into: treatment philosophy and most important, clinical competency.
Divergent treatment philosophies between a senior doctor and his or her associate are the cause of more turmoil than you’d suspect.
How can you prevent this in lieu of having to work together for six or more months? Try this approach: During the interview with your prospective associate, take ten charts, along with accompanying x-rays and models (if there are any) and temporarily remove the treatment plans.
Now, ask the associate to draw up a treatment plan based on the information to hand. Match up the associate’s treatment plan with the treatment plan you made for the case. If they are relatively similar, you may have a good match. You could also describe a number of clinical scenarios and see what course of action he or she would take and see how that agrees with what you might do.
6. Are there ideas on how to determine if the associate is a “good fit” with your office and the staff?
Ultimately, the MOST important thing to consider with an associate is their level of clinical competence. To get an idea of where they are clinically you might:
- Have them treat you (even if it is a prophy, you’ll see their chairside manner and the like).
- Ask them to bring in models and pictures of cases they have completed.
If you feel you have found the right candidate, you could possibly have them treat you and some of your staff. If the team isn’t sold on them as a clinician they’ll be reluctant to have patients see the ‘new guy/girl’. You’ll end up just as busy as you are now while paying the associate to sit around because “none of the patients want to see the associate.” It’s a great ego trip but doesn’t move you in the direction of lightening your load or expanding the practice.
If you’re satisfied with their clinical criteria and go ahead with the hire, you should still check up on their work with your patients. Personally, I’d recommend that you watch things like a hawk until you are completely confident in their ability – and this confidence should be based on what you actually SEE.
I once had a doctor tell me that there was no way he would let his associate work on him. Excuse me?! They represent your office. Their treatment is your treatment! You are responsible for their work. And no one wants to be re-doing dentistry for free after a sub par clinician leaves the practice, not to mention the effect this has on your patients and practice.
These are a few of my thoughts on a subject that could easily fill a book. You might try these simple guidelines and get good advice from your advisors. Don’t forget though…in the end, the decision is ultimately YOURS. Choose wisely.
Dr. Greg Winteregg provides this general dental practice management advice to furnish you with suggestions of actions that have been shown to have potential to help you improve your practice. Neither MGE nor Dr. Winteregg may be held liable for adverse actions resulting from your implementation of these suggestions, which are provided only as examples of topics covered by the MGE program.
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