Practice Management

Retaining a Newly-Acquired Patient Group and Team to Justify the Significant Purchase Cost


Ron Weintraub


April 20, 2016

April 20, 2016

Prior to consummating the purchase of a potentially transitioning practice, due diligence requirements have to be performed. In addition, a full game plan needs to be in place to execute the changeover in a minimally disruptive and alienating manner. To accomplish a smooth transition, key human resource assets should be dealt with clearly from the start, involving the former operator/owner dentist and the key team players.

FUTURE ROLE OF THE FORMER OPERATOR/OWNER DENTISTThe future role of the former operator/owner dentist is usually prescribed in the legal Agreement of Purchase and Sale. Questions pertinent to establishing their involvement include the following:

What is the stipulated period of time that the previous owner, Dr. X, will commit to the future of the practice?

What is the understanding regarding the limits of Dr. X’s involvement with patients of record; for example, the necessity to turnover for treatment to the new owner a portion of his/her patients of record.

TYPES OF PRACTICES TO PURCHASEThere are two distinct types of practices to purchase: Type A – Highly personalized patient link to the former incumbent, and Type B – a location driven practice with patients who are comfortable seeing either the former owner or an associate. Our discussion is limited to Type A.

In Type A, careful planning should be incorporated in the process of distributing patients previously seen solely by Dr. X. This plan helps avoid transferring patients feeling as if they are being forced to move in the process and gives them the perception that this is now a totally different practice, thus causing them to reconsider their alliance. An effective strategy to combat this view is to work alongside the former owner to transfer the trust and goodwill that has been developed.

Oftentimes, the former owner stays on for a protracted period of time for as many days per week as desired; however, such a plan impedes the actual transitioning to the new owner’s style and philosophy of practice. Therefore, exercising caution helps avoid ending up with the practice containing too few patients being winnowed from the former owner/incumbent. Another reason to avoid the former owner’s excessive involvement is the proposed upgrades in treatment philosophy of the new owner being thwarted over time.

Prior to completing the purchase, an understanding should be reached to satisfy Dr. X’s needs while being actively engaged in working collegially to co-treat patients. Transitioning is often sensitive to the presence or absence of the former incumbent. The vast majority of the purchase price is justified by access to the previous patient base.

In a transition, it is not necessarily beneficial for the former incumbent to remain in a very active capacity indefinitely because there may not be enough patient flow to keep the new owner productive as well. The ideal context would be to have the practice operate as a true group practice with patients getting the benefit of each provider’s clinical strength; for example, formerly, patients were possibly referred out for endodontic, orthodontic, and implant procedures. If the new owner of the practice has a proficiency in any of these areas, it could result in a win-win scenario for patient and practitioner for patients to be treated in-house. The ultimate departure of the former owner should be handled very sensitively after a mutually respectful agreement.

ROLES OF LONG TERM TEAM MEMBERSLong-term team members also need to be included in the transition plan.

1. HygienistThe hygienist often has a significant relationship with long-term patients. It is important that the hygienist has a contract with a non-compete clause to protect the goodwill that the new owner has purchased.

2. Administrative PersonnelIt is a mistake to underestimate the impact of long-term administrative employees who have an affect on the transitioning patient population. They play a significant role in reassuring the transferring of loyalty and trust of patients to the new owner.It behooves the new practice owners to take time to explain their treatment philosophy in terms of how it is patient-focused and respectful of the treatment that patients have received over the years of their association with the practice.

3. Clinical AssistantsClinical Assistants can be a reassuring link to the former operation, and they can assure patients that the quality of service they will receive will not diminish in the new owner’s treatment plan. Despite caution having been exercised prior to purchasing a practice, patients’ expectations need to be met by the new owner to bring to bear a comparable skill set previously available in the practice.

The ideal transition is one that is minimally disruptive of patients’ prior rationale for entrusting their oral health to this facility. Defining roles of the former owner/dentist, hygienist, administrative personnel, and clinical assistants lead to a positive change.