The Options Available for Entering Dental Practice. Immediate income needs. Financial resources available. Current debt status

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Doris Thomas
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1 Chapter 2: The Options Available for Entering Dental Practice Following the completion of dental training and the earning of a dental degree, dentists are faced with deciding how they will enter into dental practice and begin their life s work. The profession, today, provides a variety of options for the new dentist. This chapter provides a brief outline of information about these varied options and some factors to consider when deciding which is best for you. The option eventually selected is, obviously, an individual decision that will be based upon the individual needs of the dentist, the local marketplace conditions and the options that are made available. This section is aimed only at providing a general overview and does not represent an attempt to provide an exhaustive discussion of the subject and the individual considerations that will apply. The options available for entering dental practice Establishing a solo private practice Establishing a group private practice Employment as an associate with practice equity Employment as a clinical associate without practice equity A private dental practice An institutional practice (hospital, HMO) A Dental Management Service Organization (DMSO) Industry A governmental agency (military, Public Health Service) Non-clinical practice (education, insurance, dental administration) Points that should be considered in deciding which practice option to select Most important personal preference Short term goals versus long term goals Immediate income needs Financial resources available Current debt status Market under consideration; the length of time projected to develop a new practice in that market Develop a new practice or buy an existing practice The degree of practice management involvement that is acceptable The degree of independence desired The income curve as an employee: typically higher level at start, probable lower maximum as an owner: typically lower level at start, probable higher maximum Entrepreneurial spirit Opportunities available In summary: know yourself know your goals know the local market know your resources The profession, today, provides a variety of options for the new dentist. 17

This chapter provides a brief outline of information about these varied options and some factors to consider when deciding which is best for you.

2 The potential advantages and disadvantages of each option ESTABLISHING A SOLO PRIVATE PRACTICE Highest level of control over all aspects of practice Highest potential income over practice life Practice an asset at retirement Able to reach one s potential Greatest financial risk Must manage all aspects of practice Slowest financial start Maximum personal responsibility Need for large amount of initial capital; probable debt 7/24 patient coverage ESTABLISHING A GROUP PRIVATE PRACTICE High degree of control over all aspects of practice Sharing of financial risk Sharing of initial capital investment Sharing of management responsibilities High personal income over practice life Buy-out provisions at retirement an asset Shared 7/24 patient coverage More cost effective when incoporating new technology High financial risk Sharing of financial gain Considerable involvement in management of all aspects of practice Need for significant initial capital investment; probable debt Slow financial start Need for a large patient pool Changes in ownership may cancel personal Regimentation and inflexibility may stifle creativity and 18

of initial capital; probable debt 7/24 patient coverage ESTABLISHING A GROUP PRIVATE PRACTICE High degree of control over all aspects of practice Sharing of financial risk Sharing of initial capital

3 Potential advantages and disadvantages EMPLOYMENT AS AN ASSOCIATE WITH PRACTICE EQUITY Less management responsibilities Immediate income and benefits Can increase wealth as part owner over time Buy-out at retirement or leaving the practice Reduced financial risk Little or no initial capital requirements Paid continuing education Long time to gain significant practice equity or ownership Less control over practice affairs Need for capital at buy-in stages Considered as an employee initially Any limitations imposed by employment agreement Potential conflict between patient care and practice philosophy of practice owners Potential interference with dentist-patient relationship Changes in practice ownership may cancel personal Regimentation and inflexibility may stifle creativity and EMPLOYMENT AS A CLINICAL ASSOCIATE WITHOUT PRACTICE EQUITY PRIVATE DENTAL PRACTICE Immediate income, perhaps benefits No financial risk No initial capital requirements No management responsibilities Reduced patient coverage responsibility Opportunity to learn practice management Perhaps opportunity to establish practice equity and ownership Strictly an employee Little control over practice affairs Potential conflict between patient care and practice philosophy of practice owners Potential interference with dentist-patient relationship Changes in practice ownership may cancel personal Regimentation and inflexibility may stifle creativity and Unlikely to have a retirement plan or other benefits 19

Less control over practice affairs Need for capital at buy-in stages Considered as an employee initially Any limitations imposed by employment agreement Potential conflict between patient care and

4 Potential advantages and disadvantages AN INSTITUTIONAL PRACTICE (HOSPITAL, HMO) Immediate income, usually including benefits No financial risk No initial capital requirements Shared management responsibilities Reduced patient coverage responsibilities Usually have a retirement plan 9 to 5 type job Considered to be an employee Little control over practice activities Potential conflict between patient care and philosophy of the institution Potential interference with dentist-patient relationship Changes in institutional ownership may cancel personal Regimentation and inflexibility may stifle creativity and DENTAL MANAGEMENT SERVICE ORGANIZATION (DMSO) (A PRACTICE MANAGED OR OWNED BY A DMSO) Immediate income, often with benefits No financial risk for the practice No initial capital investment Assistance in paying student debts, perhaps Less management responsibilities Reduced patient coverage responsibility Opportunity to learn practice management, in most cases Strictly an employee Less control over practice affairs Potential conflict between patient care and profit motive of non-professional investors Professional security reduced because of short term employment contracts Potential interference with dentist-patient relationship Changes in DMSO ownership may cancel personal Short history of DMSOs in marketplace 9 to 5 type job Reliance on distant management may be a problem if communications are not efficient May offer company stock as incentive or compensation Company may pay for continuing education Relocation by transfer easier in national companies Regimentation and inflexibility may stifle creativity and 20

between patient care and philosophy of the institution Potential interference with dentist-patient relationship Changes in institutional ownership may cancel personal Regimentation and inflexibility

5 Potential advantages and disadvantages INDUSTRY Very similar to institutional practice Very similar to institutional practice A GOVERNMENTAL AGENCY (MILITARY, PUBLIC HEALTH SERVICE) Very similar to institutional practice Retirement plan payments begin after relatively short time of practice Can be clinical or non-clinical activities Exceptional continuing education benefits Loan repayment option Less control over practice affairs / lower income v. private sector Potential interference with patient care and fiscal goals of the agency Potential interference with the dentist-patient relationship Changes in government policy may cancel personal Regimentation and inflexibility may stifle creativity and Usually requires frequent relocation, often to less desirable locations Management responsibilities usually increase over time NON-CLINICAL PRACTICE* (EDUCATION, INSURANCE, DENTAL ADMINISTRATION) Immediate income No financial risk No initial capital investment No clinical Patient contact Lack of independence Reduced potential earnings Management responsibilities *Please note that many faculty members may teach in the clinical areas and may have a faculty practice. 21

option Less control over practice affairs / lower income v.

6 22 The American Dental Association provides recent graduates with the information they need to launch successful careers: visit Information to Guide the New Dentist, on ADA.org for information on ADA membership benefits, practice location issues, income and expense demographics and managed care and contractual agreements are among the topics covered in this feature, along with links to a host of online resources. Find it at de/newdent/index.asp.

org for information on ADA membership benefits, practice location issues, income and expense demographics and managed care

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