In the second of a three-part series, Michael W. Davis, DDS, details some of the ways dentists and dental offices are vulnerable to scams. This part discusses unethical practice management consultants and practice brokers.
Who doesn't receive via email, fax, telephone, or mail a solicitation from a dental practice consultant on a weekly basis? As a young doctor, I saw many that would promise the "Million Dollar Practice." Today, those figures have grown to the $8 million, $10 million, or $12 million practice. The promises are ridiculously laughable. As the man once said, "If it seems too good to be true, it is."
A number of big-name consultants spend a great deal of time with legal actions brought forth from dissatisfied doctor clients. Using a boilerplate formula from a household name consultant has brought many a dental practice to bankruptcy or near bankruptcy. They may also have multiple endorsements from organized dentistry, which today is little more than paid advertising.
Simply because a consultant has exposure, with prolific publication of consulting articles, does not ensure his or her competency to manage the unique specifics of your dental office.
Here are some suggestions.
Do a background check on former doctor clients who the consultant has served. Do they have philosophies and goals similar to yours? What were the specific objectives? Were goals met?
Pay a set specific hourly fee or set a total fee. Never agree to a fee based on some percentage of practice growth, which can be legally disputed and challenged.
Establish a set time period for services (not into perpetuity). If you like the services, you can always renegotiate for additional services.
Make certain the consulting operation isn't a front for a religious group or cult (very common).
Your practice, as is every practice, is quite unique. Each doctor places a specific brand on his or her practice. Will the consultant's systems mesh with your patients' and community's values? Does the consultant employ the same methodologies and programs in small town Arkansas, as in Beverly Hills, and also in inner city Detroit?
Although consultants may have formerly been practicing dentists, this means little or nothing. Today, they are not your clinical colleagues. They should not be viewed as such and afforded undue deference. Your primary responsibility is toward the best interests of your patients. Theirs primarily is toward the profitability of their business.
You should realize that there exists some very outstanding dental consultants who provide remarkable work. Unfortunately, this is an industry with little to no regulatory oversight. Civil legal cases against dishonest or incompetent consultants get settled and sealed, with nondisclosure and nondisparagement agreements. The average doctor will never hear of these cases.
Too often, the good get lumped together with the bad, if not the downright ugly. It is imperative that you do your own due diligence background checking, fully realizing you will be blocked from full disclosures on a number of crooks.
Dental practice brokers
If you thought practice consultants presented a "can of worms," here is another one: practice brokers. Again, this is a largely unregulated industry with usually little or no oversight. The same caveats that apply to consultants also apply to brokers. I'll also add a few more.
Brokers should represent the interests of only one party. That way, you know exactly where they stand. The concept of dual representation is highly flawed and often abused.
Brokers involved with dual representation may be engaged in hidden deals that can later bite you in the backside. A brokerage representative, who you personally retained acting in your sole best interest, would demand disclosure of important data from the opposite party and provide assistance in evaluation of the data. You could more reasonably trust their recommendations for attorney counseling, professional accounting review, and auditing. They would less likely be acting on hidden agendas.
Again as with the dental consulting industry, the dental brokerage industry has some outstanding individuals of merit. They work out problems before they ever become problems. They know their markets and demographics. They know the doctors (often on a personal basis) in those sectors.
By contrast, this business also attracts some serious slime bags. The money made in the business can cover for many "sins of the past." Legal cases get paid off (financially settled) and covered up. The fact that the broker may have been a former practicing doctor means absolutely nothing. The longevity of the company means nothing, as some of the worst have been in the industry for decades. Donations are given to dental schools to buy favor. Ad moneys are given to organized dentistry to purchase respectability when none is warranted.
As a doctor, whether you're a potential practice buyer or seller, you must do your own personal due diligence. Is the broker an individual of sound ethical standing? Does he or she have a proven track record, which you can personally substantiate with specific examples of workable deals for both the buyer and seller? This isn't a quickie run-through of the broker's website. This requires phone calls and meeting people to get the information eye to eye.
The next article in this series will cover the insurance industry.
Michael W. Davis, DDS, maintains a private general dental practice in Santa Fe, NM. He serves as chairperson for the Santa Fe District Dental Society Peer Review. He is also active in expert witness legal services.
The comments and observations expressed herein do not necessarily reflect the opinions of DrBicuspid.com, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.