Having sold two of my own general dental practices and hundreds of practices for my clients over the past 18 years, I am always impressed with how well patients of a general practice transfer to the new buying dentist.
One of the greatest fears buyers of dental practices have is that the patients of the practice they are purchasing are going to “jump ship” and leave when they take over. Buyers frequently say to me, “Shouldn’t I expect to lose one-third to one-half of the patients when I take over a dental practice?” The answer is: If the transition is done properly, there is no reason to lose anywhere near that many patients. In fact, with a well-orchestrated, practice-sale transition, the patient loss should be in the single digits to the lower teens, barring any unusual circumstances which I will discuss later in this article.
The overall concept in the transfer of patients is the transfer of trust. The dentist who these patients have trusted for years is now recommending that his or her patients meet and give the new dentist buying his practice an opportunity to be their new dentist.
Let’s look at it from the patient’s point of view. Patients think, “The dentist who I have been seeing for years is retiring. I am going to have to go to a new dentist one way or the other. I can go to the doctor who my dentist — the dentist I have trusted for years — recommends, or I can start shopping around for a totally new, unfamiliar dentist. I can go to a new practice where I don’t know anybody or I can try the new dentist at the practice I have been going to where I’ve known the receptionist and dental assistant for years, and where the hygienist knows me and my individual dental concerns and needs. The staff knows me and my family, and the practice is in a location that is convenient for me.”
It just makes sense that the vast majority of patients — with some exceptions — will at least give the new dentist a try. It is then the responsibility of the new dentist to make a good first impression and win over the patients.
There are some circumstances that a buyer should be aware of that can imperil the success of an effective patient transfer in a newly purchased practice. The first one is if the practice has moved recently. For example, let’s say the selling practice has moved from an urban location to the suburbs three years prior to the sale. The vast majority of patients moved with the practice. However, when it comes time for the selling dentist to retire, many of the patients might take this opportunity to find a dentist in a more convenient location for them.
The second situation is where a selling dentist originally lived close to his practice, then moved his residence some distance from his practice. Over the years, many of his friends and social acquaintances came to see him for their dental treatment. Consequently, a significant percentage of his practice was made up of patients from in and around his new residence. Again, when the selling doctor retires, these patients may decide to find a dentist closer to home.
For these reasons, it is important for practice buyers, as part of their prepurchase due diligence, to check the zip codes of the patients of the practice. Do this through a chart audit prior to the sale to see where the majority of the patients-of-record live and work. The patients who are coming from zip codes that are a considerable distance from the practice may not stay with it after the sale.
Another critical transition issue for a buying dentist to retain the maximum number of patients is to not make any significant changes to the practice for at least the first six to 12 months after the purchase. That is, do not make any changes to the basic operation of the practice, such as staff members, office hours, and financial and dental insurance office policies.
Barring any unusual circumstances as outlined above — and assuming a well-planned and executed transition strategy — a practice buyer can generally expect a high percent of patient retention when purchasing a general dental practice.
Dr. Peter Mirabito is the senior and managing partner of Precise Consultants, a firm specializing in dental practice sales, appraisals and associateships, since 1986. He has appraised and/or sold dental practices in Arizona, Colorado, Kansas, Minnesota, Montana, Nebraska, Nevada, New Mexico, New York, South Dakota, Texas, Utah, and Wyoming. He is one of the founding members of American Dental Sales. He can be reached at (800) 3072537, firstname.lastname@example.org or through the ADS Web site at www.dentalsales.com.