A universal concern that arises in dental practice transitions is patient attrition: how many of the selling doctor’s patients will remain with the buying doctor after the transition. And while it’s smart to think about this, the fears about patient attrition can be out of proportion to the risk. When buying a dental practice, if you work with the selling doctor and take a few simple steps, you can keep nearly all of the existing patient base.
Likewise, when selling a dental practice, a doctor shouldn’t be overly concerned about their personal connection to their patients. While its true that over the course of their career, a doctor has spent a lot of time with the patients—in some cases having treated them and their families for years—a quick review of the circumstances surrounding a dental practice transition show why most patients are not inclined to look for a new treatment provider.
Why Patients Stay with the New Doctor After a Dental Practice Transition
Its well established that most of the value of a dental practice is its goodwill. According to one dental practice transition expert, “Goodwill refers to the intangible assets that either restrict or enhance the future earnings of the practice, and includes patient charts, recall systems, staff longevity, noncompete covenants, and the owner’s reputation within the community.” That is, it’s the patient base and whatever keeps them coming back to the treating doctor. More than anything else, this is the value of a dental practice.
When buying a dental practice, the goodwill is the major factor that can make an existing practice more attractive than starting a new practice from the ground up. In order to start a new practice, a doctor will have to go hundreds of thousands dollars in debt, find space, furnish and equip it, hire staff, and have sufficient capital to pay the staff and themselves, while having no existing patient base. When a new doctor is buying a dental practice, however, they take on a substantial amount of debt to be sure, but they typically get a fully operational office with staff, and a built-in patient base with a quantifiable record of collections. Even if the practice loses 20% of the patient base (an untypically high number), the buying doctor is still retains 80% of the patients, which is a whole lot more than zero, which is what the doctor starting a new practice has.
Consider this from the patient’s point of view. They have been to the office. They know where it is and what the experience is like. They have interacted with the receptionist and other administrative personnel. If they are returning or longtime patients, they have an established trust in the doctor, hygienists, and staff. If the transition is properly explained, the buying doctor gets the benefit of the patients’ trust in the selling doctor. And the patients can continue going to the office that they know and trust, saving them the hassle and uncertainty of finding a new provider. Patients won’t make a change without a compelling reason to do so.
Steps to Minimize Attrition when Buying a Dental Practice
While the risk of patient attrition may be overstated, that is not to say you don’t have to worry about it. It just means that you have to have a sensible plan. Here at DDSmatch Southwest, we are dental practice transition experts and bring the experience of hundreds of successful dental practice transitions from all across the country to bear for our clients. Based on this experience, there are a few, simple steps you can take to ensure you retain as many patients as possible when buying a dental practice.
The goal a seamless practice transition, so the patient to see no changes in the practice, except for the person doing the dentistry.
1 – Send a Transition Letter and Follow-Up Email
As soon as is appropriate, the selling doctor should send a letter to all of their active patients explaining the practice transition (including the selling doctors reasons for selling, if they are neutral or positive reasons such as retirement or relocation), introducing the new doctor, and, most importantly, giving the new doctor a strong endorsement. This letter is trading on the trust and goodwill that the selling doctor has accumulated and, to whatever extent possible, transferring that to the new doctor. The heart of the message is that the selling doctor has put their trust in the new doctor and so should the patients. It can be helpful to include personal touches in the letter such as a photograph of the new doctor (and perhaps their family) and details about their personal life. It’s also useful to follow up by sending the same information in an email to all active patients, in case the letter is overlooked.
Additionally, staff should be trained on how to discuss the transition with patients. The buying and selling doctor should come up with the language they want used if patients inquire about the transition or new doctor either, over the phone or in person, always with an eye toward instilling confidence in the buying doctor.
In short, if the selling doctor and staff trust the new dentist, the patients will too.
2 – Keep the Office Staff
Losing the selling doctor is enough change for the patients. Also, they have generally spent more time interacting with the front of office staff than the doctor. The receptionist sometimes is the person with the most influence over how patients perceive the new doctor. As addressed above, they need to communicate confidence.Just because patients are putting their trust in a new doctor doesn’t mean that trust can withstand sweeping changes in the office. That may make patients nervous.
There are lots of reasons why it may be smart to keep the staff on. Regardless of your plans for staffing the office, you’d be well served to keep the staff on for at least 90-180 days after buying a dental practice, and to keep them on with the same compensation and benefits package that they’ve had. The staff will have their own concerns about the transition and you need to keep their morale high during this critical period. If patients see more unfamiliar faces in the office, detect a change in previously friendly demeanors, or sense uncertainty from the front office staff or hygienists, you risk spooking them into looking for another doctor.
3 – Maintain or Increase Office Hours and Services
Again, this is about not making too many changes at once. A patient may think that a change in who is performing their dental work is acceptable. That does not mean they will tolerate shorter office hours, which may make scheduling appointments difficult or cause them to wait longer than they are comfortable for treatment, or not being able to get the treatment they are accustomed to. The goal is to make the transition as seamless as possible—to not restrict anything that made them initially choose to get treatment from the office and keeps them coming back.
This doesn’t mean you are locked in the prior doctor’s way of doing things forever. It just means that changes are made gradually, not all at once.
If, however, the changes you want to make include extending hours or expanding services, these changes may be implemented sooner, as they can be seen as positive additions by patients (staff may be a different issue, though, especially with regard to extended hours).
4 – Keep the Same Branding
There are two points here. First, as above, you want the transition to be seamless—you don’t want patients to notice any change other than it’s you on the stool beside them. Second, the public’s perception of the dental office—that is, the goodwill—is bound up with the office’s brand. This is not just about what the existing patients think about the practice, but the community in general. If the selling doctor has done well to establish a good reputation in the community, keeping the same branding will help transfer that reputation to you.
5 – Whether or How Long the Selling Doctor Stays On in the Practice
Having the selling doctor stay on can be useful for in-person introductions to the new doctor and to ensure a smooth transition as the new doctor becomes more familiar with the staff and office practices, policies, and procedures. However, staying on too long can negatively impact the buying doctor being able to establish themselves as the new head of the office. Therefore, when buying a dental practice, if you are considering having the selling doctor stay on, carefully consider how much time is really needed. Some people will say it should be three-to-six months but the truth is that the average time is closer to two-to-four weeks (specialty practices may require more time).
DDSmatch Southwest has Available Dental Practices in Texas and New Mexico
If you are considering buying a dental practice, we have several quality practices available throughout Texas and New Mexico. For more information, contact us today.