By Dr. Travis Campbell
It isn't often, but I occasionally get both the owner and the associate messaging me about the same thing. The associate is complaining that the owner isn’t providing enough work for them to do, and as a result isn’t getting paid enough. While conversely, the owner is complaining that the associate’s compensation package is higher than average and therefore doesn’t understand what the associate could possibly complain about.
They are not speaking the same language. Usually, neither party sees the bigger picture.
It all boils down to the importance of understanding what the other one wants/needs, as well as what you can do in your role to contribute to the win-win outcome.
Most full-time associates generally expect to earn approximately $150K+ per year, which is on average $12,500/month. If you have agreed to pay them 30% of collections/production, this means the office needs to have enough patients for the associate to generate $42,000 in potential collections per month.
So, you need to work this equation backward. In order to satisfy this associate and help him/her achieve this level of earnings, you either need to be providing two full hygiene columns of patients per dentist, or generating 50-75 new PPO/Cash patients per month per dentist.
The income generated by Medicaid and HMO patients is so much lower and therefore will need two to three times as many patients to reach the goals.
If your business is not generating this level of patient treatment or new patient activity, then you will naturally have challenges with any associate you might bring on board. Therefore, as the owner, you’ll need to analyze the situation and introduce some changes—more marketing, expanded hours, etc. And of course, as the owner, you need to provide coaching for your associate— how best to communicate with patients, present treatment in a way that increases acceptance, and how to be more efficient clinically. You also want to make sure your team knows how to effectively maximize insurance and collection rates. If that level of activity/collections isn’t possible, then you must ask yourself the question of whether your business can sustain a full-time associate.
This does not mean the problem is all on the side of the owner. As an associate dentist, you must make the most of the opportunity presented from patients you see. Associate dentists traditionally produce 1/3 less revenue than owner dentists from the same patients. The lower revenue per patient often comes from lower treatment acceptance, under-diagnosis, and not spending as much effort relationship building with patients. The reasons are often because associates typically do not invest as much into learning how to communicate with patients. As a result, an associate will often miss the potential treatment opportunity to help their patients the best way possible, which affects their own revenue opportunities. When one dentist has an average production per patient of $1,000 and another dentist has $400, there is a huge difference in their incomes.
The better you can communicate the concerns with the patient and how those concerns match the patient’s goals, the higher your treatment acceptance will be. Across the country, dentists range from $300 in treatment per new patient to well over $1,000. The dentists (owners or associates) on the higher end know how to quickly relate to patients, and educate the patient in a way that is important to them (which does not mean talking about treatments).
This isn’t necessarily about diagnosing more, it is about getting more of what you diagnose accepted—although if you are under-diagnosing treatment, that can impact it as well.
For both parties to meet their compensation goals, they must work the challenge together.
Owners: You should want to pay associates more money. Since associates are paid on a percentage, the more the associate does, the more the owner profits as well. Therefore, your job is to ensure there is both a strong flow of patients, as well as guidance or training opportunities for your associate in communication and leadership, treatment planning, education, and acceptance.
Associates: Your job is to develop relationships with your patients and team, link dental concerns to the patient’s values and desires, as well as effectively sell them on the benefits of prompt treatment. You want to be constantly learning how to be a better clinician (quality, efficiency, treatment acceptance, diagnosis, etc.) as well as how you can appropriately and effectively contribute to the level of collections for the business. Much of the level of income you earn is actually in your hands.
When the interests of both parties align, you end up with happy owners and happy associates. When the interests of either party fail, both sides are unhappy, and most often both sides are failing.
So, owners and associates, what are you going to commit to today to make the situation better for both of you?
Dr. Travis Campbell is a full-time practicing dentist. He has a passion for helping others avoid the typical dental business pitfalls and become highly successful business owners, CEOs and team builders. Dr. Campbell lives in Prosper, Texas with his wife, daughter, and son. You can reach Dr. Campbell at email: email@example.com