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    Top challenges of transitioning to a group practice

    Growing from a single office to a multi-location practice is no small feat.

    Growing from a single location to a multi-location practice is, understandably, no small feat. There are innumerable details that must be addressed, not the least of which is that the doctor endeavoring to pursue such growth must, at his or her heart, be an entrepreneur. In order to successfully make such a transition, there are a number of challenges that doctors must both be aware of and prepared to handle.

    Dr. Marc Cooper, DDS, president and founder of the Dentist Entrepreneur Organization, a national consulting and training firm in Portland, Oregon, and Dr. Roger Levin, DDS, CEO and chairman of dental practice consulting firm the Levin Group in Owings Mills, Maryland, offered their advice for those entrepreneurial dentists looking to expand from a single location into a multi-location DSO.

    Scalability

    Dr. Levin recommends a logical, step-by-step approach, starting with optimizing that first location into a smooth-running practice.

    More from the author: 4 things you need to do before expanding your practice

    “The first stage is to take the practice, before you start expanding, and systemize the entire practice,” Dr. Levin says. “It’s almost as if you are about to launch a franchise, except you are not. So, before McDonald’s started expanding, Ray Kroc actually built the first McDonald’s systems for maximum efficiency. One of the biggest mistakes dentists make is expanding into practices two, three, four and five, but they’ve never really created the process or systems for how the practice should run, which leads to inconsistency, inefficiency and breakdown.”

    Practice management systems are especially critical. While single locations have their own systems, Dr. Levin says they should be selected with growth in mind.

    DSOs“The system that often handles one, two and three practices often does not handle four, five, six or more” he says. “You want a system that can probably handle at least 15. Even if you never intend to get there, you want a system that allows for the communication, the integration to run all of the offices off of one platform. And there are systems out there that do that. I would also suggest you get a highly proven system, not something brand-new.”

    Once a well-organized practice is running, infrastructure supporting that expansion is necessary.

    “Phase two is then to put in place an infrastructure that allows you to grow without the pain that so many entrepreneurs go through,” Dr. Levin explains. “And that would include the following: Number one is professional management. Ninety-six percent of dental office managers have no management background. So, we tend to keep promoting the people who were good in one or two offices to manage four, five and six, and we run out of their competency. But we like them, we trust them, they’re reliable, they’re loyal, and somehow we misunderstand that that makes them competent.

    “Number two, you need to reproduce the systems from phase one into each office,” he continues. “You want every office to run in a very similar manner, if at all possible. Number three, you need to develop compensation models. One of the biggest mistakes I see, and we do a lot of consulting to small group organizations, is that they hire associates to work in the expanding practice, and they have a compensation model in the beginning that is really bad as they begin to expand. The compensation model you start with and can afford at the beginning, it’s not being incentive-based, it’s not moving people in the right direction, it leads to much higher overhead than the organization should have, and it’s very difficult to change people’s compensation and keep them employed.”

    The last part of phase two is to develop a vision. That vision, Dr. Levin says, is especially critical to the overall integrity and success of a DSO.

    “I think, in phase one, you are just trying to get everything organized,” he says. “By the time you start expanding, you need a vision of where you want to go. Do you want three, six, 20 practices? Because you can’t build a strategic plan without having a vision. In other words, every entrepreneur who reaches phase two needs to have a strategic plan. But that cannot happen until there’s a vision of what you want to build and what you want it to look like.”

    Trending article: Are the DSOs really taking over?

    The final phase brings everything together and involves centralizing administration and practice management systems that affect each site.

    “In phase three, you need to have centralized functions,” Dr. Levin says. “Centralized scheduling, centralized staff training. You want to get away from the on-the-job training; you want to be able to train the team as you want the job done. Centralized recruiting – you want to outsource. Outsourcing is fantastic. There’s not a lot of difference between hiring a recruiter or using an outside recruiting firm. There’s not a lot of difference between hiring a trainer and using a training firm. There are differences, but if you don’t want to engage all of this in your organization, then you can outsource it to the expert firms to help you.

    “You want to begin to build centralized functions around how the practice operates certain administrative functions like HR, recruiting and ordering supplies,” he continues. “By this point, you’ll be negotiating, but somebody has to do the negotiation on an annual basis and bid out contracts. You may want a call center for your scheduling, at that point.”

    He warns that each of these phases is critical to the success of a burgeoning DSO.

    “The biggest mistake you can make is to skip a phase,” Dr. Levin says. “Because if you skip a phase, you’re going to spend a lot of time and money backtracking and trying to catch up.”

    Continue to page two to read more...

    Robert Elsenpeter
    Robert Elsenpeter is a freelance writer and frequent contributor to Dental Products Report and Digital Esthetics. He is also the author ...

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