DMD/MBA?

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flat4

flat4

Mullet Redesigner
20+ Year Member
Hey guys,
I was wondering how useful an MBA is for private practice. I know the joint degree at Temple is very stressful and I'm wondering if it's worth it. Many dentists I have spoken to have said that they wished they had better business training in dental school and recommend that I take advantage of the program. Would I be better off just taking some financing and accounting classes? Any thoughts?
 
I am under the impression that an MBA is geared more towards things like corporate finance and management - not particularly useful stuff for the small business owner. I don't suppose it would be completely useless education, but those two years might be better spent elsewhere. 🙂
 
I believe if you can get an MBA that would only help you. As a dentist you must not only be clinically oriented but also business minded as well. Your friend is right, most dental schools do not emphasis enough business/management skills. I would do that Temple combined degree if you can, you'll graduate in four years regardless and it is free.

I'll definately will be applying to PENN's combined DMD/MBA program for sure.

DesiDentist
 
Just to help everyone out here with the DMD/MBA question, I elected to pursue an MBA before dental school?figured I?d be burnt out after dental to do anymore. Anyways, it is true that most programs are directed towards running large corporations, but all of these principals still apply to small business (small business meaning from one dental office to around $300 million in revenue).

There are many physicians and dentist in my program and they all agree it is helping them a lot. I will make some recommendations: when you take elective classes make sure you choose them wisely. For instance my electives were Real Estate Investment Analysis (need an office), Health care marketing and planning, Health care law, and Employment law.

Now many of you may have this perception, as I did, that business school will be easy. Granted it is not as hard as dental school, it is very demanding. For example, my information systems management class required 25 3000-word case study analyses in a 10-week period. There is a tremendous amount of research and writing to be done granted your program takes a ?Harvard? approach, which is case study based. I recommend you go to a school that takes the case study approach since you have to apply your knowledge to real world situations unlike the perfect world of examples in books.

To save for dental school, I do some work for local physicians and they are amazed with how much I can improve their processes and bottom line.

Here is a dental example I did for one of my classes: (this data is from 1996 bec I couldn?t find anything newer) Assume an average solo dentist works 1,800 hours in the office per annum and has three operatories so his capacity is 5,400 chair hours (1800x3). The average dentist will work 4,500 of the 5,400 hours leaving 900 unused hours. Since we only get paid for our work we better pick that up some how. Assume $300,000 is gross income (GI), Variable expenses(VE) are $150,000 and fixed expenses are $50,000

Break even point in chair hours will be?
First some calculations
($300,000/4,500hr)= $66.67 GI per chair
($150,000/4,500hr)=$33.33 VE per chair
$66.67-$33.33= $33.34 break even per chair

so break even in chair hours is ($50,000/$33.34)= 1,500 chair hours to break even per annum

Now to address the 900 excess capacity:
Ok some of this data is old again but it?s the concept I?m trying to get across

Assume that a dental HMO (DMO) has a capitation rate of $5 per month per patient with co-payments averaging about 50% of capitation payments. 71.4% of DMO patients visit their dentist each year around 4 times with each visit around .75 hours, so each patient needs around 3 chair hours a year.

So the max number of new DMO patients a dentist can acquire is:
(900 unused capacity/ 3 hours per DMO patient per annum)= 300 extra patients
But only 71.4% show up so the dentist could acquire (300/.714)= 420 patients

Now the DMO will pay you per patient if they show or not ($5 x 12)=$60 per patient per annum
Now $60 x 420= $25,200 extra from adding the 420 patients
Now 300 patients will need service (remember only 71.4% use their DMO) so with copay 50% of capitation is $30
So $30 x 300= $9,000 from copays per annum

Add the two ($25,200 + $9,000)= $34,200

But you have to subtract the variable expense per chair hour which is (900 x $33.33)= $30,000

So the dentist will have a gain of ($34,200 - $30,000)= $4,200

Now this doesn?t add the built in profit from the procedure, this is what you get from acquiring the additional DMO patients should you want to deal with them

Any questions just ask and I?ll be glad to help.
 
opps...sorry about all the miss spells...I need to slow down when I type long comments🙂
 
Uhhhh...yah...okay. I think I'll just skip the MBA and hire you when I'm ready to start a practice🙂 . I tried reading your post like 10 times and I'm still confused. But I get the point your trying to make...an MBA will help make your business run more efficiently. I'm still worried about burning out trying to juggle all those classes. From what I've been hearing, dental school is a feat in itself. I guess I can kiss any notion of a social life good bye.
 
Well many of the doctors in the program I'm in have been practicing for 5+ years. So its something you could always go back and do...it will just take alittle longer since you will have a practice and probably a family. Its all about opprotunity cost (a very important statement in the biz world 😀 ). I would suck it up and just do it or if you have the opprotunity go to biz school first like myself then dental. It doesn't take too much time...i'm only 23 so I won't be the oldest in the dental class.
 
I have recently completed my MBA so maybe I can offer some insight. First of all, I would recommend for those of you who are considering an MBA just to enhance your private practice managerial capabilities to reconsider. Most MBA programs are geared solely toward the management of corporations rather than entrepreneurial or small business affairs. For example, a corporate finance/investments class may spend half of a semester doing a top down comprehensive equity valuation of a firm or discussing the signaling effects associated with acquisitions/stock repurchases?..things that will obviously be of little value to you in a private practice setting. Don?t get me wrong, certainly things that are covered within any MBA program will be of some use to physicians, but many of these fundamental principles can be self taught for a few hundred dollars earmarked for the purchase of a few fundamental textbooks on-line. I would recommend picking up a fundamentals of corporate finance text. This will cover the basics of time value of money, cost of capital, buy vs. lease decisions, market efficiency theory, etc?..essential stuff that will aid you in the financial management of your practice as well as aid you in your private investments. I would also recommend a basic accounting text, one that stresses small business accounting and taxation. Lastly, I would recommend a book titled something along the lines of ?small business for dummies? (a subject that I am rather weak in myself). Such a book will cover things such as quarterly tax/social security filings, basic HR management (ie. what can I ask an individual on an interview?), the constructs & taxation of a personal corporation, etc.
Click to expand...

Above is a response I offered to a similar post in the Allopathic forum. I think my advice applies equally well to the dental profession. Just my thoughts on the subject, take them with a grain of salt???..Gilbert
 
I some what agree with Gilbert bec that is what my mentor did. The biggest thing is that you have to choose your program carefully. At UNF, where I attend, we have a track for people in the health profession. The only disadvantage of doing it yourself vs. getting an MBA is that you do a lot of trial and error with your OWN money. Where as in the MBA you practice with other peoples money. For instance our program has $500,000 of real money that students work with. Our losses are real losses and pissses off the profs.

Either way you will get the experience...one way is just faster than the other. As gilbert said get a good Accounting, Finance, Marketing (get one from the author Kotler), and Managemnet book.

Its all up to you guys and most likely if you have a practice and family you will elect the self-teaching method.

Let me know if anyone needs more info. I promise I will give a non-biased anwser since i've seen it both ways
 
MBA? I'd say go for it if you really want to and think you will have the time and motivation for it....hey what's another degree for the resume (especially if it comes at no extra charge!), but I agree with Brocnizer2007 that you can always get one later. First things first?
 
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