Practice Matters Location Location Location | American Dental Association

Practice Matters: Location, Location, Location

Tips for deciding where to practice

The cost of preparing for a career in dentistry means stakes are high after graduation. Yet new dentists often are unaware how their choice of a practice location can influence their professional goals and ultimate success until it’s too late. A poor choice will be more than a learning experience. It can lead to hardships that postpone or even prevent success.

“I’m always surprised how frequently dentists go on gut instinct” when deciding where to practice, says Jayme Amos, author of “Choosing the Right Practice Location,” published in 2013. Mr. Amos has been assisting dentists with their practice transitions for more than a decade.

“Companies like Starbucks or even the local gas station do extensive research before planting their flags,” he notes. “Dentists, who have much more to lose and need higher annual revenue, often make blind decisions based on instinct rather than proven strategies and applied knowledge.”

He isn’t alone in this observation. Christine Taxin is an adjunct professor teaching graduating doctors in the College of Dentistry at New York University. She says young dentists often are inclined to neglect due diligence when it comes to selecting a location.

“They can’t wait to get out there and begin practicing,” she says. “But the cost of starting without the right information can be the loss of the practice.”

Both experts say targeted preliminary research and a solid business plan are necessary for new dentists hoping to secure a location that can promote the success they envision.

A wide range of factors contribute to a sound decision on practice location.

Demographic detail is among them. “Everyone knows demographics are crucial to the success of a practice, yet few know which metrics matter most to success,” says Mr. Amos, who estimates the necessary population-to-doctor ratio at 2000:1.

The author and consultant helps dentists investigate details within the patient demographic that matter most — age, employment, income and others — and then correlates that data with the dentist’s personal business plan.

“First, a dentist must decide what kind of patient population is desired,” he says. “Any long-term chairside satisfaction depends on choosing a demographically supported location to match that decision.”

Demographic details lead to information about patient insurance reimbursements, another factor in deciding practice location.

Mr. Amos says all dentists are aware of the expense that comes with dental benefit plan write-offs, but few recognize the wild fluctuations in reimbursement rates in nearby regions.

“Some of my clients write off as much as 45 percent of their production, and others, just a few miles away, have insurance company write-offs of only 25 percent,” he notes.

Ms. Taxin recommends investigating a practice location by drilling down into the zip code. “Dentists who know the median household income within a zip code can realistically determine their fee schedule,” she says, adding that she believes such information is useful for dentists in any practice situation.

“Solo practitioners can use income information to determine if the insurance plans in the area will reimburse at an acceptable percentage,” she says. “Dentists in groups who are paid a percentage of collectible dollars can get a better idea of what their paycheck will be based on their production and what accepted insurance companies pay within that zip code.”

Ms. Taxin helps dentists determine a fee schedule within the 40th to 95th percentile in any given zip code. “New dentists in particular have to remember that it’s not what they’re producing, it’s what they’re collecting that matters,” she cautions.

Newer dentists also may think of their current employment situation is temporary, without realizing its potential long-term implications. Non-compete provisions in employment contracts at both small and large practices bar dentists from quitting and practicing nearby for a defined number of years after employment. The situation may have a greater impact on dentists working in a group practice.

Mr. Amos notes that non-compete clauses generally don’t allow dentists who leave the group to work within a five-mile radius of the practice location.

“Dentists can avoid getting locked out of their dream town by knowing where they want to be down the road and understanding how the non-compete clause they’re signing today might affect that goal,” he says.

Our consultants

Arlene Furlong is a Chicago-based freelance writer specializing in dental topics and a former ADA staff member. She can be reached at arlfurl@aol.com.

Jayme Amos is a dental practice consultant specializing in ownership success. Products and service information is available at www.howtoopenadentaloffice.com. Mr. Amos can be contacted directly at jayme@howtoopenadentaloffice.com.

Christine Taxin is the founder and president of links2success, a practice management consulting company to the dental and medical fields. Resources and a list of services are available at www.links2success.biz/about-us.html. Ms. Taxin can be contacted directly at ctaxin@links2success.biz.