I worked in a few different practices after I graduated residency. One was a very successful, fee-for-service practice that I had hoped to purchase after the dentist retired. In the end, the dentist sold it to someone else who proceeded to run it into the ground in three short years. I left the office a few months after the transition, but I watched with morbid curiosity as this new owner dentist continued to make bad decision after bad decision. I recently learned that he sold the office to Heartland Dental, which I would imagine would be due to him not being able to pay off his debts.
So how did this guy turn a success into a failure in three years? Here’s my assessment of what he did wrong…
(1) Don’t piss off the old staff
Buying a practice with a loyal patient base is a beautiful thing. But make no mistake; the patients are not loyal to the new buyer. Patients return for their care because they love the selling dentist, the hygienists, front desk, and assistants. One of the worse mistakes a buyer can make is to lose team members who have been with the practice for a long time. Don’t fire them and don’t make it unpleasant for them so that they want to quit. When they leave, patients will follow. I advise young buyers to interview the existing staff before the purchase to see if everyone will get along after the transition. If key staff are going to be an issue, it’s enough of a concern to make me walk away from the deal.
(2) Don’t change the practice model
The original owner had built a boutique general practice. He did a lot of cosmetic work and oral conscious sedation. He referred a good amount of work to the specialists in the community. A new owner could make some tweaks to this model, such as introducing more implant reconstructions, but major changes are not a good idea. In this case, the new owner kept all work in-house, including all surgical procedures and even full-banded ortho. Cutting off the referrals was confusing to many patients. Think about it: a woman has seen Dr. Oral Surgeon for her kids wisdom teeth extractions and an occasional procedure here and there. Now she’s told that an extraction and implant should be done with this new owner. Yes, some patients liked being able to stay in one place for all of their procedures, but many more of them didn’t like the radical change in how their care was delivered. They didn’t know the new dentist and it appeared as if he was being greedy keeping the work to himself.
On a related note, the new owner also required the hygienists to up sell his services. Patients with minor crowding of the mandibular anteriors were supposed to be told that their teeth would eventually fall out from periodontal disease unless they got Invisalign. Aside from the myriad of ethical concerns this raises, the hygienists hated it. They cared for the their patients and were upset that they now had to present treatment they didn’t believe in. You can imagine that the patients weren’t so thrilled either. People know when they are being sold something. The dental team should present solutions to oral health problems, not sell.
(3) Don’t change the fees right away
A new owner dentist can certainly update some fees that are out of date, but it shouldn’t be done immediately. Right after the transition, patients will be wary of the new dentist. They wonder if their beloved practice is going to change for the better or the worse. Spiking up the recall fees $50 will give them a concrete piece of evidence that things may have changed for the worse. If you’re going to raise the fees, I recommend waiting at least a year so that patients can come in and meet you for a couple of recall cycles. In the case of the terminal practice, the new dentist actually raised the fees so much that he was charging more than what the specialists would charge.