Associateships: A Guide For Owners and Prospective Associates

The Associateship publication is published by the ADA and is in revision! I am pleased to once again have the opportunity to help develop the updated text for the publication. I have been a co-author on the publication for each of the revisions, 1992, 1996, 2001, 2005 and now in 2013.This is a wonderful resource for both owners and those entering practice as an associate with discussion on important planning topics, compensation worksheets and illustration agreements. It is great to have the opportunity to revisit the material and update it! I’ll keep you posted!

The Reactive Doctor CEO

One of the worst leader profiles we see is the Doctor CEO that does not think! Too often Doctor CEOs in the midst of the day-in and day-out practice demands deals only with that days’ demands. Can’t really blame them except when it goes on for months, even years. There are such significant penalties for leading in a reactive way! Here are some I have seen: being reactive means no continuity for staff to understand what is done or why, reactive means no plan for execution by the team and being reactive causes a buildup of messy loose ends causing the leader to run faster and grapple with ever more items. In short, this management style can put the doctor underwater in a big way! We strongly encourage that doctors lift their sights at this time of year and participate in planning the objectives of the practice into the next 2-3 years. It can be a great relief for everyone involved to stop being reactive and move to planned action.  When you are ready to state with clarity your practice vision and move to implementation consider our Doctor CEO Practice Planning Day.

Don’t Wait Around

No doubt many doctors are finding their practice performance less than desired, after nearly five years of a difficult economy. Yet, I continue to come across and consult with Doctor CEO’s that are positioning their practices aggressively and achieving significant performance. As one doctor said to me recently, “I can’t just wait around for an economic turn around!” What specifically is this doctor doing? Well, here is a taste of the items. First, the practice has narrowed its focus over the last few years and strives daily to be lean and efficient. Second, every aspect of the practice is performing based on stated objectives that are time bounded with a responsible person tagged to make the objective, whether marketing, collections, or personnel or whatever happen. Third, the objectives are part of an annual plan that is broken into quarterly performance units. Take a page from this doctor’s play book, Don’t Wait Around for things to change, act now and implement your planning! See our Smart Doctor CEO Interactive Coaching Newsletter web tools to help you implement your plans.

The Path to Growth and Profitability

Several doctors have inquired lately how they can quickly jump start their practices. They feel the limpness of the first quarter and fear it will be the same for the balance of the year. They all stated they need to make up for the last couple of slow years and want growth now. I discussed that there are always some steps that can be taken to increase momentary growth. But that was clearly not what was wanted, they wanted continued and sustained growth. Even more, when probed, they wanted to have profitability improve. I related that practices can set the stage for sustained growth when they operate from a well conceived strategy, based on a realistic vision for the practice, including budgeting appropriately for marketing (all flavors today from traditional PR {see Public Relations, Writing The New Releaseour new Special Report} to social must be considered given the practice and demographic). Each one of those points must be broken down and applied to the specific doctor(s) and practice. Profitability, on the other hand, in my view requires a careful analysis of each fixed and variable expense category and tying it to the real needs of the practice – not the needs of the doctor. This is a critical point that is often missed, profitability can suffer when decisions about what is needed in a practice are only weighed against what a doctor or group thinks they need Vs what is needed to maintain a practice for a given time horizon.

A Reactive Vs Proactive New Year

Right now Doctor CEOs are involved in planning out their initiatives for 2012. We are in the midst of helping a number of those doctors as they seek to guide their practice growth, development, and profitability. Doctors that look out at the next year and largely anticipate that it will be more or less what the current year has been miss, in my view, the opportunity to cast their practice as they deem appropriate. In our planning sessions, we discuss in some detail how the “more of the same” thinking can be seen to be a type of reactive planning. We try to encourage, rather than a reactive approach, a more systematic look at performance and profitability in a proactive approach. Our experience is that when Doctor CEO’s see the broad picture, understand how they can mold that picture given certain benchmarks they then routinely focus their time, energy and resources and achieve excellent results. Our best wishes to each of you and may you secure the results you seek in the New Year!

Good Ideas Are Often Just That

Here at Berning & Affiliates we are very involved in year end and next year planning for doctors. It is amazing how many of our clients come to the meetings and talk about ideas they or staff or a spouse have for the practice but not done much to move forward. One new doctor client said, after going though our Doctor CEO Practice Planning meeting, “It is no wonder many of my ideas in years past did not happen – there was no step by step planning and even less implementation!” Doctors often have great ideas to help advance their practice, but an idea is just that if it is not evaluated, tested and if appropriate, put through a rigorous planning process and then implemented.

Refining Requires Rethinking

Talking about the state of their practice with a group of doctors that are considering a new second location one of the doctors said "We can just use the same systems and set up as we use in our current practice." Another doctor said, "But the practice we are considering opening will be in slightly more than 50% of the space of the first, so we will not need the number of staff." A third doctor said, "I don’t like all the things we do in our current location, really it is just routine at this point." The last comment proved to be the point of departure for the group to rethink what and how they were administering the current location and how they might want to manage staff, market and seek profitability with the anticipated new location. For me it was a most positive development, serving to highlight for these doctors the fact that practices evolve and need refining and rethinking to be at their best. Any Doctor CEO can learn from them.

To Bonus Or Not

A perennial topic over the years is the question of whether a Doctor CEO should consider a bonus to incentivize staff. Many advisors to dentists on practice management have staked out positions pro and con. I have helped numerous doctors develop formats for bonus plans, some well received by staff and others less so. But there has always been something missing in the debate about whether or not to offer a bonus or any other reward, a good study. Now there is a report of a productivity based study using a well developed structure, a control group who got no incentive for their work, others who received a wrapped gift and a third who received a financial reward. You can read the preliminary report at Behavioral Economics Perks and Productivity, in the Weeks in Ideas column by Christopher Shea, WSJ 9-17-18,2011. The bottom line for doctors is that “Workers who got the gift were 25% more productive than a control group who got nothing, while the “cash” group’s productivity boost was statistically insignificant.” Mr. Shea indicates that there is a full report coming in the future titled “Currency of Reciprocity – Give Exchange in the Workplace”, Sebastian Kube, Michel Andre Marechal and Clemens Puppe, American Economic Review.

Demonstrating Value

One of the most interesting topics to come up in a recent consultation is how a practice in the midst of these difficult economic times can show patients value. In the article, As Middle Class Shrinks, P&G Aims High and Low, WSJ 9/12/2011 the following is observed. “In the wake of the worst recession in 50 years, there’s little doubt that the American middle class—the 40% of households with annual incomes between $50,000 and $140,000 a year—is in distress.” For many dentists and dental specialists this segment is a major part of their practice and most of this group are looking to make value based purchasing decisions. Doctor CEOs are well advised to be attentive to presenting the value of preventive dental care as a foundation for all of the patients health care. But whether addressing prevention or restoration or orthodontics or periodontics or any other aspect, it is essential for the doctor and key staff to think about and express what the purchase of that care will mean for that patient. Now more than ever, it is essential for doctors not to assume anything regarding what a patient knows and to instead state and discuss how the investment in care is worth more than the payment for the service.

Snap! I Got That!

This past weekend I spoke on Smart Start Transitions at the Wired For Success Midwest program in Chicago for orthodontic residents. It was a great group of younger professionals that are on the verge of starting their careers. However, many mentioned on the break, at lunch and at dinner that they have had little to no information in their programs on practice transition. A big concern, reflecting the current economy, was the financial aspects of any transition. I indicated there are many transition resources on our web store and particularly the cash flow tools to assist doctors, including those for Associate Compensation, Practice Purchase / Sale Analysis Worksheet, Practice Sale or Buy-in for 1 or 2 buyers. At lunch one of the doctors said, “Snap!” Meaning, I now understand, that this was great information!