Is 28% of adjusted production normal?

[toothlover1]

Got my first offer. Its a private group with 5 clinics. They primarily do cosmetic dentistry. Ive been told that DSOs tend to pay like 32-35% of production. So would 28% be considered lower? Its also adjusted production, so I dont know what that exactly means either. Also there is no daily minimum which worries me a bit.

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[P7898]

That is trash. Adjusted production is after insurance slashes the practices fee. So if the practice charges $1200 for a crown but the PPO is only $800. Then you get the $800 from the crown 28% of that. In addition, I would come back with a 31% production as a negotiation and then meet in the middle at 30% if they give you backlash. A daily minimum is a must though. Your time is valuable (at least I like to think my time is).

To me this sounds like they do not have enough patients to give you a daily minimum. In addition, they are not willing to pay you well because they re trying to take advantage of a new graduate. Renegotiate the percentage and do at least $600 daily minimum. I am pretty sure this is even the minimum for Aspen. Cheers.

 

[toothlover1]

Thanks for the insight. So when speaking to the office manager, they might give me a few months of guaranteed pay though, but I have to wait for the attorneys to draft it in the contract. Does it make a difference for cosmetic dentistry since insurance isnt really involved as much? Most are out of pocket. I do understand the general issue about adjusted production.

 

[Rambunctious]

Got my first offer. Its a private group with 5 clinics. They primarily do cosmetic dentistry. Ive been told that DSOs tend to pay like 32-35% of production. So would 28% be considered lower? Its also adjusted production, so I dont know what that exactly means either. Also there is no daily minimum which worries me a bit.

You have to find out of its 28% of total production and find out what the average production is per provider. If each provider is averaging $5000-$6000 a day then 28% of that take home is really good.

 

[nobeldds]

Very normal. 28% of adjust production is standard for any dense metropolitan area of the US.

Being paid on straight production is rare, and I would not expect to find work that pays that way. I would consider pay based on Adjusted production to be fair, and it is significantly better than being paid on collections. In a well run office, your adjusted production would end up being the same as collections, but your pay will lag 2-3 months and it will be harder to keep track of to make sure that you are being paid properly. There is also potential for collections to be far less than adjusted production in a bad office.

Generally expect 25-35% of adjusted production without being expected to pay any lab fees. Make sure you know if you will be paid for radiographs and hygiene checks to get the full picture.

It would be beneficial to know the types of insurance plans the office accepts (ppo/hmo/government). I’ve encountered offices that call themselves cosmetic but are in network with all the above.

 

[Screwtape]

Seems reasonable in a competitive area.

 

[allDAT]

Location dependent. GPs in SoCal get about 25% of adjusted production or collections.

 

[AONLINE]

I agree that OP should not start with straight % of production, definitely try to get a daily minimum. On a related note, what do y'all think of a job that only offers a daily guarantee of $650/day (5 days/wk) but no % production/collection? I'm a new grad, no GPR/AEGD, I expect myself to be somewhat slow when I start. Should I take the job, get my speed up, try to learn as much as possible then get out after 6 months or so?

 

[Screwtape]

I agree that OP should not start with straight % of production, definitely try to get a daily minimum. On a related note, what do y'all think of a job that only offers a daily guarantee of $650/day but no % production/collection? I'm a new grad, no GPR/AEGD, I expect myself to be somewhat slow when I start. Should I take the job, get my speed up, try to learn as much as possible then get out after 6 months or so?

Really depends on how hard they are going to work you. Assuming you could be paid 30% collections, if you average above ~$2150 collections per day then you’ll be losing out. If you collect less than $2150 a day then you are winning. You can play with different percentages that may be more in line in your geographic area. When I was an associate I always preferred minimum and collections percentage, whichever is higher. Keeps you happy when you get busier. Depending on your fee schedules and collection rates $2150 could be very easy to hit to challenging as a new grad. Again depending on your location, $650 is decent for a brand new grad so you may take a hit there if you also ask for commission. Funny enough, $650 was my daily minimum as a new grad dentist (1 year GPR), I started beating it in 6 months. After 9 months, I would have been making the owner an absolute killing if I was pegged at $650 a day.

 

[allDAT]

I agree that OP should not start with straight % of production, definitely try to get a daily minimum. On a related note, what do y'all think of a job that only offers a daily guarantee of $650/day (5 days/wk) but no % production/collection? I'm a new grad, no GPR/AEGD, I expect myself to be somewhat slow when I start. Should I take the job, get my speed up, try to learn as much as possible then get out after 6 months or so?

Not if it’s corporate. They won’t pay you a % of collections because they know they’re gonna work you and they want to increase their profits. You’ll be doing 4K a day and getting paid less than 20%. Demand a % of adjusted production or say no thanks.

You won’t be slow for long.

 

[frozenicecreamDMD]

It's 5 days/wk so $156k/yr, they also offer a sign-on bonus and some other incentives of $25k so the total compensation package would turn out to be $181k for the first year. Location: small college town in the Midwest, 1.5 hour from a major metro area so not even rural. Definitely not bad for a new grad so I am not complaining about the pay. The big cons is that it's a DSO with all the typical corporate BS.

There is a senior doctor that I'll be working with at that office. They told me that in the beginning I can take my time with procedures and they will ramp up my speed and patient load little by little. I expect to collect below ~$2150 when I start out and hopefully I can beat it by 6 months just like you (maybe a bit slower than you did since I do not have a GPR). I would not even complain they work me too hard, maybe I can treat it like a paid 6-month GPR and leave right when I start beating the minimum? The contract makes it very easy to leave, there is no non-compete.

you are losing out getting paid 650$ a day with no % adjusted production/collection, it is a joke to collect 2150$ a day...you can do 10 exams/10 prophys and 5 fillings and that is 2k.

 

[Screwtape]

There is a senior doctor that I'll be working with at that office. They told me that in the beginning I can take my time with procedures and they will ramp up my speed and patient load little by little. I expect to collect below ~$2150 when I start out and hopefully I can beat it by 6 months just like you (maybe a bit slower than you did since I do not have a GPR). I would not even complain they work me too hard, maybe I can treat it like a paid 6-month GPR and leave right when I start beating the minimum? The contract makes it very easy to leave, there is no non-compete.

You will not feel that way for long if you are working hard and beating that “minimum” consistently and by a decent margin. Why not have both options?

 

[TucsonDDS]

We generally start our new grad docs at 28%, experienced at 30 and specialists generally at 35% of collections which is just a more accurate way then saying adjusted production. This will vary a little on geographic location. The vast majority of doctors will also have a guarantee yearly salary for the length of their first contract which is generally 2 years. This guarantee varies depending on circumstances. Most docs generally are making more than their guarantee after 6 or 7 months as they get into the swing of things and build up their speed. You have to really read your contract though, we have had quite a few doctors come to us after working for other offices who owed mid 5 figures to get out of their current position at the end of their contract when they failed to produce.

Smart doctors will negotiate their percentage and not worry about the minimum, this is of course assuming that there are plenty of patients.

 

[LaughingGas]

All great points. If an office cannot provide daily minimum indefinitely, that is concerning to me. That just means that they are not confident to have enough patients for you. Of course, you have to build patient pool but usually if they have patients waiting for treatments 4 or more weeks out, that shouldn't be an issue.

 

[TucsonDDS]

All great points. If an office cannot provide daily minimum indefinitely, that is concerning to me. That just means that they are not confident to have enough patients for you. Of course, you have to build patient pool but usually if they have patients waiting for treatments 4 or more weeks out, that shouldn't be an issue.

I would be concerned if an office couldn't provide it indefinitely but couldn't and choose not to are two different things. Most new providers simply aren't capable of producing 3k a day of quality production. We use minimums during the first contract so they don't have to worry about being rushed and can concentrate on quality. While at UCR fees this isn't all that difficult it is quite a bit of dentistry depending on the plans some offices take. We have some doctors that are 50-60k upside down in their contracts after a couple of years and effectively they are getting paid in the 45-50% range. Surprisingly once they are off of their daily minimum when it comes time for their contract renewal they are producing significantly more. With all of the training, mentoring and not pushing production I would guess all of our straight out of school providers are actually getting an effective rate of 40% as we plan on losing money for the first contract. At least as far as the contract goes. However we find that we simply get better doctors doing it this way and our average tenure of doctor is close to 7 years. The problem is the docs that end up going back to residency but then again some come back afterwards even better.

The best advise I can give to a new provider looking for a job is to talk to the staff and any other associates that may be at the office. There can be a lot of promises that really never seem to come to fruition. Also look at what the tenure is of the assistants and other associates are. Some larger DSOs it is less than a year, some significantly less. That says a lot about more about the quality of the practice you are joining then the percentage they are promising you.

 

[LaughingGas]

I would be concerned if an office couldn't provide it indefinitely but couldn't and choose not to are two different things. Most new providers simply aren't capable of producing 3k a day of quality production. We use minimums during the first contract so they don't have to worry about being rushed and can concentrate on quality. While at UCR fees this isn't all that difficult it is quite a bit of dentistry depending on the plans some offices take. We have some doctors that are 50-60k upside down in their contracts after a couple of years and effectively they are getting paid in the 45-50% range. Surprisingly once they are off of their daily minimum when it comes time for their contract renewal they are producing significantly more. With all of the training, mentoring and not pushing production I would guess all of our straight out of school providers are actually getting an effective rate of 40% as we plan on losing money for the first contract. At least as far as the contract goes. However we find that we simply get better doctors doing it this way and our average tenure of doctor is close to 7 years. The problem is the docs that end up going back to residency but then again some come back afterwards even better.

The best advise I can give to a new provider looking for a job is to talk to the staff and any other associates that may be at the office. There can be a lot of promises that really never seem to come to fruition. Also look at what the tenure is of the assistants and other associates are. Some larger DSOs it is less than a year, some significantly less. That says a lot about more about the quality of the practice you are joining then the percentage they are promising you.

All good points and fair. I am associate myself and I am well beyond the average daily rate. What stated works in your office and that is great. Obviously you have no problem providing the schedule as long as the associate follows your guidance/mentorship after x amount of time. Unfortunately many owners provide false promises and they don't have the potential patient pool to pass minimum daily rate.

 

[TucsonDDS]

All good points and fair. I am associate myself and I am well beyond the average daily rate. What stated works in your office and that is great. Obviously you have no problem providing the schedule as long as the associate follows your guidance/mentorship after x amount of time. Unfortunately many owners provide false promises and they don't have the potential patient pool to pass minimum daily rate.

Very true, hence the best advice I can give is talk to the staff and the other associates. You are 100% correct in that there are a lot of promises out there and not all of them are given in good faith. Definitely do your due diligence and read the contract. A lot of new docs definitely get screwed pretty badly.

 

[frozenicecreamDMD]

if that is the case, promise a daily min like 600$ which at 30% adjusted production, the provider only need to produce 2000$. if the office has no patient issue, it is no problem to gross 2k$ a day. 10 recalls with hygiene are like 800-900$ on the low end and 2-3 tx appointments will be 1100$.

the office can choose to provide base salary indefinitely but once the provider cannot perform, the provider can be terminated. if you provide one year guarantee salary and the provider realize their strength is the problem not the patient pool, then they can stay on production and make less than guarantee or they can make way more. After a year, the patient base is more familiar with the provider's face so it should be good.

many offices have crazy turnover with associates have following problems

1. no patient pool, patient pool suck, assistants and staffs are unorganized.
2. 3 month guarantee but during three months, the associate realize they don't have enough patient to break even the minimum and spend most of the time on dental town or SDN
3. owners who do not care. and think the new grad associates they hire will bring the office up to produce 1M and rain money in their pocket for them. The truth is far from that. associates do not care either. they rather jump ship

my first 2 months short associate gig have all three problems mentioned above. still have PTSD From it.

 

[Demilaax]

it's more on the lower end