Contract for Associateship

[PullinTeeth]

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I am graduating this May and received a contract to practice as an associate for a dentist in my home town. I think that this is a good contract, but I was told that if I wanted to make any changes to feel free to make the request. I was hoping a few of you could look over the specifics and tell me if this is a solid contract or if I should ask for any changes.

The contract is for $125/hour, 8 hours/day, plus 30% of any collections over $1000. After 6 months it changes to simply 30% of collections. The practice will pay for all lab fees and supplies and will supply patients. I am required to pay for liability insurance. There is a restrictive covenant of 2 years and 10 miles.

My only concern is that this is the town I want to settle in forever and I worry that if there isn't an opportunity to buy in or purchase the practice down the road, I will have to move away for several years. Also, what is a realistic expectation of collections 6 months in?

 

[OhioDMD]

I am graduating this May and received a contract to practice as an associate for a dentist in my home town. I think that this is a good contract, but I was told that if I wanted to make any changes to feel free to make the request. I was hoping a few of you could look over the specifics and tell me if this is a solid contract or if I should ask for any changes.

The contract is for $125/hour, 8 hours/day, plus 30% of any collections over $1000. After 6 months it changes to simply 30% of collections. The practice will pay for all lab fees and supplies and will supply patients. I am required to pay for liability insurance. There is a restrictive covenant of 2 years and 10 miles.

My only concern is that this is the town I want to settle in forever and I worry that if there isn't an opportunity to buy in or purchase the practice down the road, I will have to move away for several years. Also, what is a realistic expectation of collections 6 months in?

You probably need more information about the practice to determine whether this ia a good offer or not. At face value $1000 per diem plus 30% bonus is a fairly good offer especially if you are an employee of the practice and not an independent contractor. What you make after the first six months is totally up to you, the practice and the patients. Assuming you are working 4 days per week and the practice collects 100% of what you produce then the practice will have to collect $13,333 per wk and $53,333 per month of your production if you are to stay even with the current offer after the first six months. Which usuually means you had better be busy because you won't be putting up those numbers sitting on your hands.

As for the part I highlighted, If you are serious about the area then it would be in your interest to negotiate a buy-in before you start or at least a negation of the non-compete if you cant negotiate a buy-in say after two years. Let's assume another dentist in the area decides he wants to retire sometime during your employment. With the current non-compete then your stuck for 2 years even after you leave the practice. If you are not seious about practicing within the 10 mile restriction then it probably doesn't matter.

Caveat: You really should have an attorney familiar with a dental practice advising you.

Best wishes, congrats & good luck
OH-DMD

 

[PullinTeeth]

Thank you for your response. I am very serious about practicing in this area so I hope that we can negotiate a buy-in. I have a question about daily production. If there is a steady flow of patients, is $3000/day reasonable 6 months in? Is it possible to produce 4 or 5 thousand? I really have no idea. Also there was no mention of health insurance or a guarantee of a certain number of days per week. Are these things usually included in the contract?

 

[OhioDMD]

Ask your potential employer for some current data. Number of active patients, number of new patients per month, current monthly production, number and type of procedures done to give you a feel for the practice. PPO, FFS,Medicaid patient ratio. If the practice had an associate before? How was their numbers. Contact them if possible to give you their perspective on the practice,staff and employer. Read diligently the "Practice Transitions " forum on dentaltown especially the associates corner for some insight on private practice.