Ep: 154: The Hidden Math Behind Single-Doctor Practices

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Dr. John Meis (00:01.45)
Hey everybody, welcome to this episode of The Double Your Production Podcast. I'm Dr. John Meis with my partner, Wendy Briggs. Hey Wendy, how's it going?

Wendy Briggs (00:08.809)
Hey Dr. John, going great over here.

Awesome. So today we're going to be talking about the single-doctor practice. When I got out of school ages ago, know, most practices, almost all practices, in fact, were single doctor practices. And as the industry has evolved, there's more and more now multi doctor practices. But so the single doctor practice is, you know, kind of a special little, you know, kind of niche. And there's some things about that that can really have a dramatic difference on the performance.

Absolutely. We just had a meeting last weekend actually where we were visiting with doctors about this very topic and we were talking about all different practice styles and shapes and one of the things that we talked about is again the evolution from the days where it was one doctor, one hygienist and it stayed that way for 30 years. So many practices are evolving to be multi-doctor, multi-hygiene providers certainly, but there are still some doctors out there that want to build the best mousetrap they can and keep their solo status as a single provider location. So let's talk through that and let's talk about some of the pros and cons maybe and really what the ceiling is that one can expect from maintaining that practice style.

Yeah, and I think the ceiling is one of the cons of a single doctor practice. You can only do so much, right? And you can only get so productive and there is a ceiling. And so we have a couple of different ways of thinking about what that ceiling is. And so we know in a single doctor practice that's working normal hours, and mid-America fees, we know those can get to doing roughly $30,000 per up per month doing bread and butter general dentistry. Now, the more specialty you sprinkle in there, that may make it go up. The more you specialize on something, the more you focus on one specialty type thing, typically the revenue goes down, as does the profitability.

So that's kind of a number that you can think about. You know, in the practices that we work with in multi-doctor practices and single doctor practices, the award winner for the most productivity per op per month is about 110,000 per op per month. But this is a different animal because it's open seven days a week, it's open extended hours every day. And so that's a really kind of a different animal. But kind of for the typical 32 hours a week kind of dentist, 30K production per month is where it gets hard above that. You can get to that just doing typical stuff, but getting above that's pretty tough.

Yeah, I would also say, know, another ceiling that people often don't think about is how many hygiene providers you can have to support that solo doctor, right? Because there's only one person to do all of those hygiene exams. And that can be somewhat of a challenge too. We see, you know, the more providers they have to check off, again, we start to see their own productive capacity start to go down and that has an impact as well. And certainly we know there are doctors that do more than that, but they often are the ones that complain about feeling like they're on that hamster wheel all day long. And that's not always a pleasant place to be for very long.

And often not sustainable. so that brings, providers is a great point. For many years, it was one doctor, one hygienist, and then now one doctor, two hygienists is a very common thing. In fact, in some states, you could only have two hygienists. But what we see for most practices, and there are exceptions to this, but for most practices, when we go three hygienists, one doctor, we see the doctor's productivity start to dip. So we see their diagnostic assertiveness dive. We see their percentage of exams where something's diagnosed goes down. And so the overall performance of the practice with a third hygienist most of the time doesn't improve.

Another very common thing that people don't think about is, okay, at the end of my 35, 40 year run, however long that will be, is what are my options as far as practice value? There's a tremendous impact there as well. So let's talk about that for a few minutes because I think sometimes people don't start thinking about that until they're ready to transition out and that's far too long to wait.

Yep, I made the mistake of showing this can of low pH high sugar liquid that I know I'm going to hear about it from you.

Yes. Yes, well, I actually am looking here for my stuff that I usually have at the ready to elevate the pH of your mouth. So as long as you want to neutralize the pH, you're probably a good tip on that everyone, especially because I know for you, it's not a common habit. So it's okay.

Ha. That's right. I rarely drink soda, but I'm feeling a little like I needed one today. So, all right. So let's talk about practice value. It's an interesting thing because the more the practice is dependent on that owner doctor, the less valuable it is. So if we have, if the profitability is really driven by that owner doctor, so a high producer, for instance, a hyper producer, for instance, that actually lowers the value of the practice. And the reason it lowers the value of the practice is unless that provider is going to stay there for a long time, then whoever they put in there is not likely to be a hyper producer. And hyper producers are extraordinarily difficult to to grow. Right. It's kind of they are they aren't. And so that's why it reduces the value of the practice.

And that's why when we have single doctor hyperproducer practices, we often recommend that they get an associate in, that the hyperproducer starts to cut back on days and starts shifting treatment to the associate because now the potential loss of that hyperproducer has much less effect on the practice profitability and therefore the practice value.

Yeah. Another thing that we should talk about is, the decisions you're making now can have a tremendous impact on the value of practice long term. So just had this conversation, again, as a part of that meeting just a few short days ago where we were looking at how do they value a practice? A lot of doctors don't really understand that it's based on the profit of that practice. It's a multiple of the EBITDA or the profitability of the practice. And so when we have doctors that come to us and say, hey, we're really wanting to improve our systems and elevate the standard of care we provide, because I'm three to five years from transitioning out, we love to hear that because it does make a huge impact.

Even if you're towards the end of your runway, to really focus in on efficiency and improving your systems and improving your profitability, your production and collections, certainly, because that has an impact on how you are able to transition out as well. So Dr. John, we often get that question, like, how do they know when it's time to add an associate? You talked about why they should, but how do they know when it's time?

Yeah. So the hard fast rule is if you're getting scheduled out, if there's not enough doctor time, it's time to add doctor time. we can add capacity by adding doctor time or we can reduce demand. We can reduce demand by dropping insurances, dropping our marketing, increasing our fees. So those are ways to reduce demand. And however, those things don't necessarily improve the value of the practice.

Right, so if you think about many practices today are bought by DSOs. Well, DSOs, don't really like the fee for service model because people that really are successful in that fee for service model often are very charismatic people. They're often people that have been in the community for a long time and somebody new going in there. It just they found that it just doesn't work that well. So if you're not going to have DSOs or big group practices as part of who might purchase your practice, now you've got a narrower pool. And anytime you have a narrower pool of buyers, it's going to go for a lower price.

Right. So that could be a problem as well. And you know, another thing that we often hear is, gosh, you know, I'm not going to view my practice much longer. So I'm not going to update technology. I don't want to, you know, make these investments that I'm to be paying on for too long. And that really tremendously hurts the value of a practice. And certainly it makes it less attractive to potential buyers as well. We see that so often.

Yes. For sure. Yep. So it will affect the value. And if a group is looking at two different practices and yours is technology short and one's technology heavy, they're going to pick the heavy one every time. And so it really does affect the attractiveness and often the purchase price of the practice.

So when I was working at the DSO and we were buying practices, we would have a technology check. We would create a list and we would say, what's it going to cost to put this technology in? And we just take that right off the offer. So the person was paying for it anyway, even though, and he didn't get to use it in his career or he or her. And so it doesn't, you really don't save anything by not keeping current on technology.

And it's amazing how many times we saw doctors that were nearing the end of their journey invest in the technology and all of a sudden they found new life, a new appreciation for dentistry and it reignited the passion that they had, which again improves their performance of their practice, which again improves the value of it at the end of the day. It's this ripple effect that we've seen so, so many times.

So true. Yeah, so true. Yep. Yeah. So when people start saying, gosh, if I hire an associate, now I'm going to have more team members. I might have more hygienists. And now I've got complexity that I don't have now. Bigger must be harder. You we hear that all the time. And the reality is this. Is if you so we talk about this term rugged individualism.

And rugged individualism is, you got through school, you took the boards, you took the risk to buy a practice, you got the loans, you got everything going in the right direction and you do it yourself. And if you don't get over that, bigger could be harder. But the other way is you could get over that, right? And you can develop a team, you can learn to delegate well, you can learn to train well. And when you do that, bigger is easier. And I can tell you, my initial practice, a two-op office with three employees was in many ways more complex than when it's, when after years had gone on and we built and built and built, it was more difficult than our 21-op with 37, 38, 39 employees. So bigger is not harder, bigger is easier. You just have to do it differently and develop another set of skills.

Right. I know we've discussed this many times, and I'm sure you love when I always refer back to the loud voices on the internet that are promoting the hygiene-free model, right? They're ever-present. They never go away. It's like cockroaches. what's so frustrating to me is the ceiling they're placing on themselves, right?

Cheers. Yes. Spoken like a true hygienist there.

You can run a practice that way. You certainly can, but the value of that practice will never even come close to comparing to what you can build with a capable team. Which is why, again, when we started working together, we took our former company that was branded Brilliant Circle and we shifted it over to the Team Training Institute because literally that is what drives the most successful practices that we work with. It's the team, dentistry is a team sport. And building a team-driven culture and structure and having systems in place. They do allow the doctor to have more freedom, more peace of mind, more profitability with less effort. You can build it that way. If you build it, they will come, philosophy. It absolutely does work. And I know we've got a podcast coming up in this schedule where we're gonna interview one of those doctors who went from seven employees around the time of COVID to now close to 60, maybe even more than that. Yeah, a really rapid turnaround. And he's gonna be the one to share with you what that looks like in his journey and how he was the ones who thought that bigger was harder and he's learned that the otherwise is true. And certainly we'll have to ask him the hard questions about what that actually did to the value of what he's built.

Yeah, he's over 60 now, yeah.

Because a lot of people don't think about that again until it's too late. So that's one of the reasons why we wanted to have this conversation.

So a hygiene-free office sounds simple. It sounds wonderful. But your income will never be as high. The value of your practice is never going to be as high. And it may be a really wonderful way to practice. And you may want to do that. But there's pros and cons to every practice model. And that's the cons of that.

100%. And back when you were running your main Sioux City facility, before you expanded that to 15 locations, you were doing a million dollars in hygiene a year before we even started. And once we actually started really working on some of these systems and refining that, it was significantly higher than that. So these other practices are like, do a million dollars a year. Well, you were doing that in hygiene alone. And that is, I think, commonly missed.

Yeah, in the mid-80s, or mid-90s. Yeah, so true.

Let's go. Mid-90s, right. So true. Well, good. I'm glad we had this conversation. those that are listening to this, if this is an interesting topic to you, we will be diving into this topic. Our January Doctors-Only Retreat is being held in Las Vegas. And profitability is going to be one of the things that we'll talk about there. We love our Doctors-Only Retreat. This is the second time we've done a Doctors-Only Retreat. The first one was wildly successful.

Every doctor that was there said, you please do this again? It was really, really helpful to dive into the financial sides of the practice that maybe the team doesn't care to learn about, or maybe even some of those topics aren't appropriate to share with everyone on the team. A lot of really great insights happened at that retreat.

Really focusing on what is the machine of your machine and how do we make that machine even better? And how do we look at that over many years, not just today and tomorrow and next month, but what does that look like over a period of time? It's going to be a fabulous retreat. This doctor only is, think, our clients' favorite retreat. I mean, they rave about it. And so, yeah, it's going to be fantastic.

They absolutely do. can tell you, registration is open for our current members. So if you're a member listening, you can go ahead and get registered for that. If you are not a current member and you'd like to check it out and see what it's like to attend a retreat, we have a few guest passes reserved for the right people. And you can request that guest pass pretty easily. You can go to our website, www.theteamtraininginstitute.com/guest and get all the information about what that would look like. It is going to be a fabulous retreat. We've got the agenda going right now. And interestingly enough, Dr. John, you were mentioning earlier about performance of the team and all of those really critical systems. We actually also have a High Impact Teams course running concurrent with this doctor only retreat. So all that great information is available for you on our website and we would sure love to have you join us at our Doctors-Only Retreat, we'll be digging into profitability and other really key, important, critical topics for those who want to continue growing and have a better 2026 than ever before.

So the High Impact Team course is held in a separate room, same location, but different room. And they're going to be talking about topics of leadership, the soft skills that are required to have an effective team. There's role specific breakouts for admin team members, hygienists, and assistants so that they perfect their craft. It's a fantastic meeting and always gets very high reviews. So hope to see you in January.

I think we have seven guest spots available at this point, so check us out.

We do.

Thanks everybody.

Ep: 154: The Hidden Math Behind Single-Doctor Practices

Ep: 154: The Hidden Math Behind Single-Doctor Practices

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