"I hear that you can lose 20% or more of the patients after a practice sale. What are the facts?"
We ask two experts the same question to give you two different answers on a complex issue
QUESTION: "I hear that you can lose 20% or more of the patients after a practice sale. What are the facts?"
By Gary Schaub
I don't know where this myth of 20% or more patient loss after a practice sale comes from. My maximum patient loss after a general dentistry practice sale is less than 2% of the active patients. I presented this data at an ADA meeting Table Clinic. It came from a survey of my practice buyers who tracked patient loss the first six months of their transition. The bottom line is that patient transfer in practice transitions is highly successful for buyers.
How is this accomplished? Based on my experience with more than 400 transitions, I have developed a practice transition checklist to assure a successful transition. The main elements of the checklist concerning patient transfer are as follows:
- Strive for a seamless transition. The patient should see no changes in the practice, except for the dentist.
- The receptionist, who is the portal of entry for patients, is the key person. Encourage a positive attitude with the patients on the part of the receptionist and all other staff members.
- Make sure you have a well-written letter of introduction from the seller. A positive and sincere letter reduces patient apprehension. It should emphasize staff continuity and that the buyer is God's gift to dentistry.
If the above checklist is followed, it is not necessary for the seller to remain with the practice in order to transfer patients. My average seller/buyer transition time is less than one week. Of course, a longer transition time is usually needed for specialty practices in order to convert the referral network.
Remember, facts dispel myths.
Gary Schaub is the founder of HELP Appraisals & Sales Inc., a dental and medical appraisal and brokerage firm in Portland, Ore. He is a member of American Dental Sales and can be reached at (503) 223-4357 or (855) 463-0101.
By Tom Snyder, DMD, MBA
There really are no scientific studies to confirm actual percentages of lost patients. However, there are several factors that can increase the probability of patient loss if the transfer is not made properly. First, if you purchase a PPO-based practice and elect to convert it to a fee-for-service practice, you probably will lose a significant number of patients. Patient loyalty, in many instances, is to the insurance plan, not the doctor!
Secondly, if you purchase a practice from a retiring practitioner, especially if the practice is situated in a smaller community, you may be dealing with a multigenerational practice. This means that children or grandchildren of the seller's original patients may have been traveling some distance for many years to be treated by the dentist who has been caring for them since childhood! So after the dentist's retirement, some patients may elect to find a dentist closer to home. In this instance, you should consider reviewing a zip code analysis report for that practice to determine if this potential attrition may be a problem.
A third factor that may create a patient retention problem is in the case where the buyer has never worked in the practice prior to the sale, and the seller immediately retires accompanied by several key staff members. This could lead to a problem, as patients are not familiar with the new doctor or the new staff. So try not to replace key staff members at the outset, as they may be your best allies in good patient retention.
In summary, it is important to consider all factors that may potentially lead to patient loss and address them prior to purchasing the practice.
Tom Snyder, DMD, MBA, is the director of transition services for the Snyder Group, a division of Henry Schein Professional Practice Transitions. He can be reached at (800) 988-5674 or Tom.Snyder@henryschein.com .
Past DE Issues