Episode : #928: Maintaining Patient Trust After A Senior Partner Leaves

Podcast Description

Dr. Brian Harris is back once more, this time talking about how he continued the practice after his father left. He touches on financial considerations (like selling to a DSO), growing pains being part of a first-of-its-kind DSO, and more.

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Transcript:

The Dental A Team (00:00.214)

Hello, Dental A Team listeners. This is Kiera and I am so pumped that you are back for day two with me and Brian Harris. We talked yesterday about partnerships and the different pieces about it. And now today we’re actually going to talk about how to have a successful practice after the buy-in, which I think is so important and is not talked about. So get ready and as always, thanks for listening. I’ll catch you next time on the Dental A Team podcast. And one other thing I want to talk about really quick is after you buy in. Yeah, let’s talk about that.

Well, I just, you know, come like 2014, 15, 16, like, I don’t have to practice for long time. And then I start getting to that point where, you know, you’re like, I just want to, I want to have full control, you know, and you start thinking like, man, it’ll be nice when this is just all mine, you know, and I will tell you, that’s the one thing that I did not appreciate that senior doctor that’s been there for so long.

They’re the ones that have all the trust with the patients. They’re the ones that they’re the they’re they’re your most predictable producer that you’re ever going to find is a doctor. Like you want them as your partner for as long as possible. And when they’re ready to be bought out, you want them to stay on and continue to work for you as long as possible. There’s that selfish side of all of us that I think we’re like, I just want to call this all mine. I just want it to be mine so I can make all the decisions. But

it’s really, really hard to replace a family member, especially if it’s like your father that you’re working with. It’s going to be really hard to replace them from a production standpoint with an associate doctor, but also the stress of having to worry about somebody else’s work and are they doing a good job? Are they being fair? When you have someone that you trust, especially when it’s family, you don’t ever have to worry about that. You don’t ever have to worry about them pissing patients off or saying the wrong thing to staff or, know, it’s like,

I think that’s totally undervalued that there’s so much value in having, you know, a long trip partner continue as a partner in the practice and continue as an associate after. Yeah, no, that’s brilliant. And also just thinking, as you were saying it, I don’t think that we value the wisdom and the mentorship of that senior partner. You can’t put a price tag on it and you can’t even realize, but I guarantee you.

The Dental A Team (02:20.683)

Your dad taught you a lot about how to run a practice from a successful standpoint. He’d gone through a lot of things. Like you said, like trusted with the patients. That’s what’s built a lot of this foundation for you that I think like, yes, agree. I think it’s good that we have egos to a point because they drive us. But at the same time, realizing how much you can learn from that doctor, that senior partner before they leave you.

Now, of course, there’s some senior partners that aren’t as great. understand that, so, depending upon your partnership. But if you have a good business partner, if they’re good with the business, if they’re good with production, if they’re great with patients, if they’ve built something of a legacy, if they want to leave a legacy, I think those partners are just invaluable. And so kudos, thank you for bringing that up because, yeah, I think it is easy to wanna like move on. Like, I wanna take this on, but gosh, there’s a…

There is a lot of wisdom in that. And also for, I’m sure for your dad and for those senior partners to have a place that they also trust, like to pass it to you and to see it flourish and to be able to continue to work and do their passion for as long as they want, I think is also a gift you can give that senior partner for building a practice that you were able to buy to grow, flourish, just allowing them to finish out their career in a way that they want to, I think is also pretty incredible. Yeah, I agree. How do you navigate the DSO world now?

I’m just gonna like dive into like all the like, juices, like, what do do? Because like, you can hold it for a legacy. How do you navigate legacy dental practices versus selling to a DSO that’s paying top dollar right now? I just want to ask all the questions, Brian. I’m here for you. Do you know my story, right? Yeah, tell our listeners. Yeah. So I mean, I think it’s, I think it’s absolutely a conversation needs to be had. One of the things I didn’t recognize

And I don’t even think Scott and I recognized it when we bought my dad out is, you know, we went and paid him what the practice is worth. And then we were like, wait, you know, we have a eight and a half, $9 million practice. Now, who’s going to buy into this? Yeah. Who’s going to be the other third partner that’s going to come in and, you know, and pay, you know, $3 million to buy in just a fraction of ownership and a practice. and so we, kind of got ourselves to this place where we’re like,

The Dental A Team (04:37.333)

we’re kind of stuck, you know, and it’s a great thing. it’s either, okay, good, continue, just continue to do what you’re doing and figure it out 20 years from now when we’re ready to retire. Or, you know, do you take advantage of joining a DSO? Do you take advantage of creating a partnership now and growing with them? And what does that look like? And so, I mean, we turned down

14, 15 different offers. mean, we would get it. We’d get approached all the time and it just never, it never made sense. And ultimately we were approached by a group. did it not make sense? Explain why it didn’t make sense. It didn’t make sense for me because it was like,

The Dental A Team (05:22.253)

I want to say this in the right way. I felt like we had spent a lot of time building like a reputable brand and I felt like it was like selling out. I felt like it was like, you know, it’s like we build like this, this elite brand and it’s all about patient care and, and quality dentistry and all these things. Then it was like, but we’re going to take a big check. And now we’re just part of this other group of bunch of other offices. Sure. And

And so when Gen 4 had approached me, they sat me down and they basically were like, hey, this is what we’ve done in the endo space. This is what we did in the oral surgery space. This is what we did with small doctors in the ortho space. And they’d had this track record of forming groups within the specialty industries that were highly respected specialists in their industry.

And so, you know, they said, hey, we’re looking to do the same thing with cosmetic dentistry and higher end family practices. And when they shared that vision with me and I started to look at it and then I reached out to a handful of my friends that were very, very well known cosmetic dentists, you know, probably 10 years my senior that are that have some of the most well known practices in the world. And and and I said, hey, you know,

What do you guys think? You know, is this something you want to be a part of? And when I saw them start to see that same vision that I had where they recognize like, hey, they’re kind of in this interesting spot too now where what is their exit strategy? so there’s been a ton of us that have joined Gen 4 and it’s been a journey. mean, I would feel totally comfortable saying this out loud if the…

investors and the partners were in the room like, yeah, there’s challenges. There’s challenge anytime you’re growing something new in an industry. You there hasn’t really been a DSO out there to my knowledge that’s that’s been one of trying to do more higher end, higher quality. And I’ve, I’ve worked with a ton of them. And I actually think there are some amazing groups out there that they do excellent dentistry and do very good quality dentistry, you know, but

The Dental A Team (07:46.475)

A lot of them have started from the ground up, one or two offices, to bring together a bunch of seasoned offices. That’s a tougher thing and hadn’t been done at this level. So it’s, yeah, we’ve had our own pains, but at the same time, like, it’s been great. It’s been great to kind of work through that together. I’ve been part of the group two years now and I’m happy. I really enjoy it. You know, they give me total freedom. I haven’t had to change the way that I

practiced industry, you I do everything exactly the same. But you know, there’s some other behind the scenes business stuff, you know, that I’ve had to adapt to. but no, no regrets, no regrets at all. And were they a DSO? And if you can share this great and if not, don’t don’t fill because I know every day is different. were they one where it was like they sold you stock in the business, they took part of it then they keep you on as an associate? Is that basically kind of because I know that’s most of the structure of DSO is they’ll buy you out.

pay you for it where you’re at, you get stuck in the company typically, and then they continue to pay you as an associate doctor basically of whatever production. Is that how it worked for you with Gen 4? Or were there different nuances or different ways that they did it for you to keep it within what you wanted it to be? Yeah, the two main structures I’ve seen, it’s like they’re coming to buy out half and you stay half partner and then you continue to grow together or they buy you out entirely.

and you roll back in some of that money in stock and then you grow as a company. And I’ve seen both work. Gen four, they came in, they bought us out entirely. And then we rolled back in a percentage of that buyout into stock and the overall company. And I think for me, when I was looking at it, was like, whether they buy out 50 % or they buy out all, like either way, like I’m committed now. I’m not going anywhere. so.

I kind of felt like for me, was like, you know what, I’d rather be bought out. And now it’s essentially, it’s like, I just have ownership in a several hundred dollar, several hundred million dollar company as opposed to just like my own practice. So it’s just kind of a different mindset and different way of looking at it. But yeah, that was the structure. And then I get paid a generous percentage of everything that I do.

The Dental A Team (10:12.971)

You know, it works. That’s awesome. And I think, like you said, I feel like the DSO route is so brilliant for larger practices because like you said, who’s going to come in and buy us at this eight, nine, $10 million practice. And that’s not even on evaluation. That’s just on what we’re producing. And so you tack on the valuation, like who’s really going to be able to come in and also where it’s so specialized or you do things that, like, I remember I had a doctor who was looking to buy a practice and we looked at the production and I’m like, I would strongly advise not buying this practice. said,

70 % of the production is stuff you don’t even do. I was like, so how are you going to make up that production amount that you’re buying when you’re not even a dentist that’s doing that? And so for you guys, you really did get yourself into not a corner, but like you said, it’s either we can sell to someone who can buy us now and continue to grow it, continue to work as long as we are, or our path is we just keep rolling this until we’re ready to retire, which then at that point, probably your valuation’s down, someone’s gonna come buy it because it’s less dollars for you, but you had a long-term.

And what’s great about the DSO route that I do enjoy for practices like you is you have the option to work for pretty much as long as you want. Of course, there are structures that could change, right? Like you were bought by someone else, they could sell to someone, it could change the structure of how it is. So like that is a piece to it. But overall, I think the DSOs currently are playing with, let the dentist keep producing because they love to do what they do. Don’t rock that world. And that tends to be the structure I’m seeing right now. So. And there’s always a trade off. I would tell doctors like,

What you shouldn’t do is feel like, well, everyone else is doing it. I just need to do it too. Like it should, you should be able to look at it on paper and be like, this just, this absolutely makes sense. Like it would be silly not to move forward to this because it just makes sense. The deals that I see that, you know, I’ve, I’ve seen a lot of people, you know, really get upside down and really get in a bind is where they, they just kind of like,

rolling their equity with another group because of this promise of something bigger, or they take a small payout now with this promise of this big thing later and not realizing that’s not a guarantee. And in fact, a lot of these don’t ever get to that point down the road. so it’s just one of those things. You only should do it if you’re cash flowing good and you’re happy and your practice is going good and your team’s happy. Absolutely, there’s no reason to do it. I don’t think, I really don’t think so.

The Dental A Team (12:38.443)

you should only do it if you’re at this position like where we were, it’s like, okay, one of the main partners is retiring. We’re kind of at a point now where this is as high as we’re gonna be able to go with how we’re doing now. And the only next logical step is to do this. Yeah. No, gosh, Brian, talk about a fun podcast. I enjoy when my podcast like tickle the brain and make me think harder and geek about all the things that don’t get talked about. I mean, like you said, we went from.

partnerships to marriage to DSO buyouts and I just I appreciate you Sharing because I think so much of this is not discussed so many doctors feel like they’re navigating it alone So many doctors don’t know how to do a partnership somebody don’t know The feelings that you shared today are normal and they’re real and everyone feels them So talk about them and here’s ways that you have had success So thanks for like I said last time we talked about smile virtual, which honestly you guys go check out smile virtual. I think it’s incredible telehealth

Like it’s amazing, Brian, I recommend you guys all the time for it. So definitely check out Smile Virtual for it. But Brian, thanks for, thanks for navigating all the pieces. Any last wrap ups you’ve got things, how can people connect with you? Last thoughts today as we wrap up, truly just enjoyed this really, I don’t know, like I said, I love the soul filling conversations and that’s what I feel like we had today. So thank you. No, you’re welcome. And I feel the same way. And I think that’s just so great about getting on here with you is

is that, you know, ultimately this is it’s not for me. It’s not for you. It’s for those listening that have been listening to you for long time and trust what you’re teaching. It’s it’s for those because there there are a lot of people that that do feel stuck from time to time. And I think these are the things that don’t ever get talked about. And, you know, I’ll come back. We’ll do the case acceptance one. I think that’s super important. But I think I think this is probably the right message for today. And I think the only thing that I would leave

the listeners with is just that like, like you have the ability to pivot. You have the ability today to like stop making decisions. Just decide it. Decide how you want to practice. Decide how you want things to look moving forward. And you also have the ability to go and partner with a coach, you know, and Kiera and her team do such an amazing job of like, of guiding doctors along that path and show them exactly how to do it. Like,

The Dental A Team (15:03.821)

follow somebody that’s done it before or work with somebody that knows how to do it and just go and do it. And I think that’s the one thing I’ve learned over the years is I’ve never once looked back and been like, man, I’m really glad I waited so long to finally make the decision to invest in myself. There’s always regret of like I should have done it sooner. So just take that leap of faith. Thank you. Well, and that’s a huge compliment. I appreciate you so much.

And really that’s what we’re here for is to guide them. I think it’s hard to like, we have so much passion like you and I do to not want to share it with other people, to not want to give our guidance to people, to not want to, to help you navigate through these things from people who’ve been there, done that and done it successfully. So Brian, thank you for being someone today to share that successful guidance. And if people want to connect with you, how’s the best way to chat, like I said, smile virtual, clean products, I think is like the coolest thing.

like your online courses, different pieces, how do people connect with you, Brian? Yeah, probably the best thing is probably just DrBrianHarris.com. So from that site, you can gain access to my social media, you can message me directly. But yeah, just http://www.DrBrianHarris.com or at Dr. Brian Harris on Instagram. But yeah, those are the easiest ways to find me and reach out anytime.

I’m happy to share with anybody that is stuck or is needing anything. I love it. Thank you. And for all of you listening, thank you for listening and we’ll catch you next time on the Dental A Team Podcast.