Education from the School of Hard Knocks
by Dr. Dale F. Spadafora
Starting a practice right out of dental school can become quite an extensive venture. As a fourth-year dental student, your only concern is to get out and start practicing. Having been burdened by debt, many dental students may opt to buy an older, existing practice and start practicing solo. These practices have some merit and some downfalls. They are usually priced low and offer a great opportunity for expansion. The recent graduate can then slowly build the practice with working capital. Unfortunately, the practice is probably antiquated. Equipment dates back to the days of the covered wagon, and the materials have expiration dates older than your father. You know you need to update this office while getting by on a limited budget. Frivolous spending can send you into financial ruin; however, being a "tight wad" cannot only be counterproductive, it can lead to more problems than one can imagine. So you try to play it safe. You decide to upgrade a little at a time. This is what most dentists do. However, if you take this approach, there are some things you need to know.
In 1992 I bought an existing practice of very little value. You've probably heard of the type, SS White "Robots," X-ray dip tanks, and an electric burner and spaghetti pot to "sterilize" the instruments. Total value of materials and equipment? Well, let's just say that could not have been much more than a dozen hand pieces. When it was time to insure the office, the premium was low. And every year thereafter, the premium was still low. In the meantime the practice was upgraded beyond leaps and bounds. We purchased new dental units, chairs, hand pieces and yes, a real Statim 2000 autoclave. The office was modernized, state of the art, and the practice was rapidly growing. Heck, five years into practice and I was even ready to drop insurance and go fee for service. I was looking for a new location with more square footage. And then the unthinkable happened.
In April of 1998, I received a call that the building housing our practice was on fire. It went down quickly, and although no one was hurt, my dreams went up in flames. After receiving condolences from friends and loved ones, the first question was " you have insurance, right?" Of course I had insurance, but now it really hit me: I never reported any upgrades in equipment and supplies to my insurance carrier. It hurt enough to have to start all over again, but to not have hardly any capital to do so was exasperating. Fortunately, with the help of my staff, friends and family, we made it through. Eventually we found a new location and built the office of our dreams. Patient flow continued. I continued on my quest in continuing education, earning a Fellowship in the AGD in 1998 and a Mastership in 2002. I even dropped all insurance participation in 2000 and went fee for service. My biggest education was received from the school of hard knocks. If I had had the appropriate insurance coverage, my transition could have been much easier.
A good lesson to all recent graduates is to keep your premiums current. Meet with your insurance representative once a year. Videotape the office and its equipment and supplies. Invest in a fire and security system. Another good idea is to have a water-shut off switch that you turn off when leaving the office. Finally, have an electrician and the local fire marshal inspect your office. They can point out things that are not readily apparent.
These are just some helpful hints to remember as you embark on your journey. Remember these unfortunate incidences can happen to any one. Let's hope they never happen to you.