I have had more questions in the last month from doctors about whether or not they should hire a specialist and how to pay them if they do. The inquiries and questions always start with: “Have you ever brought in a specialist to work in your practice? How did you pay them?” The answer is yes, and I have paid them several different ways. I can also admit that I made a few mistakes in the process. Let’s take a look at the process and finally end with how you pay them.
- Are you a “specialist ready” practice? This brings to the surface why you would even consider a specialist in a general dental practice. I would suggest that as a general dentist you should strive to do most of your endo, selected ortho cases, minor perio, and most of your oral surgery. If you are one of those doctors that only wants to do crowns and simple dentistry, you are in the wrong occupation if this is your business plan. You are likely to find yourself struggling to pay the bills. With more competition and less demand for dental services, each of us face the uncomfortable fact that the educated consumer that we must attract and keep in our practice now demands that we supply the services they need and want in our own office. They don’t want to go miles down the road for a root canal, and to a periodontist for an implant, etc. The successful practices of the future will be a one-stop shop where almost every service is done in-house. Keep in mind that if you bring in an orthodontist, you will need to have enough demand to keep an orthodontist busy for at least a day, or about 10-15 patients every month. The same can be said for any other specialists you are considering. There must be sufficient demand before you bring them in. Secondly, there must be sufficient physical capacity (facility and staffing) to accommodate them and your busy schedule.
- Why would a specialist want to work in your office? If you have a specialist wanting to work in a general practice, you need to understand that if they could make it on their own they wouldn’t want or need to work in your office. The question then is: Why were they not successful in their own venture? You need to ask yourself: Will this specialist add to or detract from our own successful culture? The reason they are moving in with you is that they need you more than you need them.
- Contracts: You will need to create an independent contractor agreement with the specialist. They should not be considered an employee. This contract should address indemnification for you, how they will be paid, schedule, office protocols, and what is supplied by you and what is supplied by them. This contract needs to delve into non-compete agreements, and the legal description of how the agreement will be terminated for cause and without cause. It is a mistake to think that you can throw something together off the Internet and have it serve you as a sound contract of employment as an independent contractor. For attorneys, contract law is like biology and chemistry is to us. We have had a lot of it, remember some of it, and with enough time we can find information concerning it that we have forgotten or don’t know. Great contracts create remedy for any potential problems you might run into. The challenge will be that you will not know you have a great contract until the problem arises. Then it is too late. You need to make sure you have a competent attorney who can draft a great health care contract that protects you no matter what happens.
- How much should you pay? That depends on what you are supplying and how much it interrupts your ability to continue to work in your office. Ideally, the specialist should be responsible for supplying their own supplies and staffing needs. In that case, you can expect to pay them about 50% of what they do. While we are talking about pay: If it is in the form of a percentage, keep in mind that it should not be a percentage of production. It should only be a percentage of collections. You can’t pay what you don’t collect. In this situation, I would want them to use the practice software and we bill the patient after the specialist fills out and files the insurance. This keeps all the numbers and follow-up in line with the systems in your office. I have a friend that deals with about 100 specialists for their accounting needs. In his group the overheads for each specialty are as follows:
- Endodontists: 39.8%
- Oral Surgeons: 51.4%
- Orthodontists: 62.9%
- Pediatric dentists: 52.2%
- Periodontists: 9%
NOTE: Most specialists are going to want you to pay them about 50% of what they do, yet most of these specialists don’t or can’t make that percentage in their own practices. Yes, you get money for a procedure that most often you could do yourself, but because you refer it out you feel you need to recapture that lost income through a third party. I would argue that you deserve more. This would be especially true if you market their services, need staff to service them while they are in your practice while taking on the risk from litigation and financial liability along with your reputation if this does not work out well. Don’t forget that you supply the patients that they themselves were not able to attract, in your office that they couldn’t afford, using staff they don’t have, while all the time trading on your reputation with the patient. Think long and hard about a fair deal for both of you in the light of your business strategy. Specialists that are associates in an owner specialist’s office are paid an average of 37%-43% depending on the specific specialty.
- Hours or schedule: It is easier on your schedule if they could work a day you are not there. From a culture standpoint, you probably want some oversight, so having them work on days you are there ensures that you have your hand on the pulse of their practice as well as your own. There are positives and negatives to both approaches. Think this through before you sign your contract.
- Termination of the relationship: Consider your state board and the legal considerations of abandonment. This is especially true in Orthodontics. Be clear on who is responsible for finishing the treatment, as well as who fixes what the specialist messed up. Yep, specialists tend to have failures just like everyone else. An upset patient that comes to “your” practice for a specialty procedure feels “you, the owner”, are responsible for the results and their satisfaction even though a specialist treated them. What happens when you or they terminate the contract? Great contracts as well as strong communication and a crystal-clear discussion of all of these points are super important. This specialist is the face and voice of your practice as he or she delivers services to patients in your office. Make sure you know how the patients feel about the experience.
- The comment card: This is an easy way to make sure the patients being treated by you or the specialist have an anonymous way to give you feed back. Click this link to see a copy of the comment card.
As you can see, this is big step when you open your office and expose your patients to an in-house specialist. Take the time to get it right. This is how you Summit.
Michael Abernathy, DDS
PS. Ever wonder why I sign off these articles with my personal email and personal cell number? I want you to reach out, call, start a dialogue and consider what you can do now to grow and preserve your financial future. There is a way and it begins with a call and a frank discussion of where you are and where you want to be. That is how you Summit.