I'VE GOT A GREAT PRACTICE, I'LL BE RETIRING SOON, SO WHY SHOULD I WORK HARD FOR DENTISTRY? WHY SHOULD I EVEN CARE?

Some Thoughts for Senior Dentists

The answer to this is easy, folks.
The finest dentists probably have the most to lose, so please, read on.

If you are ready to retire now, then you probably need to worry.

If you are reasonably astute, you can sell your practice to an individual buyer, to a dental "corporation" such as many orthodontists are now doing, or directly or indirectly to an insurance company.

Now, if you hold the note when you sell to an individual dentist, you had better be scared to death, because your future income depends on that stranger's ability to deal with the new paradigm issues being discussed by AIDA. What makes you so sure that this person, whom you will have little or no control over, can compete and succeed in a managed care permeated market? Do you want your practice back in a default after the new owner has made it unrecognizable as a means of dealing with managed care? Hope you have a well stoked retirement plan in addition to the value you thought you had in your practice!!!!!

If you don't hold the note, what bank is going to lend money to a young dentist with little experience expecting that he or she will be able to service your traditional, quality, fee-for-service practice? Responsible questions for a bank to ask these days of a young borower is, "What plans do you belong to? What is your managed care business plan? What steps can you take as a young dentist to maintain Dr. Oldguy's market niche for yourself?". Banks are savvy to the market forces playing out on health care today. Better look for a rich kid to buy your practice.

If you sell to a "corporation", many deals go for a mixture of cash and "stock". This could be a frightening deal even if managed care didn't exist, as this stock often has less backup than the real market. Stock is always risky. What happens when a majority of the stock is bought by an insurance company? They then have control over the practice and its revenues, could drive down the value of your remaining stock, or even close the practice so as not to compete with one of its other offices.

If you sell directly or indirectly to an insurance company, then timing is everything. The first ten to fifteen percent of the practices in a metropolitan area to be bought will go for reasonable prices. Once the company has a particular municipality represented, it won't need your practice as much to achieve its long term goals, and the prices will drop precipitously. If you are among the last to sell, the insurance companies won't be interested, because if you close they will probably get your patients anyway. Rotsa ruck!!

If you plan to be retiring in eight to ten years, you should be scared to death!

The big question will be then, "Who can buy my practice?".

There will be a GENERATION of young dentists out there who have been told from dental school that they will have to be involved in managed care to survive.

There may literally be no one who is prepared to buy your practice, no one who will understand the nuances of caring for "private care patients", no one who has aquired the rehabilitative skills (that you fought for in your post-graduate years) because "those types of treatment aren't covered by insurance anyway", no one who can see past the "highest summits of mediocrity". If you didn't learn anything else from the Reader's Digest article, learn that the standard of care is fragile, and is defined by what the public will accept, not what is the best. If the public is trained by contractual language and mud slinging to accept a lower level of care, then young dentists will practice it and accept it as the norm.

So again, the question is not "Who will buy my practice?", but "Who CAN buy and operate my practice?"

Prepare Yourself. Change Dentistry for the Better. Leave a Legacy.

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Last Update 5/21/97