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    The importance of dental compensation studies

    Compensation studies can be crucial for the success of a dental practice.

    There is a list of examples that will be addressed to explain the importance of compensation studies for the dental practice. Just like the importance of a written agreement when two or more partners exist in a dental practice to detail the role of each partner, among other things, compensation can become a disagreeable topic when the focus is after a dental practice is in full operating mode.

    Getting partners to agree after the fact can become such a stressful topic that it becomes litigious. This is not a good situation and will cost the partners and the dental practice itself a considerable expense for attorneys and experts as well as lost production and confusion within the office staff. Getting the compensation study in advance of the opening of the dental practice, is just as important as the above mentioned operating agreement explaining the responsibilities of each of the dentists who are owners in the practice. That study should lead to the creation of the employment agreement that would assist in resolving any issues arising in the future from compensation and agreed upon perks for the owners of the dental practice.

    More from Bruce Bryen: How to navigate dental practice transitions

    The employment agreement and its supporting background data

    The preparation of an employment agreement by a non-dental attorney may be worse than having no agreement at all. The responsibilities, compensation and fringe benefit package for a dental employment agreement is rarely similar to that of any other type of business. An example of why is because the dental practice is a service business that is entirely hands on, compared to other types of businesses where there may be interchangeable parts, inventory and personnel. Patients are typically interested in seeing the same professional each time a visit occurs to the dental practice and may become comfortable with that dentist and the same hygienist.

    Having patient appointments with different dentists and hygienists, as the large consolidating dental practices often insist upon, requires them to do away with the direct contact with the professionals and lessens the goodwill factor of that type of dental practice. Those types of practices have different types of employment agreements with lesser compensation to the dentist and more of a “cookie cutter,” less-favorable employee fringe benefit package for the senior people as well. The dentist with his or her own dental practice and one or two partners or more, should earn substantially additional amounts on an annual basis once the practice has established itself compared to the dentist working for the consolidator who has sold his or her practice to the large company with many practices.  


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    Bruce Bryen, CPA, CVA
    Bruce Bryen is a certified public accountant with over 40 years of experience and is a part of RKG Tax & Business Services LLP, an ...


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