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So you want to be a practice owner…someday: Solo or group practice, which is right for you?

Editor’s note: This is the first article in a summer series of New Dentist Now blog posts on practice ownership.

It can take significant introspection to determine whether you’re best suited for a solo practice where you run the show, or a group practice with two or more dentists taking direction from an individual or corporate owner.

Wells FargoIn general, the solo practice may offer more income potential – you do not have to share profits with partners, and you have greater control over your overhead. However, joining a group practice may give you greater stability with a more predictable salary and lifestyle, and more flexibility as work can continue to be performed when you are away from the office.

It’s up to you to determine which type of setting is most likely to fulfill your needs and expectations, as well as fit your personality type and interpersonal style. Take a look at the following list of key characteristics to see which one best describes you from Wells Fargo Practice Finance, the practice lender endorsed by ADA Business Resources.

Solo Practitioner

1)   Entrepreneurial. You crave the freedom to pursue your own clinical interests and are not afraid to work hard and take calculated risks. You look forward to having complete control over your practice and professional life.

2)   Highly organized. You enjoy the business side of dentistry including the administrative responsibilities of hiring and managing staff, selecting insurance, purchasing technology and marketing your practice.

3)   Strong decision maker. You can make tough decisions based on your own best interests and those of your patients, understanding that the ultimate success and growth of your practice is your responsibility.

4)   Visionary. You know where you want to go with your career, and have a good idea of how to get there. You prefer to be in charge of the quality of care, environment, customer service and operation of your practice.

5)   Good negotiator. You’re confident in your abilities to identify and hire professional team members to help you successfully locate, build, design, equip, staff and manage your practice.

Group Practitioner

1)   Team player. You thrive in a collegial setting where you can interact and learn from colleagues and ultimately achieve mentor status. You are comfortable taking direction from a corporate employer or group leader.

2)   Focused. You prefer to focus deeply on your area of expertise, honing your skills in a specific field of dental care, rather than juggling multiple responsibilities and administrative tasks.

3)   Well-balanced. You seek a predictable income and regular work hours in order to achieve stability and a healthy balance between career and family.

4)   Flexible. You can “roll with the punches” and adapt to management or structural changes that may occur in your work setting, such as the number of dentists with whom you will share the workload and the types of treatments you will offer.

5)   Ability to compromise. As in a good marriage, you understand when to push for your own needs and objectives, and when to compromise in order to preserve and grow the relationship.

Working for a period of time in a group setting can be beneficial for the new dentist, as you have the opportunity to learn how a practice is run before taking on this responsibility as a solo practitioner. However, with excellent clinical and organizational skills, you can succeed in a solo practice and enjoy the significant sense of achievement that such an endeavor can provide.


How to reduce stress

It’s no secret to you, or your dental team, that the dental profession comes with the potential for daily stress that can affect your health, as well as your ability to do your job. Stress can occur in various ways throughout your normal workday.  Handling an anxious patient, performing a not-so-familiar procedure or managing the intricacies of health insurance plans to make sure your patients get the treatments they need can all add up to one big stressor by the end of the day.

Work-Life Balance

Work-Life Balance

New dentists have the added stress of running a new business, learning to manage employees and the added burden of dental school loan repayment.

Here are two common stressful scenarios with some tips from the Center for Professional Success on how to handle them:

“What do I do when I get patients that are tense and fearful?”

This is a common concern for new dentists. When you walk into the operatory, you can easily pick up the anxiety from the patient without even realizing it. To stop this from happening, it’s important to observe the patient carefully. If you notice they are anxious, tell them you understand their anxiety and instruct them to take a deep breath along with you and to let their body sink into the chair. The deep breath (or two) will help them relax — and put you at ease as well.

“I work in a multi-operatory situation and I’m so tired at the end of the day. How can I stop from burning out?”

Time demands on dentists can be difficult. Self-care is important to keep yourself in good running order. Watch your diet — be sure to eat breakfast, a mid-afternoon snack, a decent lunch and a healthy dinner. Don’t forget to schedule your lunch hour on your calendar, so you’re sure to take it. Get some rest during the day — pause for a moment between patients, take a deep breath. Then close your eyes and take a second deep breath. Doing this is like pressing the reset button — kind of like taking a one-minute vacation.

ADA president points dental students to ethics contest

The ADA Council on Ethics, Bylaws and Judicial Affairs is currently accepting entries for this year’s Student Ethics Video Contest. The deadline to submit entries is July 31.

“The American Dental Association has a 150-year-old Code of Ethics,” Dr. Feinberg says on ADA YouTube video. “For a century and a half, it’s been our moral compass – our North Star – and it guides everything we do. I graduated from dental school 35 years ago, and every day it’s my goal to earn and maintain my patients’ trust by abiding by this code. Students, we’d love to see what you can do.”

This year, the contest will include a second competitive category, created for videos that promote patient safety through ethical treatment. A grand prize and an honorable mention award will be available for each category.

The new category is the result of the participation and support of CNA in this year’s Student Ethics Video Contest.

The contest is open to degree-seeking students at, or new graduates of, any ADA-accredited dental school who are 18 or older and U.S. citizens. Entrants must also be ADA student members or members in good standing of the American Student Dental Association.

To qualify, videos should be no more than four and a half minutes and must portray the application of one or more principle, code or advisory opinion contained in the ADA Principles of Ethics and Code of Professional Conduct. To be eligible in the new category, the video should focus on ethical treatment promoting or enhancing patient safety and treatment outcomes.

CEBJA will announce the winners at the ADA 2015 – America’s Dental Meeting in Washington, D.C. For more information, contest rules and entry forms, contact Earl Sewell at sewelle@ada.org or access the link here.

ADA Humanitarian Award nominations due Sept. 15

Do you know an ADA member who has created a legacy of volunteer work both in the U.S. and abroad? Nominations for the ADA Humanitarian Award are due September 15th.

ADA Humanitarian AwardThe award, one of the highest honors bestowed by the ADA Board of Trustees, recognizes individual ADA member dentist volunteer who has:

  • Demonstrated significant leadership over a period of at least 10 years
  • Served as an inspiration to others
  •  Established a legacy that is of ongoing value and benefit to those in need both in the U.S. and abroad
.

The award winner receives a $10,000 donation to support volunteer work and is honored at the ADA annual meeting.

Download the nomination packet here or contact ADA International Relations at 1-312-440-2726 or international@ada.org.

UNC, dental foundation establish memorial award for slain students

deah_yusor

Deah Barakat, 23, his wife Yusor Mohammad Abu-Salha, 21

Chapel Hill, N.C. — The University of North Carolina at Chapel Hill and the Dental Foundation of North Carolina have established a memorial award in honor of two dental students killed this year.

On Feb. 10, Deah Barakat, 23, his wife Yusor Mohammad Abu-Salha, 21, and his 19-year-old sister-in-law Razan Mohammad Abu-Salha were fatally shot in their Chapel Hill, North Carolina, apartment. Police officers arrested their neighbor, Craig Stephen Hicks, 46, for the shooting.

The Deah Barakat and Yusor Abu-Salha Memorial Award was established in consultation with both students’ families and will be presented for the first time this fall. Mr. Barakat was a second-year student at the UNC School of Dentistry and Ms. Abu-Salha was to enter as a first-year in August. The award will provide support to a UNC School of Dentistry student or group of students who plan a local, national or international service product that, Mr. Barakat’s brother, Farris, said “will give back to communities that need help the most,” according to a UNC news release.

“Deah and Yusor led lives of great purpose and this fund is a fitting tribute to their humanitarian devotions,” UNC Chancellor Carol L. Folt said in a news release. “Through this award, the Carolina community is honoring their legacy of creating a more compassionate world through dentistry and delivering aid to those who are more vulnerable and in need.”

Mr. Barakat had volunteered at dental clinics overseas and had plans to travel to Turkey with 10 dentists this summer to help Syrian refugee students in need of dental care. He had posted a YouTube video last September asking for donations to raise money for supplies and equipment. Through his efforts, Project Refugee Smiles successfully raised the funds for the trip.

“Deah and Yusor had incredible hearts for service,” said Dr. Jane Weintraub, dean and alumni distinguished professor at the UNC School of Dentistry. “They often gave their weekends to working at homeless shelters or the North Carolina Missions of Mercy clinics and were no strangers to international service trips. Through this award, we’ll be able to not only educate our students about their lives of service but also continue their legacy of giving back for years to come.”

The Dental Foundation of North Carolina and UNC each committed $30,000 to the endowed fund. Those who wish to contribute can visit giving.unc.edu/gift/sod and select “Barakat Memorial Fund” from the dropdown menu.

ECU dental school’s first graduating class establishes endowment

ECU dental school Class of 2015

ECU dental school Class of 2015

According to the ECU School of Dental Medicine News, the first graduating class of East Carolina University dental school established an endowment to support patient care and student learning.

The endowed gift — the Inaugural Class Patient Care Endowment — received 100 percent participation by the 50 graduates and matching funds from the ECU Medical and Health Sciences Foundation. It currently stands at $33,000.

“The Class of 2015 takes great pride in the palpable impact that the school is already having on North Carolina, and we are inspired by our faculty’s commitment to service. Our dedication to carrying out the school’s mission and fulfilling our class pledge extends beyond our years here. It is with this in mind that we have established the patient fund,” said Dr. Kelly Walsh, class vice president, who co-presented the gift at the school’s convocation on May 8.

To read the full story, click here.

Take action to support student loan reform

2014 Dental Student Loan DebtContact your member of Congress and urge him or her to cosponsor the Student Loan Refinancing Act of 2015, H.R. 649.

The American Dental Education Association estimates that the average graduating dental student’s debt was over $247,000 in 2014.

H.R. 649 will allow borrowers, under the federal student loan program, to refinance their existing loans multiple times. If the current interest rates are below the rate they are paying, they can refinance their loans. This would assist new dentists in reducing their overall debt, thereby opening opportunities to practice in areas of need.

Fill out the form here.

What type of entity should a dentist consider selecting and why?

In my previous blog post, I explained why, as a new dentist you may wish to form a legal entity to run your practice instead of running it as a sole proprietorship. In this article, I’ll explain what type of entity you should consider forming, what tax elections you should consider making when forming that entity, how to actually do it, and how much it will cost.

Rich McIver

Rich McIver

What type of entity you should consider forming

There are a lot of options when selecting what type of legal entity you will operate your practice out of. There is a traditional corporation (denoted by “Inc.”), a professional corporation (“P.C.”), a limited liability company (“LLC”), a professional limited liability company (“PLLC”), a limited partnership (“L.P.”), a general partnership (“G.P.”), a limited liability partnership (“L.L.P.”), and in some states a limited liability limited partnership (“L.L.L.P.”), along with a number of other industry specific entity types.

When you form your entity, you need to select one of these types, each of which operates under a different set of laws and tax rules thus each of which has different advantages and disadvantages. Because of the different laws and tax rules, you are urged to consult with your personal attorney in the state in which you will be practicing before making a final decision on the type of entity to form.  Once you select one you’ll need to append it to the legal name of your practice (e.g. “Dallas Dentistry PLLC”).

Professional Corporation

A Professional Corporation (“P.C.”) is simply a corporation for professionals such as doctors, lawyers or dentists. It operates just like a corporation (“Inc.”) with a few differences that aren’t relevant to this discussion. P.C.s using an S-Corp election (discussed further below) were the original option for dentists who wanted to form an entity. The P.C. with an S-Corp election provided a liability shield, cleaner tax accounting, the ability to distinguish between a dentist’s income and the practice’s profits and thus pay less in Social Security (10.4 percent of self-employment income up to $117,000) and Medicare taxes (2.9 percent of self employment income uncapped) than under a sole proprietorship. Plus a number of other benefits. Unfortunately, because P.C.s are a derivative of corporations (“Inc.”) they also generally require more paperwork, formal annual meetings, and other administrative hassles that traditional corporations require.

Professional Limited Liability Company

Certain administrative and tax burdens associated with a traditional corporation (and thus P.C.s) led states to create a new type of entity, the Limited Liability Company (“LLC”), and in its professional form the PLLC. A professional limited liability company (“PLLC”) is simply an LLC for businesses involving professional services. The benefit of a PLLC is that it generally has less burdensome administrative requirements than a P.C. This lower administrative burden made PLLC’s very attractive for dental practices (except in a few states, most notably California, where LLC’s cannot be used to practice medicine) . The downside of a PLLC relative to a P.C., however, was that a dentist’s Medicare and self-employment tax liability couldn’t be capped at his or her self-employment income, but instead was based on the overall profitability of the practice. This meant that dentists under a PLLC might be paying an extra 2.9-13.3 percent in self-employment taxes.

Professional Limited Liability Company With S-Corp Election

Obviously a combo of these two entity types, the P.C. with its caps on self-employment taxes, and the PLLC with its low administrative hassles, could be advantageous. Thankfully, that is possible with the PLLC with an S-Corp election.

States now almost universally allow PLLC’s to elect to be treated as P.C. or S-Corp’s for tax purposes (again, notably not in California). So, in effect, they are treated as an LLC from a corporate perspective, but when it comes to taxes they’re an S-Corp. This means that a dentist who forms their entity as a PLLC with an S-Corp election gets the benefit of lower administrative legal hassles, with the self-employment tax savings of a corporation. As such, this has become the default answer for many dentists when considering what type of entity to form.  However, as noted above, a dentist would be wise to consult with his or her personal attorney in the state in which he or she will be practicing before making a final decision on the type of entity to form.

How to Form an Entity

Now that you’ve selected the type of entity, you need to decide where to form it. For many dentists, the right answer is usually the state that you will practice in. That’s because if your state is reasonably business friendly, the advantages you can get elsewhere may be outweighed by the convenience and cost savings of not having to hire an out of state agent. But, there are valid reasons for deciding otherwise, so take your time and consider all the factors, perhaps after discussions with your personal attorney. (http://www.nolo.com/legal-encyclopedia/where-form-your-llc.html).

Once you’ve selected a state, actually forming an entity is really easy. For some states you need to first contact your licensing board and get documentation proving you’re a licensed dentist.  Then, just visit your state’s secretary of state’s website (find your state’s here)  to find the forms, download them, complete them and send them in. In many states the application can be completed all online, and in total it’ll take you about 5 minutes. The cost of forming an entity depends on the state, with some as cheap as $45 and others as expensive as $800 (for a state by state cost breakdown read this). You can pay via check, or in some states via credit card online. Note: In a few states, like New York, there is an additional publication requirement to complete formation which can cost up to an additional $1,600.

Once you’ve completed the application, the Secretary of State’s office will review it, and assuming it’s completed correctly, send you a stamped copy in the mail (or increasingly online). With that stamped copy, your entity now formally exists, and you can start doing things like obtaining a bank account, credit card, signing contracts with vendors, etc. all in the company’s name.

In the next article we’ll discuss some of the first vendors and service providers you’ll need to contract with to begin your practice.

For information on ADA legal resources, click here.

Rich McIver is a New Dentist Now guest blogger. He graduated from the University of Notre Dame in 2005 and obtained his law degree at the University of Chicago Law School in 2008. After graduating law school, Rich founded and managed three tech startups that were each acquired through private equity, private sales and a merger, respectively. In 2010, he founded and managed a Houston-based plaintiffs law firm which he sold via a buyout in 2014. In 2013, he and his wife, Holly McIver, an ADA member dentist, founded Kingwood Orthodontics, where he continues to manage back-office operations. His current project is running Merchant Negotiators, a Web startup that reviews credit card processors. Rich provides practical actionable advice for new dentists based on his experience starting and building successful businesses.

Disclaimer: The purpose of this article is to promote awareness of legal and other issues that may affect dentists and dental practices, and is not intended to provide either legal or professional advice. Dentists are urged to consult directly with a properly qualified professional or with an attorney admitted to practice in their jurisdiction for appropriate legal or professional advice.

Rich McIver is a New Dentist Now guest blogger. He graduated from the University of Notre Dame in 2005 and obtained his law degree at the University of Chicago Law School in 2008. After graduating law school, Rich founded and managed three tech startups that were each acquired through private equity, private sales and a merger, respectively. In 2010, he founded and managed a Houston-based plaintiffs law firm which he sold via a buyout in 2014. In 2013, he and his wife, Holly McIver, an ADA member dentist, founded Kingwood Orthodontics, where he continues to manage back-office operations. His current project is running Merchant Negotiators, a Web startup based in Houston. Rich provides practical actionable advice for new dentists based on his experience starting and building successful businesses.

Access JADA articles, online CE with ADA username and password

Beginning March 25, ADA members can log in to obtain access to JADA Online as a benefit of membership by clicking the ADA Member Login link on the website and entering their ADA Member ID and password.

JADAADA members receive a 50 percent discount on JADA 2015 Online CE, which will be applied automatically when they log in via the ADA Member Login link. The member price is $10 for three CE credits. The nonmember price for three JADA Online CE credits is $20.

For assistance with ADA member ID and password issues, contact the ADA Member Service Center at the toll-free number on your member card or call 1-312-440-2500. ADA Member Service Center advisors are available Monday through Friday; 8:30 a.m.-5 p.m. CST. Or email mscpassword@ada.org.

Nonmembers may purchase a one-year subscription for $179, which includes access to JADA content from 1913 to present; purchase a single article access for $31.50; or join the ADA to receive access to JADA Online and Online CE discounts at ADA.org.

How to contract with third-party payers

Contracting with third-party payers can prove complicated but with some diligence and attention, new dentists can feel confident they were thorough in their decision.

Patients are two and a half times more likely to visit the dentist if they have dental benefits. Nearly 187 million Americans were covered by some form of dental benefit in 2012, according to a report from the National Association of Dental Plans and the Delta Dental Plans Association.

In 2013, a typical dental practice had nearly 72 percent of its patients with some form of a dental benefit, making it challenging for dentists to decide whether to participate in a network or not. On average, dentists participate in five and a half managed care plans.

Here are some steps the ADA recommends new dentists take when beginning the process of contracting with a dental benefits company:

• Figure out the volume of patients you expect to see and whether the fees proposed by the third-party payer work for you. The ADA Benefit Plan Analyzer allows dentists to run “what if” scenarios that will illustrate the financial impact to their practice. It’s available on the ADA Center for Professional Success website at Success.ADA.org.

• Carefully review the contract between you and the thirdparty payer. A contract is a legal document and by signing it, you are making promises that you must keep.

• Consult with your personal attorney before signing. The ADA Contract Analysis Service is also an option. Members may submit a contract to their state or local dental societies, who will forward it to the service, which provides a plain language explanation of contract terms of each agreement analyzed. The service does not provide legal advice or recommend whether a contract should or should not be signed.

• Determine whether the contract presented includes terms such as an all affiliated carriers clause, most favored nation clause or hold harmless agreement. Also pay attention to the carrier’s processing policies, which may or may not appear in the contract.

• Review the plan’s website and provider participation manuals carefully. Understand how changes to these will be communicated to you and your rights when changes are made. If you still have questions, talk to a representative from the plan to clarify.

The ADA Center for Professional Success has a series of videos that will help dentists understand how third-party payers interface with dental offices. Click here, to watch the tutorials.