Why The Multi-Doctor Office?
What is it that most dentists want? Over the years I’ve heard the same things. Dentists want more money and time off. They work hard, care for their patients and treat their staff well. They just want to be compensated at an appropriate level for their efforts. They also want to feel like they are growing. It’s been said that if something isn’t growing then it’s dying. A practice stuck at a plateau and not moving anywhere has a sense of dying. The dentist feels like the investment in education, staff, marketing and technology isn’t giving the return expected.
The good news is in most cases the growth is there, it’s just not being realized because the doctor is limited. Limited in scalability. You see there is only so much a doctor can do in a given week by him or herself. Due to the limitations of clinic space and doctor availability a ceiling is hit. That ceiling can be broken if the restraints of a solo practice were lifted. Venturing into the world of group practice does require a change from how things are done in a solo office, but the transition can be smooth. Other than growing and avoiding the sense of “dying” why should one consider the multi-doctor office concept?
Why? Because the multi-doctor office can provide the owner doctor more income and more time off!
That’s a bold claim but it’s been proven at my office. As the dental industry has been changing the large, multi-doctor office is a viable approach in the current marketplace. The central idea is that if systems are in place dental services currently being provided can become scalable. That means more of what is currently being done in a single-doctor solo practice can be duplicated through other dentists. And, if this is done in one location the practice’s fixed costs can enjoy economies of scale. Additionally, since other dentists are in the office the owner doctor can have a more flexible schedule enjoying time off while patients are still getting taken care of. However, there are added costs and risks associated with a larger office and those will be address in this book.
But first, let’s look at the features of the multi-doctor office in more detail.
1. A large office has a high number of patients in its patient pool. That means on any given day there is a greater probability someone in that pool will need dental services. They may have a painful tooth, a broken tooth, a lost crown, an infection, a job interview and want their teeth cleaned or finally deciding it’s time to get a new smile. Everyday our office gets calls from existing patients who need us. Having such a large pool of patients has kept our schedule full throughout the years.
2. The more patients you have and if you treat them right the faster the practice builds through referrals. In todays social media society the word about a practice can spread quickly. Imagine the difference of getting 25 new patients a month to 150 new patients a month. Or, compare an active patient base of 4,000 to 11,000+. The social connections of all those extra patients spread and the growth of the practice builds upon itself.
3. There are economies of scale. Currently I have the equivalent of 2 offices under one roof. There are many solo practices with 1 doctor, 2 hygienists, 2-3 assistants and 2-3 front desk staff and 5 treatment rooms working 4 days a week. Most of those offices collect 75,000-90,000 per month. We are double the size but collect three times as much. Keep in mind I have associate dentists to pay and therefore my percentage of net might be less than the solo practitioner but the actual dollars of net is a lot more. These are not my real numbers but consider this example: having a gross of 1,000,000 a year with a 30% net (300,000 income) or 2,500,00 a year with a 20% net (500,000 income). The multi-doctor office will have a higher overhead in both actual dollars and percentage of collections but it’s the left over net dollars is what counts. I will insert a word of caution, because the larger office takes more money to run it’s critical that the office be run right in order for it to translate into a higher income. That’s covered in more detail later, so keep reading.
4. Having increased patient flow and revenue makes it easier to afford technology. For example, when it came time to get a new panoramic x-ray unit we could afford to upgrade to a pano/cone beam combination machine. If I were just by myself with a smaller office it would not make as much sense to pay extra for the more advanced technology. Digital intraoral x-ray sensors are expensive but the 5 we own get used quite a bit during the day. The same goes for other items like a digital scanner, laser or intraoral cameras. Besides the ability to financial exploit these pieces of equipment, it makes it more fun going to the office knowing I have a wide array of “tools in my toolbelt.”
5. Along with being able to justify the cost of buying equipment we can also afford stronger marketing campaigns. Of course the referrals we get are great but there is room for new patients from marketing. We’ve been able to send out mailers, donate to various charities, run ads on the radio and television, use SEO services for the website, use Google AdWords and many others. Thousands of dollars can be spent on various campaigns and we can compare them to each other and determine what works and what doesn’t. A smaller office will have a much harder time trying out the various forms of media. Or, if they do the actual time and dollars spent testing them will not be adequate to honestly evaluate their performance.
6. And lastly, it’s more fun to have another dentist or two in the office. It’s a chance to collaborate with another professional and talk about cases. Everyone involved can learn from each other. Associates at Cross Timbers Dental have contributed to making our systems better. They have valuable input about various clinical and administrative issues. Collectively the office is better because several sides of an issue can be considered before making changes. The office is better off for it.
