Continue reading »]]>

Continue reading »]]>

Continue reading »]]>

Continue reading »]]>

I have always been a fan of high deductible health insurance.  Insurance is for unthinkable risks, not everyday expenses.  For years I have had a $5,000 deductible policy for my family.  Before I had an HSA, I just set the deductible money aside and used it as needed to cover out of pocket expenses.  When HSAs became available, I was happy to be able to deduct those expenses.

I have often wondered why more people don’t do this, and it may be because most folks would spend the $5,000 deductible funds on other things… but I think I may have come up with a way to fix the problem for at least some of these folks.

I was reading a blog post (and an NPR story) about health care co-ops.  It seems when folks are actively involved in groups (the stories are specifically about evangelical Christian groups that created health care co-ops), their health care is significantly reduced.  It is also true that people with social connections are happier, and happier people tend to get sick less often.

The idea of the co-op is that thousands of people pay less than $300 a month for family coverage that covers up to $100,000 a year in health care expenses. Note: they will not cover health care expenses for abortions or STDs.  I pay about $300 a month for my health insurance, but remember the first $5,000 is not covered.

This got me thinking… Why not mix the two ideas? What if there was a co-op of high social capital people that would toss in a few dollars a month to cover the difference between, say $500 and $5,000?  I bet the cost would be very little, since most socially highly involved people have fewer healthcare costs overall.  This would reduce the cost to a manageable number for those without $5,000 in an account for deductibles, and give them courage to accept the higher deductible policy.

Seems something like this could be done on a governmental level… maybe a state level.  Then states would encourage people to get and stay connected to groups… and they could help their citizens.  The way health insurance is sold (different policies and requirements per state), it could not be national in scope.

Any state legislators reading?  I think it’s an idea that ought to be batted about.

Is the co-op idea how some dentists offer special insurance-like programs?  Is there a way for dentists to offer high deductible insurance with a co-op to cover anything in the middle?

Continue reading »]]>

Bad Broker Behavior: unbalanced representation

Imagine a teeter totter with two 100 pound boys on either side.  They are having fun going up and down, up and down.  It is easy to have fun because of their balance (both of them exert the same gravitational force), and their own leg muscles provide the fun.

Now imagine two different boys, one is 100 pounds and the other is 5,000 pounds.  The heavier boy has all the advantage.  There is not much the lighter boy can do to have fun.  He is at the mercy of the greater gravitational pull of the heavier boy.  If fact, the heavier boy will not have much fun either.

You think the mismatched boy story doesn’t happen?  There are about 140,000 in the US dentists that can tell you that is happens all the time, at least as an analogy.

The boys, in the real mismatch are dentists wanting to carry out a transition.  The lighter boy is a new dentist, and the heavier boy is a senior dentist.  The gravitational mismatch is provided by representational force.  The senior dentist has employed a broker that charges 10% of the selling price, and the new dentist has agreed to a dual representation with either the same broker or employed a different broker.  The new dentist has paid $2,000 for his representation, and the senior dentist will sell his practice for a million dollars, creating a fee of $100,000… a 50-1 ratio, hence the 5,000 pound force to the 100 pound force.

In real estate, there are often two brokers, one for the buyer, one for the seller.  Almost always, they split the commission that the seller pays 50/50, creating equal representation.  This balances the scales and means that both buyer and seller have brokers that will fight for their clients’ good because both brokers stand to make the same amount of money from the sale.

In dentistry, there is no such 50/50 split.  The only way to create equal representation is to skip the dental practice broker altogether.  All the broker does is evaluate the practice (another Bad Broker Behavior), market the practice, match buyers to the practice, and create the contracts to affect the transition.  This is not oral surgery we are talking about here.  The tasks are not hard, but because the brokers know the steps and the dentists don’t, the brokers have an advantage, and continue this process that allows transition representation to have a 50 to 1 ratio imbalance.

You can’t blame any one broker.  This representation mismatch has been built into dentistry by decades of brokers following the habits that their predecessors built.  Dentists can and should transition with equal representation, and the best way to do that is to not use a broker at all.  The buyer and seller represent themselves.  The transition tasks, once understood, can easily be accomplished by both buyers and sellers.

Social media is driving our society towards trust and openness.  Fundamental attitudes are shifting.  If both the buyer and seller embrace this new ethos and are open and trustworthy, then balanced self representation dental practice transitions can be fun.

p.s. I thought I had posted this already… sorry for two posts in one day, but this post was supposed to be published at the same time my YouTube Bad Broker Behavior video with similar content when out.

Continue reading »]]>

Many of you will have heard of Social Media for Dentists if you are active on Facebook.  Jason Liscomb and Steven Knight  are the super powers behind this amazing business.   If you had done a Google search on them you would find landing pages for their books (both of them are extensive 400 page tomes that walk a dentist through the social media landscape).  They don’t seem to have a really flashy, self promotional website, but they are very successful.  how is this possible?  They KNOW social media… and use it amazingly well.  Their business is mostly found on Twitter and Facebook.  Jason has a bit of a profile on LinkedIn, but no connections to speak of.

I talked with Steven yesterday for maybe an hour.  I bought both their books because I have been following them for some time and because we have similar feelings about social media.  I read a lot… and look forward to reading their books.

There are a couple things Steven shared with me yesterday that are of special importance to dentists.  I know of dentists that are spending upwards of $10,000 on websites… and huge amounts on Facebook pages.  I asked Steven if he knew of a dentist that had a nice, functional website and social media presence that they didn’t spent a ton for.  I wanted a real success story.

He told me of Omega Dental Care.  If you Google “Omega Dental” they show up first in the results (though they show up no where near the top of a search on “Eden Prairie dentist” or its derivatives — they need some SEO help).  Omega Dental has a functional website without a lot of Flash programming.  They have a VERY functional FaceBook page.  (Steven mentioned that he built the Facebook page for $500 when I lamented that too many dentists pay too much for social media presence and over-the-top websites)

Here is the take a way: Dentists don’t need super expensive websites.  Dentists need a LinkedIn Profile and to join groups like the Dentist Network group for their professional networking (Business to Business) efforts.  Dentists NEED a Facebook page for their patient facing efforts (Business to Consumer). Most of their action should be on Facebook.  They need a $500 Facebook presence, and then… here is the important part: then they need to be social.  Start friending every patient you have.  Post on their walls when they visit your office.  Tell them (and their friends) that you loved having them come in.

Follow the example of Jason and Steven.  focus your efforts on the social media that matters most, and give, give, give value.  The more value you give, the more trust you build.  The more trust you build, the more likely you are to attract a new patient or hold your existing patients.  Your efforts, like happiness, will spread like a contagion through three levels.  Even your friends’friends’ friends will feel the happiness you build.  Now, that’s a lot of potential patients!

Continue reading »]]>

The morning was already too hot.  I was on my way into work.  It was July in the mid 1990′s.  I despised my heavy winter coat laying on the seat next to me.  I realized I had slid to the lowest rung that a computer programmer could fear.  I had been assigned for the past several months to work on IBM mainframe assembly code on a project that had shipped a decade earlier.  I had to use the terminal in the 58 degree temperature controlled windowless mainframe room to do my programming.  The company valued the project so little that they didn’t even provide terminal emulation software that would allow me to debug the code from a cubicle.  I had to take breaks to warm my hands and get the feeling back in them.

I was finding ever more difficult to show up in the morning.  I had destroyed my career and future.  No one would want to hire me after working on such an assignment…  and so went my thoughts.  On one of my ever increasing breaks from the cold room, Tim Draper pulled me aside.

Tim was one of my co-workers.  I didn’t know him well, but as it turned out, he was one of the best friends I have ever had.  Tim, on that fateful day, pulled me into his room.  He told me that he was seeing in me some of the things that he was learning to see in himself, with the help of a counselor.  He told me that he suffered from clinical depression, and he thought I might be too.  Boy… was he right!  Tim told me about some books that his counselor was having him read.  I felt like a drowning man being tossed a life preserver… and Tim’s actions did save my life.  My thoughts had begun the slippery slide into self destruction.

I almost ran out the door to go to a book store to buy the books he suggested.  And so began my journey into CBT (cognitive behavior therapy), neural-plasticity, and positive psychology.  I learned that there were deeper levels of depression that I could still sink into… but that knowledge gave me hope.  I immersed myself in CBT and used those tools to pull myself to a higher plane… and the timing could not have been better.

Three weeks after Tim pulled me aside, I was asked to visit with my supervisor.  I was being laid-off (and would never see Tim Draper again).  The company outsourced my work to India.  Instead of being despondent, I was filled with anticipation for the future.  I was excited to see what would come.  I had no idea how I would make it… but I knew that with my new CBT tool-set I could face the world and be productive.

I share this information in order to give hope to those that may be reading this that may not fill fulfilled, may be slipping into depression, may not feel happy.  It is said that dentists are one of the most depressed professionals… I wonder about that… even more than attorneys? hmmm… that’s got to be bad.

A book I am reading right now talks about the level of stress and depression that Harvard students feel.  It is seemingly incongruous.  These folks have been at the top of their class from the time they were in preschool.  They have it all… the opportunities that await them are extraordinary, and yet they are some of the most depressed people in America.  They have bought into the idea that success brings happiness.  I have learned that success does not bring happiness, but that happiness brings success.  Happy people are more successful than those who are depressed or even those that are merely even-keeled.

If you are a dentist that fits into the state of mind that I was in, there is hope.  Think of me as your personal Tim Draper.  Read Learned Optimism as a starter.  It’s not a new book anymore, so it will be cheap and easy to find on Amazon. Then read The Happiness Advantage (this one’s much newer).  Both these books use the tools of CBT without digging into the gory details the the first book I read did.  Seligman had just started creating the field of Positive Psychology back then.  If you find these tools helpful to you, thank Tim Draper, and then become Tim Draper.

Continue reading »]]>

Many dental students ponder the great question, “Should I buy a practice or start my own?”.  They may romantically dream of creating a practice from the ground up, potentially inventing a new way of serving patients and becoming rich and famous in the process.  This is what most people think of as entrepreneurship: creating something new from scratch.

Let me make my position clear: Newly minted dentists should never, ever start a practice from scratch!  The reason is risk.  Three types of risk glare in the face of new dentists starting a practice from scratch compared to buying a practice:  cost of failure, cash flow and  competition.

Cost of Failure

Building a new business from scratch carries frighteningly pessimistic outcomes.  In many fields, the failure rate is near 90%.  This statistic is OK when the stakes are low… the startup cost are minimal.  For a new dentist… the stakes are significantly higher.  School loans can easily top $300,000.  The build out of a new office can be twice that.  Nearly a million dollars can be on the line for a new dentist.  Facing that sort of startup costs along with the need to learn the ropes of business ownership at the same time creates a sickeningly risky venture.

Cash Flow

Starting a practice with a large cost of failure is bad enough, but that is compounded by the lack of cash flow to service the debt.  Some lending institutions may offer to lend enough cash to cover the early negative cash flow… but most will not.  This negative cash flow creates such pressure on a new business owner that clear-minded focus on marketing and building a new practice are nearly impossible.  When buying an existing practice, there is a patient base that creates positive cash flow to offset the negative.

Competition

A new dentist starting a practice from scratch is faced with competition from seasoned vets that are enjoying positive cash flow.  These other dental practice owners have learned and worked out the kinks in their businesses.  They may have filled most of the need in a given market.  Starting a new dental practice in an area already well served is financial suicide.

For these reasons, dentistry has created the idea of an associateship.  A new dentist joins a successful senior dentist with an understanding that the new dentist will buy the practice in the near future.  The new dentist learns the business end of dentistry from the senior dentist like a young Jedi padawan at the foot of a Jedi master.  The new dentist has time to build her speed and skills in a practice setting.  The new dentist learns and connects with the patients.

For the new dentist, an associateship is the least risky option, with this caveat emptor: get your associateship terms in writing – in a contract.

New dentist… now you know.  Become an associate to a successful, honest senior dentist.  Be careful who you choose.  Not all successful senior dentists are honest, and some who are have a change of plans.  The dental industry believes that associateships fail to turn into transitions at an insane rate… and they do, if not handled correctly.  If you need help finding honest, successful senior dentists that will back up their associateships with signed contracts leading to a dental practice transition, we can help.  Build your profile at OnlyTheBestPractices and you are on your way.

Continue reading »]]>

The new dentist is OK with the asking price… but his wife is not.  She feels the senior dentist is trying to take advantage of them.  She doesn’t trust the selling broker’s valuation numbers.  Then the selling dentist’s wife gets into the fray, feeling the buyers are trying to steal the practice that they both worked so hard on for so many years. Sound familiar? I bet it does if you’ve been around dental practice transitions for a while. It reminds me of a time not long ago.  I acting as mediator for two men that had been friends and business partners for more than thirty years.  The discussion of retirement came up, and they both thought their children should take over… leading to difficult feelings.  As I stepped in, I helped them work out the division of assets.  This was difficult because they both had spent money for appraisals and they suggested vastly different values.  The total of the assets they needed to split was several million dollars. We worked for days on resolving the differences in valuations from their appraisals.  We worked on overcoming the lack of trust they had built up through the disagreement, and finally we were within about $2,000 difference.  I suggested they split the difference, since it was such a minor number compared to the total.  Then, as they were about to sign the agreement, one of the men felt slighted in a social event by the other and refused to finish it off. They both hired attorneys and dug in for the long haul.  Several years later, they had both spent multiple hundreds of thousands of dollars suing each other, and were in a court mandated mediation.  By that time, the feelings had grown to hatred, and they were both doing everything they could to hurt the other.  The mediation took place, and they split what was left after the attorneys took their share.  Neither was happy with the result, and both were significantly poorer for the experience. Sounds silly… losing years and hundreds of thousands of dollars over $2,000… you’d never do that, right?  Well, I started this post with a story all too similar.  At the last minute, the transition was not completed.  Both parties had hard feelings. Similarities of note: valuations can vary widely and emotions/pride can trump a few dollars. The take aways: 1) Don’t get stuck on the valuation.  Hire a third party valuation expert that does dental practice valuations, and both agree to accept the results.  The buyer’s bank is likely not going to use an evaluation anyway.  They will look at the cash flow to verify the practice can handle the debt. 2) Don’t let emotion get in the way of a successful transition.  Buyers, try to understand the point of view of the seller and his wife.  Sellers, your buyer probably has WAY more debt than you had coming out of school.  That is weighing heavy on her mind.  She is mentally trying to understand how she can handle the school debt and the practice debt.  Don’t get offended by questions.  Create a due diligence package before you meet the first time so most of the questions will be answered without you needing to dig them up. 3) Work together as buyer and seller without a practice broker in the middle.  Misunderstandings happen easily enough without a third party in the middle… and as seller, you will be saving most of that 10% so you can feel a bit more generous with your buyer.

Continue reading »]]>

The Goshute Indians lived in the southwestern deserts of what is now Utah and Arizona for many hundreds of years.  Subsisting on roots (hence the name Digger Indians), seeds and small game, they were a part of the ecosystem.  Their populations ebbed and flowed with environmental forces.

The Comanche Indians lived further north and east of the Goshutes.  They subsisted on small game or bison they killed by herding them off cliffs.  Before the horse was introduced to them, they struggled to catch enough food to thrive.

The Spanish had colonized the Southwest several decades when in New Mexico, the Pueblo Indians revolted in the year 1680.  The Spanish had been very careful to contain the use of horses in order to keep the indigenous population under control.  The revolt caused the Spanish to abandon horses by the hundreds.

The two tribes handled the introduction of this new tool very differently.  When the Goshutes first saw horses, they saw food.  They ate any horses that they came in contact with.

The Comanche behaved differently.

They saw the horse as a tool that could significantly improve their life.  They understood that from the back of a horse, bison were significantly easier to hunt.  They became more nomadic – following the bison herds, and growing in power.

Neither tribe was smarter than the other; both had similar lifestyle before the horse.  The difference is how they used the new technology.  One became the symbol that we now think of whenever we imagine the American Indian; the other became known as “the Digger Indians” subjects of slave trade between other tribes and the Spanish.

?

Are you more like the Goshutes or the Comanche?

It depends… do you recognize trends and tools?

Do you know how you use tools like social media and cloud based technology to make your practice as competitive as possible?  Are you still using the Yellow Pages as your main marketing avenue?  Take a look around you… there are horses ready to make your business more profitable… you need to put them to work in your practice.