Bridging the Way: 2003 Student Event
INDEPENDENT CONTRACTOR
Richard S. Finlayson, D.D.S. joined the Air Force in 1975 as a general dentist, and was accepted for periodontics training in 1981. He graduated from Wilford Hall USAF Medical Center in 1984 with a certificate in periodontics. Upon graduation, he served both as a clinician and periodontics instructor in the Air Force graduate programs for 19 years retiring in 1999 with 23 years of service. After retiring from the military he became an independent practicing periodontist in San Antonio, TX. A board certified periodontist, Dr. Finlayson has been a member of the Academy since 1981.
What was your ideal plan after graduation?
My situation was a little different in that I started my “private practice” career after a 23-year military career, with over 19 years as a periodontist. Initially, I wanted to become an associate in a practice with a chance for a buy-in at a later date. I also contemplated working in one of the large dental groups, which had a mix of both general dentists and specialists in a group practice similar to the military environment.
What realities did you encounter?
In my area (San Antonio, Texas) there are many periodontists with few positions open for associates in the private sector. The associate positions that were available happened to be with practitioners who wanted an immediate “buy in.”
The large dental groups were even worse. All of their dentists were paid on “production,” which was roughly 20-25% of collections, averaging about 21% after they paid their lab fees. Therefore, they were not willing to refer periodontal procedures because they wanted to do them as part of their overall “productivity.” Also, in this situation, there was tremendous turnover of young dentists in these groups. Many stayed in the group for a while, became disillusioned, and then moved off to start their own practices. This made it difficult to establish new professional relationships with these doctors. The established doctors felt little need to refer because they handled it.
Also, a high-pressure office manager who got paid on the overall productivity in the office managed the practice; therefore, control of the schedule was lost. It was always overbooked and one would have to “cut corners” on quality of care to survive in this environment, and make a living. Hygienists in this office had 30 minutes to treat patients; needless to say, care was not as optimal as it could have been.
What appealed to you about becoming an independent contractor?
- First of all, minimal overhead, minimal initial investment.
- The ability to quit or take vacations with fewer repercussions.
- Fewer employee problems/office management problems.
- Minimal paperwork/insurance filing.
- The ability to work side-by-side with my referring dentist in the same office. It is a great way to “educate” a general dentist about what a periodontist can do. A very satisfying form of professional relationship.
What variables influenced your decision of becoming an independent contractor?
- My age, amount of time I would be actively practicing. I didn't want to have to “die at the chair” from paying off a large practice debt.
- My retirement plans. I would like to retire to working only 2- 3 days per week in the next three years. This would be impossible if I had a large debt to retire.
How did you go about searching for an independent contractors position?
I let it be known through the local dental society that I was looking for such a position. I visited with dentists in the area I live in asking them if they would be interested in such a service. I wanted to work for large successful practices that could keep me busy in their offices.
Did location factor into this situation?
Yes, I initially decided to work with whomever I could. After a while, I decided it would best to localize my efforts on the side of the city where I lived. Also, my services were really prized in practices in affluent suburbs where patients did not want to drive into the city for care. This allows you to “pick your practice” and “put yourself where the money is.”
Please explain your financial compensation arrangement.
Some of my compensation is based on a 60/40 split. I get 60% of the collections/not production. I pay for my assistant and all supplies. The general dentist provides room, equipment, front desk and administrative support.
Other dentists wanted a 50-50 split with them picking up the costs of all supplies as well as splitting the cost of more expensive items such as implants, membranes or bone. This is a little more difficult because you must keep records of materials used at each surgery. Again, I pay for my assistant.
Do you believe this is a good form of practice?
Yes and no. Yes, for someone in my situation who does not want the hassles of running an office and who does not want to work full-time. Also, it gives you a lot of good tax write-offs!!
This may not be a good form of practice for someone who needs the income of a full-time practice, plans to work for a long time in one location, and who enjoys the management challenges of running a practice.
What are the pros and cons of this situation?
As mentioned before, the pros are no administrative headaches related to office management or filing insurance forms. It also has minimal overhead since the only employee is the assistant. Other pros include:
- General dentists LOVE having a specialist on their staff. It gives them and their practices more prestige than surrounding practices that don't have this option. The prestige and additional income generated from specialty referrals is a great combination for a general dentist's practice.
- Most patients like not having to go to a distant, unfamiliar office for specialty care. An “in-house” specialist receives specialty referrals in the practice.
Cons are as follows:
- You must keep accurate records for each office regarding patients seen and monies collected. This is easier with the new office management computer programs, and if you trust your dentist, you may rely solely on their figures. My philosophy is if someone is going to cheat you, they will figure out a way to do it, so work with people you trust.
- Finding an assistant who doesn't mind traveling and who is able to get along with a number of different office personnel and personalities. This is more difficult than you think as two disgruntled dental assistants in one office destroyed one of my specialist/general dentist relationships.
- You can never benefit from your patients after they have completed their surgical treatment. Generally surgical patients become maintenance patients who provide a more or less steady income during the following years. You will never profit from these patients.
- Without having an office, these patients go to the general dentist and the only money you make is when you are doing surgeries, no maintenance patient income.
- Age differences between myself and the local dentists, many of whom are younger. This was somewhat of a surprise to me but as I discovered, many of the recent graduates wanted someone who was more or less their same age, or who had graduated from the local dental school that they may have been classmates with. I was significantly older and had graduated from a dental school in another city. Also, the older dentists I met already had referral sources established earlier in their careers and it was hard to break into these already established professional relationships.
- Not having enough patients in a single practice to keep you busy. Some of my practices have only a few referrals so I only give them 1 or 2 days a month so they can fill them up. Another one of my practices gives me enough patients to fill up 1-2 days a week. You just have to schedule them so that you don't have a lot of free time seeing only one or two patients. This means letting the office manager know how to schedule your patients to make your visits more effective.
- You are limited in getting patients only from the dentists you work for, as most general dentists won't refer to you while you are working in another general dentist's office.
Did you benefit from this situation? If so, how?
Yes, I did benefit in that I now work for a number of very fine general dentists who appreciate my work and also consult me for difficult restorative treatment plans. I basically have the freedom to come and go as I please and can schedule time off easier than when I was in private practice. I don't have to “shut down the office” but continue paying employees in order to take some CE or go on vacation. I also have minimal time invested in the administrative and management parts of a practice.
Why is the independent contractor frowned upon in the profession?
Probably jealousy! We make about the same money with none of the headaches! It's hard to compete with specialists who will come to the office of a general dentist to provide services there for their patients.
How did this experience affect your plans and decisions about your career and future?
So far, this is fitting my plans for my “future” practice well.
What risks were involved?
Only initial set up expenses totaling about $15,000 for equipment.
What is your situation now?
Stable in that I work for dentists with which I have a good rapport. Work in the part of town I like, have minimal overhead/administrative problems and can walk away from it any day I want without bankruptcy.
What resources did you find the most helpful?
Face-to-face contact to “sell your services” was about the best way to get started. I advertised on the Internet through the AAP Web site, and in the local district dental society newsletter and local phone book. I teach one day a week at the dental school, which helps keep me before the younger dentists.
What suggestions do you have for individuals transitioning into an independent contractor arrangement?
Go out and “sell yourself” to local dentists who have large practices in affluent areas of town. You need to work for someone or a group of general dentists that can keep you busy. Get your own dental assistant to work with you. It will make your life much easier. If you rely on the general dentist to provide one, you will generally get the one that is least experienced as the best one is working with him!
Find Out More
- Starting as an Associate, E. Todd Scheyer, D.D.S., M.S.
- Starting as an Associate, Benjamin Duval, D.D.S.
- Partner's Perspective, Charles Chen, D.D.S.
- Seller's Perspective, Michael Hersh, D.M.D.
- Starting Your Own Practice, Wayne Aldredge, D.M.D.
- Starting Your Own Practice, Deena Kuempel, D.D.S.
- Buying a Practice, Nicholas Caplanis, D.M.D., M.S.
- Buying a Practice, James. D. Spivey, D.D.S., M.S.
- Independent Contractor, Eddie Zupnik, D.D.S.
- Fictional Example of Contractual Agreement Between Partner and Associate
- Fictional Example of Contractual Agreement for independent contractor
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