20: About Associateships

Chapter 20

About Associateships

Richard S. Callan

The term “associate” can be used as a verb, adjective, or noun. As a verb it connotes the joining together of two previously separated entities. As an adjective it substantiates the connectivity of these separate entities while introducing the possibility of one being subordinate to the other. An associate (noun) is a fellow worker, a partner, or a colleague. It is important to recognize how all three forms of this word enhance our understanding of not only what an associateship is but how it is formed, how it functions, and if it can be considered a success.

For the purpose of this chapter, an associateship will be defined as simply the partnering of an owner-dentist with an associate-dentist. The associate, as implied by definition, is in some way subject to the owner, but the two are colleagues, with an agreement to work together in some way, shape, or fashion.

Types of Associateships

The types of associateships are categorized by the relationship between the owner-dentist and the associate-dentist. The associate is an employee, someone who will eventually buy into the practice, someone who will eventually buy the entire practice, or someone who is only renting space from the owner-dentist. It is important to note that these distinctions are made for the purpose of explanation and are not to be considered static positions. The employee may eventually buy into a practice or purchase the entire practice at some point in time. It is the initial understanding between the two parties at the time the agreement is made that is important to the “success” of the associateship.

Purpose for Associateships

The purpose of entering into an associateship agreement will depend greatly on the individual. Whether an associateship can be considered a success will depend on how closely the purpose(s) match the needs and desires of those entering into the associate agreement.

Owner-Dentist

What are some of the factors that would motivate an owner-dentist to seek out an associate?

Too Busy

Many times the dentist is so busy he or she cannot see all patients in a timely manner. Patients are calling every day with no availability in the schedule. Emergencies are becoming increasingly more difficult to squeeze into an already overloaded schedule. This type of situation can have great potential for success.

Wants to Slow Down

Many dentists reach a point in their careers when they decide they want to slow their practice down to a less demanding pace, yet not lose the patient base they worked so hard to create. This may be a good time to bring in an associate, if only on a part-time basis. Once again, it is imperative for both the owner and the associate to understand completely the specifics of the proposed arrangement. The owner must consider the impact the decreased hours of production will have on his or her income as well as the number of hours it will take to manage the new associateship. The associate must be clear on the number of hours to be worked and realize his or her responsibility to be as productive as possible in the hours allotted.

Has Space Available

A dentist may have additional, otherwise unused space within the office and wish to bring in an associate to generate income in that space. An independent contractor relationship would exist when an associate-dentist rents that additional space from the owner-dentist. The associate dentist is responsible for and makes all decisions concerning this portion of the practice. Otherwise, this associate-dentist would normally have to be classified as an employee. The main consideration in this arrangement is the equitable division of the new patients coming into the practice. Other considerations are staff utilization, equipment and supply costs, and hours of operation.

Transition into Retirement

Similar to the dentist wanting to slow down, many owner-dentists planning for retirement will bring in associates to transition their practice to them. Although generally accomplished over a period of years, this arrangement should be thought through well in advance and put in motion at a predetermined date. Depending on the desires of the owner-dentist and the needs of the associate-dentist, the associate may begin on a part-time basis and gradually increase as the patient load develops and/or the retiring dentist continues to decrease time spent in the office.

Mentorship

There are many dentists who have been practicing for a number of years and who desire to pass their experience and expertise on to the next generation of dentists. Their primary motivation for bringing in an associate is to do just that. The personal satisfaction they receive from assisting in the growth of the associate is in many ways greater than the monetary gain from their efforts.

Associate

Mentorship

A large number of new dental school graduates are looking for opportunities to become involved in a successful practice to hopefully learn from the experienced owner-dentist both technical skills and the art of operating a small business. As hard as dental schools try to work these skills into their curriculum, there is nothing better than on-the-job training guided directly by the tutelage of a private mentor.

Increase Speed/Confidence

If one lacks the confidence to strike out on his or her own immediately following graduation, it is a good idea to work within someone else’s practice for a period of time to help develop the confidence and speed necessary to be a successful sole practitioner. No matter how fast a procedure is completed, if it is completed incorrectly or with poor quality, it has accomplished little.

Make Money while Planning/Building a Practice

The average student debt upon graduation from dental school continues to rise for both public and private schools. Coupling this with an ever-increasing cost of setting up a practice from scratch makes the option of an associateship ever more attractive. The ability to earn money through the associateship allows the associate-dentist to not only decrease his or her debt but also save money for future professional plans.

Future Practice Partnership/Ownership

It is not uncommon for an associate-dentist to enter into an arrangement with an owner-dentist with the hopes of eventually buying into a partnership with that dentist or eventually purchasing the entire practice outright.

Not Desiring to Own Their Own Practice

It may never be the desire of the associate-dentist to possess his or her own practice. Such individuals may be content to practice their chosen profession without the burden and responsibility of all that is encumbered with ownership of a practice. This may be an individual preference and one definition of success and is no less valued than any other.

Advantages

The items listed previously under “Purpose for Associateships,” once accomplished, can at the same time be considered as advantages to both the owner-dentist and the associate-dentist.

Owner-Dentist

Increased Profitability/Expenses

By bringing an associate into an efficiently operating practice, the owner-dentist can expect an eventual increase equaling approximately 30% of the associate’s gross collections. The addition of the associate should be considered an investment into the practice, and like most investments, may require some time before dividends are realized. A reasonable amount of time should be allotted so that the associate can acclimate into the practice, develop a patient base for the associate, develop speed, collect on treatment rendered by the associate, and provide time for mentoring. This increased profitability will not be immediate but should be forthcoming.

More Operating Hours/Overhead

Expanding the business hours can help attract additional patients to the practice, resulting in increased productivity and profit.

Fewer Vacation Closings

The office can now be open when the associate and/or owner is either sick, on vacation, or out for any other reason. The practice does not stop unless both doctors are gone at the same time.

Less Emergency Coverage

The more doctors there are in the practice, the fewer days each has to be on call for emergency coverage.

More Free Time/Continuity of Patient Care

Having the associate in the practice can permit the owner the opportunity to be away for periods of time and still have the needs of the patients met.

Opportunity to Specialize Care

The owner-dentist may want to concentrate his or her efforts on a particular area of dentistry without losing the patients who do not require that type of service. The addition of an associate to perform those other services can allow the owner to devote additional time to that endeavor. Care must be taken not to abuse the associate by not providing him or her the opportunity to learn all aspects of dental treatment the practice has to offer.

Consultation and Fellowship

Dentistry can be a very rewarding profession. It can also be a very lonely profession. The inclusion of an associate into a practice gives both the owner and the associate the opportunity for some fellowship with an individual of like mind and interests. Not only can this be beneficial as a second opinion for difficult cases but it also can as a sounding board in time of need.

More Efficient Use of Employees

Many of the functions in a dental office are routine in nature and must occur regardless of the number of operatories or providers of care. Having staff members who are cross-trained and able to function in various areas throughout the office can be a huge bonus when an associate is added to the mix.

Purchasing Discounts

An increase in the number of patients seen in an office will likely necessitate a greater utilization of supplies and equipment. Many dental supply companies and manufacturers are willing to offer a discount when things are purchased in bulk. An increase in supplies purchased to accommodate for the increased patient flow may actually result in a decrease in cost per item, without the concomitant problem of long-term storage.

Meet Growing Demand

Many practices are unable to meet the demands of their growing population. The addition of an associate can provide opportunity to see these patients in a more timely manner.

Potential Buyer (Death, Disability, or Retirement)

The owner-dentist will likely be comforted by the fact that someone already associated with the practice is able to take over without advance notice. This is one aspect frequently overlooked within associate contracts. What is to happen if either the owner-dentist or the associate were to unexpectedly become disabled or deceased?

Associate

Initial Income Potentially Higher

An associate in a practice can probably expect to make more money initially than his or her counterpart starting a new practice. The reasons for this are obvious. He or she has no immediate business overhead and should have a source of readily available patients. Although someone purchasing an existing practice would have a patient base and immediate cash flow, there is the expense of purchasing the practice and the overhead of the practice that accompany that option.

Little or No Risk

This statement is only partially true. While there is little financial obligation in being the associate, there can be substantial professional risk. There may also be contractual stipulations restricting the associate from practicing in the area outside of the office(s) of the owner-dentist. This can be a difficult situation once the associate and family are established in the community, schools, faith organizations, and so forth.

Little or No Capital Outlay

Generally speaking, the associate has little financial obligation to the practice. Under special circumstances there may be provisions for the associate to purchase certain equipment. This is with the understanding that this equipment be allowed to leave with the associate or considered appropriately if and when the purchase into the partnership or of the entire practice is consummated.

Learn/Build Self-Confidence, Quality Skills, Speed

Without the initial burden of operating a dental practice, the associate is permitted the opportunity to concentrate on developing the quality skills, speed, and interpersonal acumen required for a successful practitioner. The desire to continue to learn and grow is one that should be evident throughout one’s entire career. In essence, associateships offer an “earn while you learn” opportunity. An associate may earn a living and at the same time see how the dentist-owner developed a practice that is successful enough to hire him or her.

Disadvantages

The dynamics within a dental office change considerably with the addition of a new associate, adding complexity to almost every aspect.

More Sophisticated Management

The addition of an associate into an already busy practice does not, in and of itself, make the practice run more smoothly. Metaphorically speaking, it is like the circus performer balancing the revolving plates on top of thin wooden poles. The inclusion of each additional plate only makes the task more difficult for the performer. The importance of the need for organization and efficiency in the office prior to the addition of another provider cannot be overemphasized, lest it all come crashing down.

Autonomy/Decision Making

All decisions made within the practice must now factor in the impact they will have on both the owner and the associate. The freedom for either party to act independently is greatly diminished.

Delay of Building Own Practice

One obvious disadvantage for the associate committed to an associateship can be the delaying of the building of his or her own practice. One compromise that can in some instances be beneficial for both the owner and the associate would be for the associate to work part time for the owner while setting up a practice somewhere outside of the noncompete area specified in the contract. This way the associate can decrease the number of days he or she works in the owner’s office as his or her own practice continues to grow. Honest, open communication is the key to making this sort of relationship successful.

Making the Connection

Making the connection between the owner-dentist and the associate-dentist can be a difficult task. How does an owner-dentist looking for an associate find just the right person for his or her practice? How does the associate-dentist locate the practice that best fits his or her needs? Beyond the obvious advertising in the local newspapers and the numerous internet resources, there are many other avenues in which this connection can be made.

Recruiting the Right Associate (Owner)

How does one find an associate once the decision is made? This can be a very difficult challenge. Whenever faced with a difficult situation, it is best to envision the perfect answer to the question. What does your perfect associate look like (be realistic)? Where can such a person be found? How can I make contact with this person? What will it take to get him or her to come to my practice?

Finding the Right Practice (Associate)

How does one find the right practice? This question is as difficult as the one asked by the owner looking for an associate. Let’s try a similar approach. What does the perfect practice look like? Where can such a practice be found? How do I get in contact with such a practice? What will it take to get into that practice?

The answers to these questions are quite similar for both the owner and the associate.

Dental Schools

A good place for an owner-dentist to begin looking for a potential associate is a dental school. This does not necessarily have to be the school nearest to the practice. As the clinical testing agencies expand their number of participating states and the expansion of states allowing for licensure by credentials continues to grow, many graduates are searching for opportunities beyond their state or region. Many schools handle such inquiries through their alumni affairs office. A number of schools have recently hosted dental job fairs where dentists are invited to set up booths promoting their practices to interested students. Through these meetings, acquaintances are made and conversations are begun that can potentially lead to the formation of an associateship arrangement.

Dental Supply Companies

Another popular method of making the connection is through the local dental supply companies. Many times these company representatives are the first to know of opportunities available in their area. The owner-dentist and associate-dentist both have access to this resource. The contact information for the prospective associate should be given to the owner-dentist so that a convenient time and place can be arranged for them to meet and discuss the potential associateship.

Practice Transition Specialists

The past few years have seen the emergence of the practice transition specialist. These individuals or companies promote their services to help make the connection and direct the transition of the owner to the incoming dentist, be they potential associates, partners, or purchasers of the practice. Recognizing the need for and the potential of this business opportunity, these specialists have evolved into providing services well beyond the simple matching of an associate to a practice. The range of services offered by these specialists differs depending on the expertise of the individual(s) and the desires of the dentist(s). These services may include the locating of the associate for the practice or the practice for the associate; the personality compatibility testing of the interested parties; the development o/>

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Jan 4, 2015 | Posted by in General Dentistry | Comments Off on 20: About Associateships
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