Retirement – a complicated journey

With a significant percentage of the workforce heading towards retirement it might help to know what one practitioner has experienced as they move towards finishing their practicing life as a dentist. Being a member of the Guild/ADA Liaison Group and working toward retirement it is my lot to relate this issue.

Being a dental practitioner is harder than most of the community understand. The pressures are great to meet complex diagnostic presentations and consistently produce high quality technical/restorative results. This must be matched with motivation and enthusiasm to see through the long stressful hours. As a practice owner we must also be on top of the increasing burden of bureaucracy, administration and the employment of staff.

The decision to retire

A couple of years ago I decided I would like to commence winding up full time practice at about 65. I wished to finish my dental career whilst I was still able to do the work at a standard which my long standing patients had come to expect. Whilst it is satisfying and rewarding to be a dentist, the postural rigours of the decades, the endless pressures of time lines and the patience required with our work, all take their toll and there is no doubt that burn out is real.

Partnership pressures

To drop a day or two a week seems a good start but as a partner in a multi partner practice with fixed overhead obligations, such a cut back would generally make it non viable to remain as a partner.

In order to cut down I must offer my partnership share to the remaining partners or to someone new. Our multi partner practice has mostly employed assistant dentists but only some of these wish partnership.In addition it is imperative that they are compatible with the ongoing partners.

Finding the right partner

Our practice required an experienced dentist who was ready to commit to practice ownership, who could see the attributes and viability of the practice into which they were buying and who was acceptable to the other partners. Ideally they would work for a time as an assistant dentist working in parallel with myself. They would gradually take over patients who wished to stay within the practice, as my “slow down” occurred.

Communication through a network of dental colleagues resulted in an initial contact with an interested practitioner 12 months prior to my intended target for change over. Informal meetings commenced with discussions about work styles, expectations and timelines for entry. Once the other partners had agreed to the dentist’s suitability we moved to open exposure of the financial reports of the practice over recent years.

The financial details

Valuations of property associated with the practice were obtained as well as a valuation of the practice itself from a very well known practice advisory group. These tangible and professional valuations under pinned the worth of the practice and whilst values are often in the eye of the beholder they were broadly sustained by the potential new partner’s independent assessments.

Copies of all Partnership and associated structure Contracts/Agreements were progressively offered as well as ongoing financial figures as the months progressed.

Whilst unencumbered property ownership provides a tangible asset to the practice and is a visible part of the purchase, “goodwill” or “opportunity cost” as some accountants term it, still has significant worth. There is wide variation on the value of goodwill but there are formulae related to annual income from all practice sources that can be applied with some validity. Factors such as location, financial indebtedness and judgements of underlying “soundness” will influence the purchaser’s confidence that the cost is reasonable.

Getting the right advice

It appears to me from colleagues who have recently been involved in exiting dental partnerships that purchasers have upper limits and a practice with too high a price will not attract interest. It is also related that some accountants to dental practitioners have not offered advice that is attuned to the sale of a dental practice. Dental practices are a little unique in their value.

The new Partnership in turn needs to review the currency and adequacy of its formal Contracts and Agreements.

The costs of legal and accounting advice and documentation is appreciable but is essential to ensure that the process obeys the law and accounting rules and protects the interests of all parties. Capital gains tax liabilities are triggered as well as various transfer duties. Overall the process is quite complex but necessary.

The handover process

The opportunity for the prospective partner to work within the practice prior to partnership occurred and this has proved valuable in enhancing the confidence of both parties that the change over will work. The presence of the future partner will also facilitate the transfer of patients.

A meeting of the prospective new partner and myself, along with our respective advisers occurred to iron out any sticking points and then letters of “Offer” and “Intent” were exchanged. Subsequent to this, lawyers were engaged to draft a formal Sale/Purchase Agreement to cover every detail of the transfer of ownership of the Partnership Share. In association with this a timetable of the processes essential to the transaction was produced.

Impending retirement

This move towards retirement has had its stresses as each stage proceeds. The prospect of working fewer hours is looking quite attractive. The eventual cessation of private dental practice is a little more daunting but it is inevitable.

Every dentist’s pathway to retirement will differ but sometimes it is good to know what others have done as you consider your journey.

Good luck and good health to all my colleagues who are on that similar journey.

By Bruce Noble – General Dental Practitioner, (Member Guild/ADA Liaison Group)

Preparing for success – new graduates

New graduates are the future of the dental profession. The NSW Branch of the Australian Dental Association (ADA NSW) firmly believes that the entire profession has a responsibility to integrate new graduates into practice. All dental graduates should be given professional support and opportunities to improve their knowledge and practical skills in order to achieve enhanced levels of competency. It does not benefit patients, the employer, the employee or the profession in general, if new graduates are expected to deal with situations that are beyond their experience.

On the whole, new graduates in the dental profession are well educated, but it is agreed that they have limited experience and ability to deal with the immediate and growing demands of today’s dental practice. 10 years ago less than 5% of 1st year graduates had reason to notify the Dental Defence Advisory Service (DDAS) of a complaint that arose from their treatment of a patient. Within the last couple of years approximately 15% of 1st year graduates had reason to notify DDAS. New graduates who change practice locations in their first year, they are significantly more likely than any other group to require the services of DDAS in their second year of practice. It is quite reasonable to say a new graduate’s first job can make or break their career. It is for this reason that ADA NSW believes it is important that employers carefully consider how they are going to support a new graduate.

Employing a new graduate carries certain responsibilities and requires greater input and support from the practice than employing an experienced dentist. It is important to recognise that not every practice has the resources to employ and appropriately support a new graduate. ADA NSW believes that graduates should be given as much assistance as possible from employers and experienced colleagues to improve their knowledge and skills, and to interact with other oral health professionals. Employers should not employ an inexperienced dentist, or new graduates, unless they are capable of, and willing to provide the required level of support.

Start the relationship right

All employees should have a written employment agreement and new graduates are no different. By accessing and utilising template employment agreements from the ADA HR/IR hotline on 1300 232 462, a practice is able to support a new graduate right from when the offer of employment is made. Employment agreements help to define and specify responsibilities, salaries, after-hours requirements, responsibilities to patients and terms of separation should the professional relationship end.

Once the new graduate commences work, it is of paramount importance that the practice principal and staff have a positive attitude to the employment of a new graduate and so provide a supportive work environment. Practices must take into account that new graduates may not have had the opportunity to develop sufficient competence or communication skills to perform at all times to an accepted standard. A new graduate needs immediate access to the advice of an experienced dentist for the first several months in practice (this time will vary depending on the new graduate, but will probably be 3 – 6 months). This advice may be available by telephone, but the physical presence of an experienced dentist is often more beneficial, particularly to assist and provide guidance in diagnostic and treatment procedures. Experienced practitioners must be physically available for consultation and practical help when new graduates are completing treatments which require a higher level of technical competency. In small practices with only one other dentist, the experienced dentist should make arrangements with a colleague or neighbouring practice to provide meaningful support for the new graduate when the experienced dentist is unavailable.

Professional Introductions

One of the best parts of being a professional is the collegiate support from others that in the similar positions as you. It is advised that a new graduate is encouraged to integrate with members of the practice, the profession and the wider health profession. Every effort should be made to involve new graduates in ADA NSW branch activities, like divisional or Recent Graduate functions, and allow attendance at continuing education courses and conferences (new graduates are required to complete a Continuing Professional Development Return in their first year of practice). Of equal importance, the employer or senior dentist should make time to introduce the new graduate to other local practitioners and where the new graduate is taking over the care of existing patients of the practice, the principal or senior dentist should provide the new graduate with a professional introduction to the patient.

Continuing to improve the relationship

To further build a positive work environment where all involved can deliver optimal dentistry to patients, a formal induction of new employees into the practice is highly recommended. Induction should cover workplace procedures, customer service, drug prescriptions and staff responsibilities. Employers must ensure that new graduates are adequately trained in the occupational health and safety policies and procedures of the practice.

Provide Opportunity for skill enhancement and feedback

The employer should ensure the new graduate has access to skill enhancement sessions with a senior practitioner at regular intervals. This could be through discussion of case studies with other dentists in the practice or regular reviews with others in the practice covering a selected number of cases handled by the new graduate. The review and feedback process should be conducted in a supportive environment. Skill enhancement includes general communication skills as well as medical and surgical skills.

For the best outcome it is recommended that a supervision plan be agreed upon and documented prior to the commencement of practice. The aim of any structure supervision session should be to build the new graduate’s confidence and empower them to make sound decisions about their skill and procedures they can perform.

New graduate responsibilities

A lot has been said about the responsibilities of the employer and the entire team, but we all know that this is not a one sided relationship. New graduates hold equal responsibility in this equation. It is an exciting time to be finishing a lengthy time at university and commence working, earning an income and delivering services to the community. Before a new graduate is swept up by the promise of participating in the profession they have studied so hard to be part of, they should realistically assess their career needs and interests before accepting employment. Knowing what you want and where you want to work is really important. Money is not everything, a new graduate should make a realistic and fair commitment to their first job for at least 12 months, unless unforeseen circumstances arise or employment conditions are untenable. While at the practice the new graduate should be familiar with and appreciate the practice philosophy and objectives (including the payment of accounts, treatment of bad debtors, treatment of patients and dress standards). Above all, a new graduate should appreciate and respect the role that staff play within a practice; staff can impart much knowledge and experience to the new graduate, and this and their roles and responsibilities in the practice should be respected. This includes respecting the role that more experienced clinicians play in assisting whenever the new graduate’s own experience or knowledge is limited.

Decision to employ a new graduate

If you are considering employing a new graduate in the practice, get advice from other practice principals that have employed recent graduates, use your own network. Employers should recognise that they have an obligation to provide support, guidance and assistance to new graduates, and to inexperienced dentists. This will inevitably result in a higher standard of dental service, improved patient relations, and the enhanced standing of the profession.

New graduates should recognise they have a responsibility to their supervisor, mentor and the employing practice, and acknowledge the support provided to them during their first year of practice. Above all, employers should not employ an inexperienced dentist, or new graduate, unless they have the capacity and are willing to provide the level of support detailed above.

By David Sweeney – (ADANSW)