Have you ever heard dental partnerships being compared to marriage? Well, hiring a partner for your practice is actually harder than marriage, believe it or not. Both of these scenarios are significant and require commitment, trust, and respect, and it goes without saying that communication is key. They both require that each party involved have mutual understanding and goals toward spending and budgeting. You’ve probably heard the statistic that half of all marriages end in divorce. Well, an article published by Forbes states that nearly 80% of dental partnerships end. But it doesn’t have to be this way for you and your practice. That’s why today on the blog, our dental consultants share tips on what it takes for dental partnerships to be successful.
If you’ve found yourself on our blog today, you’re probably already considering a dental partnership or hiring an associate dentist to share the responsibilities of your practice and profits. A dental partnership is more than just two dentists working together in the same building. There can be legal ramifications for both parties should one doctor enter a malpractice lawsuit, which is why it is essential to create a dental partnership agreement when hiring an associate dentist. That’s why a written partnership agreement is key in establishing the ground rules when hiring an associate dentist.
The written partnership agreement should include the responsibilities of each dentist, as well as the following factors:
- Clarity of the rights and obligation of each dentist
- Eliminate ambiguities about how the practice will operate
- Set ground rules for the valuation of the practice, should one decide to leave or retire
- Determine each partners’ rights to exit the practice or hire additional associates
There are also other specifics you should consider including in your dental partnership agreement.
The Purpose of the Dental Practice
This is where you define the purpose of the associate, not just by stating something broad or vague like “dentistry.” This could leave you open to liability for other actions conducted by your partner. This section of the agreement could include verbiage outlining expectations of your partner’s activities relating to the practice and whether or not he or she can leave and open up another one as competition.
Rights, Duties, and Covenants of All Dentists
This section of your agreement should outline how much the partner will be working, who is ultimately responsible for managing the practice, how business and clinical decisions should be made, or other factors you deem necessary to cover in your agreement.
How Patient Records Should Be Handled
Be clear about who retains rights and ownership of patient records, and ensure that each partner complies with HIPPA or any other local, state, or federal laws pertaining to patient confidentiality or record keeping.
Capital, Investments, and Losses
You may want to solicit the assistance of a CPA to outline the specifics of how much each partner is to invest and how capital and losses will be distributed. There is no magic number or percentage when figuring this distribution, but should be fair and in line with the partner’s investment percentage.
Sharing of Expenses
You may wish to split expenses based on ownership percentage. Although splitting costs based on production and ownership percentage seems fairer for all partners. A 50/50 model may not seem that fair, especially if one dentist primarily sees patients for treatments that result in a higher expense for the practice, while another may not.
Handling Hygiene Revenue
There are different ways you could handle hygiene revenue distribution. One method is to split this revenue based on each partners’ production or based on which dentist performed the exam or made the referral. However, the latter option could cause misunderstanding and competition among partners.
Is it time to hire a partner?
Only you can decide whether the timing is right to hire an associate dentist.
But here are common reasons why a dentist may consider hiring an associate.
- Helps keep you motivated
- Allows for mentorship opportunities
- Partners help a practice expand and grow
- Could help you focus on expanding additional services that may interest you
- Having a partner helps cover overhead expenses and manage the business while you’re away
- An associate dentist may bring qualifications and experience that you lack that could benefit patients
How to Hire a Dental Practice Associate
Just because hiring a dental practice partner sounds scary doesn’t mean it is. With the right guidance, the transition will be smooth and hassle-free. The most important aspect to know is that you must spell everything out in writing and ensure each partner understands what they agree to. To ensure you do not miss important details that could, later on, come back to haunt you, reach out to our top consultant, Hollie Bryant, by calling (877) 768-4799. Hollie brings more than a decade of experience as a dental practice consultant, helping dentists through various types of transitions and changes.
