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Howard Farran:
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It's just a huge honor today to be podcast interviewing Stuart Oberman of the Oberman Law Firm, outside of Atlanta, Georgia, in Loganville, Georgia. Stuart J. Oberman is the founder and president of Oberman Law Firm. Mr. Oberman graduated from Urbana University and received his law degree from John Marshall Law School. Mr. Oberman has been practicing law for over 24 years and before going into private practice, he was in-house counsel for a Fortune 500 company.
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Mr. Oberman represents dental clients through the United States in a wide range of areas including mergers and acquisitions, partnership agreement, commercial real estate, entity formation, employment law, commercial leasing, intellectual property, and HIPPA OSHA Compliance. Mr. Oberman is a frequent lecturer and has published articles in the US and Canada. In addition, he recently received for a third year in a row, the Martindale-Hubbell Client Distinction Award, which is based on client review ratings in the categories of communications, ability, responsiveness, and quality of service. Less than 1% of the 900,000 attorneys listed on martindale.com and lawyers.com have been accorded this honor of distinction. Congratulations.
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Stuart Oberman:
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Thank you, sir. Thank you.
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Howard Farran:
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So, who does society like less, dentists or lawyers?
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Stuart Oberman:
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Well, dentists are ranked the number one industry to be in now, so I'd have to say lawyers.
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Howard Farran:
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We just had 6,000 kids graduate from dental school this week, and they left dental school, and they're about to go into the future, and those young kids eat these podcasts up more than old guys like us. They probably didn't have one dental law course in dental school, or did they?
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Stuart Oberman:
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I doubt it. They may have one course, that's about it. That's why, frankly, I love lecturing at dental schools, because these guys coming out have no idea how to run a business, and they get themselves into more trouble than you could ever imagine.
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Howard Farran:
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Well, you're talking to a lot of them right now. Tell them the latest legal trends and updates in the dental industry and what they didn't learn about law when they were taking algebra, chemistry, and biology, and physics.
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Stuart Oberman:
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You've got some hot areas right now. You've got employee embezzlement, huge area, huge, and it's such a problem in the dental industry. When I talk about the top 10 mistakes that dentists make ...
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Howard Farran:
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I love that. That sounds like a great article. You should write that article for Dentaltown Magazine.
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Stuart Oberman:
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I'd love to.
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Howard Farran:
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It's always the number 10. They even have the Ten Commandments, even though there's not 10 commandments. Really, if you look at the Ten Commandments, thou shalt not steal, thou shalt not covet thy neighbor's goods, that's a duplicate; don't commit adultery, don't covet the neighbor's wife, another duplicate. It's actually six, but Top 10 ... Let's do the top 10. You got it in front of you?
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Stuart Oberman:
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Yeah, I've probably got it memorized, too, yeah. I'll tell you number one. These guys do not recognize problem patients. Literally, they will know problem patients as soon as they walk in the door; the staff has already told them, the hygienist has already told them, the chair-siders have already told them, the front desk has already told them. By the time they get to the chair, you've already had five people that have told you, you've got a problem patient, and yet, what happens is these guys get in the chair, they don't listen; they're worried about production revenue, and these guys constantly treat problem patients when all they've got to do is say, "I'm sorry. Whatever your problem is, is not within my area of expertise, and I don't do it." As soon as they put their hands in the mouth, they're done. And then you get the board complaints and everything else that goes along with it. That's probably the number one problem.
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Howard Farran:
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So what are red flags on a problem patient? Are they any things like are they more likely to be women than men? Older or younger?
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Stuart Oberman:
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It's all the same. The first thing is, my previous dentist did this, or my previous dentist did that, I wasn't happy with my previous dentist, or they're rude to the staff walking down the hall, or they're rude to the staff when they call on the phone, or they're very squeamish when you touch them. They're complaining about everything under the sun before you get to the chair. Those are the red flags, and usually you can get a sense, or anyone can get a sense when you're in a chair if there's a problem or not just by the demeanor; what they act like, what they talk like, who they talk about, the problems they've had with other dentists. As soon as you hear, my previous dentist did a lousy job, see it out the door. You don't need them.
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Then you've got another problem, the second biggest problem is sending patients to collections. I mean, I would say a substantial amount of the board complaints that we get are problem patients that we have all stem from collections. As soon as you send this patient to collections, it goes on their credit report, you get these collection agencies that give these people a hard time, and it becomes a problem. All of a sudden you get a collection claim, and then next thing you know, the patient's not happy, they're going online, they're complaining about you. All you've got to do is go online, most dental boards will file a complaint without even leaving your house. Matter of fact, you can even file a complaint before you even leave the car half the time. So collections is a huge, huge problem as far as what we can tell.
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Howard Farran:
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You know what I do with collections? I agree. My practice is 30 years old, so I don't want to turn-
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Stuart Oberman:
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You're a young guy then.
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Howard Farran:
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I'm 54. You're going to have some guy three blocks from your office go into collections and all this stuff like that. So you know what I do? I always wait with the most emotional time of the year in this country is Christmas and so at Christmas, I get the Christmas cards, I Xerox their balance, and I write them a note that says, "Hey, we had a really great year, you obviously didn't have a great year, I'm so sorry, and I just want to say in the spirit of Christmas, we would just off your balance, and all we ask in return is that you may refer a friend or a loved one." They come in, they cry, they bring cakes, they bring pies, because what's the alternative? To piss somebody off big time who's going to live next to your office for the rest of your life?
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Stuart Oberman:
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Right. You send a patient like that to collections and they're just having a bad day, they're having a bad year. You may not even be the problem, but they take it out on you and next thing you know, you've got problems with Yelp and Dr. Oogle and all the things. Like you said, you've got bad publicity, you got board complaints and you got all kind of problems; for 500 bucks, you don't need it. We have clients, literally, that they're a full million dollars of revenue, and they'll send somebody to collections for $100, I don't really understand that, but that's what pays my rent. I don't really understand why they do that, it is beyond my comprehension to why they do that.
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Howard Farran:
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Yeah, and they've been on TV where judges are throwing people in jail for 90 days because they didn't have the $50 to pay their court fee or something like that. It's like, are you kidding? This guy can't come up with $50, so your best idea is to put him in a cage for 90 days?
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Stuart Oberman:
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A lot of times, you don't really know how many people actually that guy is associated with that comes to your office. He may be a teacher at a school. You make him mad, and next thing you know, his circle is 50 people. And then you got- [crosstalk 00:07:45]
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Howard Farran:
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When people go into collections, don't you think it's because they didn't have a proactive collection policy? I mean, pay-to-play? Doing it beforehand. You knew what the insurance is going to pay, you knew what this person's portion was. You go into McDonald's, you order a hamburger, the little girl says two bucks, you give her two bucks, and she gives you the hamburger. She doesn't give you the hamburger, and you go home and eat it, and then she starts billing you for money.
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Stuart Oberman:
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A lot of it is poor staff, poor communications, poor turnover. Some of our offices, unfortunately, are like a transit station, they've got employees coming in and out, and they don't keep track of it. They're busy, they're churning, they're burning. Frankly, collections are an afterthought until something happens. When you're making two to three million a year in some of these practices, a $40 or $50,000 AR account is not that bad, so they just lose track of it, and then when slow times hit and they start collecting aggressively, that's when the problems develop. My rule of thumb is just don't do it. Literally, probably about 80% of all board complaints at some point stem from collections at some point.
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Howard Farran:
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So you just have a blanket policy that you don't turn people over to collections, period, end of story?
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Stuart Oberman:
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I think so. That's what I recommend to our clients.
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Howard Farran:
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Okay.
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Stuart Oberman:
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I just wouldn't do it.
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Howard Farran:
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One was don't treat crazy people. Two was don't turn people over to collections. What's three?
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Stuart Oberman:
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Your staff. Our doctors do a horrible job communicating with their staff. They don't understand what the staff is supposed to do, they're not accurate, they're not consistent, they don't document what the staff is supposed to do, and the rule of thumb is you got to document your charts. We've got doctors that expect staff to do certain things, and they don't do it, or they tell the staff to do certain things, they don't do it, it's not documented in the charts. Next thing you know, you get to the board complaints, and then they don't understand what's in their charts, they don't look at the charts and they have no idea what the staff is putting in charts. So, they don't advise the staff what's expected, how it's expected to be, or what's scheduled to take place, they just churn and- [crosstalk 00:10:01].
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Howard Farran:
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So you're saying that these dentists are having their staff write all the patient charts?
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Stuart Oberman:
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A lot, yeah.
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Howard Farran:
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Is that what you're talking about? Or are you talking about the staff's own personal HR chart?
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Stuart Oberman:
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We have a lot of our doctors will go ahead and have the staff writing chart notes and then they don't review them, and then when something happens, they realize that the staff made a mistake, they put in an improper entry, and they don't review them. That's a huge problem. There's nothing like getting to a board complaint and all of a sudden, you've got your doctor next to you who doesn't understand what a staff member put in his chart, that's bad news.
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Howard Farran:
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What percent of the time when you see a board complaint, is it, on say a crown a number three, where the entire chart entry is crown on number three? I mean really, what percent of the time?
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Stuart Oberman:
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It depends, but they're not accurate. A lot of the times, mistakes are made, you've got the wrong tooth. Our guys don't review the charts before these board complaints, which is deadly.
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Howard Farran:
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What's your advice there? To have the dentists enter the notes? The dentists should review them before ... ?
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Stuart Oberman:
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I think at the end of the day or that week, or whatever, I think the dentist has got to review those charts. I think if you're just letting your staff put chart notes in there and you don't understand what they're reviewing or what they're putting in there, it's deadly. That's a recipe for disaster, especially when those charts go to another doctor and you're not even reviewing what goes in those notes and you've got your notes going pull to other doctors without reviewing it, that's a recipe for trouble.
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Howard Farran:
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But you know, a lot of people ... It's human nature, you don't think about fire insurance on your house, because you know it's never going to burn down. You don't think about car insurance, you know you're not going to wreck your car. And you don't really care about your malpractice, because you know you're not going to go up before of the board. What's the chance the graduating class of 2017 will go to the board at least once or get sued in their lifetime?
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Stuart Oberman:
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I think it's pretty good. My view is, it's not going to be if you're ever going to get a board complaint or sued, it's when. In today's world, I think more complaints are being filed more so than ever; it's easier, there's more expectations. I think there's a lot of sloppy dentistry out there. I think it's pretty good, at some point in your career in today's world, you're going to get a complaint and it's just how you deal with it.
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Howard Farran:
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Is there any more procedures more likely to be sued than not? When you talk about don't work on crazy people, that's true. Is it more likely to be like root canals or implants or braces or children or anything like that?
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Stuart Oberman:
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Statistically, Endo has the highest. Endo procedures have the highest from what I've been able to determine. A lot of it has to do with improper damming, instruments being broken, can't find canals, B2 canals, those kind of things. It's tough.
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Howard Farran:
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Good Housekeeping just had an article I saw somebody posted on Dentaltown where the assistant handed the dentist an instrument and it dropped and hit the cornea of her eye, and then it got infected. Long story short, five surgeries later, she ended up losing her eye. Of course, the whole legal deal was all patients are supposed to wear protective eyewear, and they didn't do it, and then they dropped an instrument in her eye. Can you imagine having a patient lose their eye?
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Stuart Oberman:
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Yeah, that's hard. I would say, lack of dam is probably the biggest issue in Endo procedures that we've been able to determine in our review.
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Howard Farran:
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The insurance stated, I saw a really big insurance data deal where it showed that when Endodontists do a molar root canal in five years, 5% have been extracted and when general dentists do them in five years, 10% have been extracted. Whenever you're doing a root canal, you know in five years, there's a five to 10% chance that's going to be extracted and that might not bother grandpa but it might bother some people.
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Stuart Oberman:
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Right. Statistically ... I'd like to review that, that's interesting. Endo is probably the, I think ... the last speech I gave was at the Endodontist Association, and Endo seems to have the highest problem rate, statistically. I don't know, that's interesting. That's interesting stuff, interesting stuff.
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Howard Farran:
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Back to the staff, you flippantly said something where you said, you go and these people, and the staff, is like a train station, they're coming and going. What do you think causes so much staff turnover?
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Stuart Oberman:
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I think as a whole, dentists are being managers. I think they care so much about the patients, I think they care so much clinically, but I don't think they get the experience or running a practice. I think it's bad choices, I don't think they do the research on staff either. They don't do background checks, they don't figure out that that particular staff member has been employed six times in the last two years and and three of them are because of embezzlement. I think it's bad hiring, I think it's bad practices, it's bad background checks. I don't think they screen them, I think they leave it to their office managers instead of meeting with them directly, so I think it's just bad hiring practices can be the biggest problem.
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Howard Farran:
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You recommended a credit score too?
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Stuart Oberman:
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I recommended credit check, period. I recommend credit check, drug screens. Statistically I think depending on which you're looking at, they say probably 60-70% of all resumes are fraudulent. I know for a fact that our clients don't research or call previous employers, never.
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Howard Farran:
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It's funny, I read in the Dentaltown the other day where some lady embezzled like $100,000 from her dental office [inaudible 00:16:10], and they finally caught it. She did it at her last job, which was a dental office too in a different state. All they had to do is call her last job and say, yeah, she stole 100,000 bucks.
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Stuart Oberman:
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I don't know why the don't check.
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Howard Farran:
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I think the credit check is real important because if a bank won't loan you money, then how stable is that person. This is America, it's not a problem about getting a loan, the problem is paying it back. You need long-term staff, and they're hiring people whose longest held job was two years.
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Stuart Oberman:
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Yeah. If you have somebody that's got a 400 or 500 credit score, there's a problem somewhere. Especially, if you don't have checks and balances on your accounting system, it's a recipe for disaster, and then the doctors wonder why, you know what? It's a bad hire. It was a bad hire but you have to have checks and balances. You need to look internally, what's going on there.
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Howard Farran:
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What percent of dental offices do you think will be embezzled from in their lifetime?
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Stuart Oberman:
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At least 40, I think it's 50 to 60. The average embezzlement is $105,000.
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Howard Farran:
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Wow.
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Stuart Oberman:
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That's the one that's reported. Those are the ones reported.
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Howard Farran:
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Yeah, wow. When you talk to dental office consultants, they say when a dentist says ... When they go in and do dental consulting, half the time they go in the office they find embezzlement. Half the time.
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Stuart Oberman:
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Okay. That doesn't surprise me at all. There's signs. There's signs about how this has taken place, what's taken place. But what happens is, guys are drilling and filling, they're moving to different operatories. They're like the Energizer, eyes are pointed, they're going around and around, and they don't see the signs, when every day there's signs, that they just don't look for them. They just don't-
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Howard Farran:
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So are you thinking about that song, I Saw the Sign?
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Stuart Oberman:
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Yeah.
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Howard Farran:
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Remember that song?
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Stuart Oberman:
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Yeah. They're there every day. They're in the office every day and they just ignore them and all they got to do is come up from the burrow a little bit and they'll see it.
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Howard Farran:
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Yeah, it's Ace of Base. Ace of Base.
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Stuart Oberman:
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Ace of Base?
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Howard Farran:
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I Saw the Sign. What are these signs? Does Ace of Base cover them in her song?
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Stuart Oberman:
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If you requested financial information, and you can't get financial information in a timely manner, there's a reason why you're not getting financial information. THere's one, it's not accurate; two, they're hiding something from you. So, if you can't get that in a timely manner, there's a reason why. I don't mean within a day or so, I mean, like in a week or two. One of the other things is, in today's world, we have a lot of doctors who are selling, a lot of doctors who are buying, and you have a lot of the older staff has been there 20, 30, 40 years and don't want to change. Dr. Smith did it, worth 1.2 million and 1.5 million. Hey, great, why change the system now? What happens is if you got a lot of resistance to change, there's a reason why you got a resistance to change.
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One of the other things we run into is adjustments. It's amazing to me how many doctors do not review adjustments. They don't review patient charts, they don't checks and balances, they don't check the day sheets with the credit cards, with the production that day, and they don't check their adjustments. You got money going out the door, between neighbors, friends, family, and you don't even know it. If you're not checking your adjustments on a monthly basis, or a weekly basis you got a huge problem. One of the other signs is that your collections have slowed. First of all, never take cash. You got to be crazy in today's world to take cash. A lot of doctors take cash, they wonder why they're slow, they don't have checks and balances, they don't have two or three systems with check-off's, that's a recipe for disaster.
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You got an employee who doesn't take vacation. It's not that they love you, they really probably don't even like you, but what happens is when you go on vacation, what happens is, is that all of a sudden you develop problems. You got things are going wrong, you got unexplained matters, and employees who don't take vacation don't want that. They're control freaks, and they don't want that particular vacation schedule because then things go wrong. Honestly, I tell my doctors, "You want to figure out what's going on in your practice ... most of the doctors don't work on Fridays, you answer your phone on Friday, go there from nine to 12, answer your own phone, it's amazing what you're going to find out. You go there on Saturday, go there for a couple of hours every now and then, answer your own phone, it's amazing what you're going to find out and what you don't know."
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Howard Farran:
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Like what? Like what? What are examples?
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Stuart Oberman:
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What examples? Problem with patients, doctors are not being informed they have a problem with patients. They're not being informed with treatment issues. You want to figure out collection problems, that's a great time. Answer your own phone because then a doctor can ... What's going to happen is if you're sending out notices for collection notices and you've got people that are calling, and you're not getting that particular call because your staff is screening your calls, great. Or if their insurance are being billed twice. Huge problem is insurance. A lot of insurance checks are not getting to the doctors, they're going into the staff accounts. There's a whole litany of things that happened with particular insurance checks and crossed balances on EOBs and nobody reconciles that. The staff tried to reconcile but the doctor has no idea what's going on because he's busy drilling and filling. It's a huge problem, it's a huge issue, huge issue. Those are just some of the things that you look for but they're there. They're there all the time. They're definitely there all the time.
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Howard Farran:
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It also really helps, I think social animals are hard-wired not to have uncomfortable conversations with each other, so it's very, very important as it's happening, you sit there and say, by the way, half of the dental offices are reported as being embezzled from. I do not want that happening here and what does a team think how we could do to work on this, how could we break up these tasks? But when you start talking about it, and asking people; they sit there and think, "Oh my God, he's thinking about this, I shouldn't be doing this."
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Stuart Oberman:
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Exactly, have open dialogue, let your staff know that you have a CPA looking at your records, that you're going to spot audits, bring in a chart every now and then to your staff, figure out what's going on, let them know you are involved. It's not going to be a foolproof method but if they know you're involved and they know you're looking at records, and you're checking bank statements, and you're cross referencing, you're reconciling, and you got questions, they're going to know you're in the game. At that point, they're going to be really, really careful what they're doing or they're not going to do it. It's never going to be foolproof. There's nothing to stop it.
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Howard Farran:
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You know what? If you're married, your spouse should do that because, should be involved in that because one third of divorces are over finance. They say it's a third sex, a third money, and a third substance abuse. If your spouse is in there doing some of these adjustments looking at the books, they start to see all the overheads, so when they hear, oh, you do $100,000 a month, the spouse might be thinking, "Oh, let's go buy a boat and a cabin," and when they're in there involved somehow in the finances, they realize there's a lot of overhead in this thing.
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Stuart Oberman:
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Let me tell you, what I say, if you had an embezzlement case, everyone is in plight, including you office manager, and your spouse. I'll never forget the case we had, where our client came to me and said, "Hey, you know what, we can't find $60 or $70,000," I'm like, "What do you mean you can't?" "We don't know where it's at, we can't find it." Come to find out, the partner's wife was doing the books. Well, the partner was having an affair, so what do you think the wife was doing? The wife was nimming the money off the top to build a war chest just for a divorce. That's where the $60,000 went to. When I say everyone's in plight in an embezzlement, everyone's in plight including your partner.
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Howard Farran:
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Yeah. I know Dennis's wife was embezzling $7,000 a month and sending it to Sydney when she realized the marriage was over, but she said stayed on for five or six years, and it was all in a different country. And then, I also have heard of many cases where there's blackmail or the dentist is sleeping with his staff and then that person is embezzling because she knows if she got caught, she knows she could just tell the doc, "Well, what's cheaper, a divorce when I tell your wife, or I'll just go away?"
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Stuart Oberman:
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It's amazing what happens in dental offices, I'll be honest with you. It's amazing. That is a huge problem, I don't know whether to call it such close quarters, but you know we've-
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Howard Farran:
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I think it's just because dentists are so hot.
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Stuart Oberman:
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There you go.
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Howard Farran:
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We're just so hot. We're hard to resist.
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Stuart Oberman:
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[crosstalk 00:24:44] I'll say it. Smart, intelligent, good-looking guy or girl, I'm with you. I'm with you. I'm with you. But that happens all the time though, happens all the time. That is not uncommon. That is not uncommon at all.
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Howard Farran:
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Yeah. I never could figure that out. You're a guy and there's three and a half billion women on Earth and who do you decide you have to have an affair with? Some girl in your workplace. At what point are you just insane?
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Stuart Oberman:
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It's a recipe for disaster. Then, you document it, you videotape it, and then you're in a whole different world. And [crosstalk 00:25:23].
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Howard Farran:
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Now it's a crime. It's one thing if you have an affair on the other side of town but when you have it an affair with an employee, it can be crime, workplace, talk about that. You can sue your boss, for having an affair.
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Stuart Oberman:
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Now with the federal law the way it is, you've got harassment issues. You engage in that kind of conduct, you got all kind of state and federal potential violations, EEOC issues. You're asking for trouble and if you have an affair with someone in the office. It's a recipe for disaster, because like I said you got all kind of federal and state law issues you got to deal with and it doesn't take long to get into trouble with those guys.
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Howard Farran:
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Are these all like civil fines and penalties and lawsuits or any of them criminal. Like is any of it, loose your dental license, go to jail stuff?
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Stuart Oberman:
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Civil. No, civil. Civil.
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Howard Farran:
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What about the dental license? Do boards ever take away dentist's' license for escapades with the staff?
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Stuart Oberman:
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We've got something they've actually been sanctioned but never have lost a license, thank goodness. But they've been sanctioned. In some cases they have been sanctioned pretty good.
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Howard Farran:
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Again, you got to slow down the staff turnover, you're selling something invisible. When you walk into some place, they say, you need four cavities, or you need your transmission fixed, or when the consumer doesn't understand what you're selling, it's all a game of trust and you can't build trust with a bunch of staff turnover and picking low quality staff. HR is everything whether it's sports team, a hockey team, or a dental office.
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Stuart Oberman:
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Yeah, you're right, and then it gets back to the fourth mistake, you, sort of, chair-side manner and if you don't have a good staff, in today's world people are stressed or have money problems, the worst problems, kids are in jail, you got all kind of problems. If you don't pick the right staff to have a good chair-side manner, if you're herding patients like they're cattle, and you don't have that chair-side manner, and you're a doctor and you don't have that chair-side manner, you are a recipe for disaster from day one because you don't have that bond with that patient. You're in and out, you're not taking your time, your staff's not taking their time. That's a whole culture, your staff has got to have that culture also, and you got to have that culture.
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I'll never forget what a very good friend of mine. She practiced for 30 years, never ever, ever had a complaint, never a malpractice claim. I said, what's the biggest secret? We talk about this all the time, what do I need to tell these young guys? When somebody comes into your office, your chair, first five minutes, "How you doing? What are the kids doing? How's life?" You should have all this written down, "How's the family?" And then you put them at ease, and then you drill them and fill them; but until that time, if you're just going in there, and you're cold and you don't really care about your patients, it's going to show up. It's going to show up, and that's where you get into problems.
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Howard Farran:
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Yeah. So what's number four? You said number one.
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Stuart Oberman:
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Number four is the chair-side manner.
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Howard Farran:
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Chair-side manner.
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Stuart Oberman:
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Then you got an issue regarding ... a lot of our offices, there's no checks and balances, they don't have somebody who's in control of risk management. They don't have somebody checking OSHA, they don't have somebody checking HIPAA, they don't have somebody checking EEOC violations, they don't have somebody dealing with complaints. It's like everyone is in their own separate island and they don't designate a point person. One of the biggest things we get now is OSHA whistleblower issues, OSHA complaints. When you got a problem employee or a problem employer or whatever, they're going to three places. They're going to OSHA, they're going to HIPAA, and the Department of Labor. If you don't have somebody designated to take care of those things, if you don't have somebody designated in your office to have a handle of those problems, you're a ship in the middle of the ocean and you got no engine.
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Howard Farran:
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Okay. You're saying a lot of alphabet soup. There's a lot of kids that just got out of dental school, they don't know the difference between OSHA, HIPAA, the Department of Labor and the NFL. Would you go through that alphabet soup stuff and give an example of an OSHA versus HIPAA versus Department of Labor?
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Stuart Oberman:
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OSHA is in two phases now. OSHA, of course, would think of bloodborne pathogens. OSHA is now an employment business. I believe it's the head of about 13 governmental agencies. What they do now is that if they get a complaint, OSHA gets the complaints. You cannot discipline your staff. A lot of times our doctors will know who filed the OSHA complaint for whatever reason, it's best for the present employee. You got employees who are mad, they're upset for whatever reason and they file OSHA complaints on our doctors. Then you got doctors who want to discipline the employees based upon that complaint. Well now if you discipline them because they filed an OSHA complaint, now you just jumped into a world of OSHA whistleblower statute. If you discipline that employee adversely because they filed an OSHA complaint, you are subject to federal penalties. You've got to potentially hire that employee back, you're going to pay fines, fees, lawyer fees. Sticks, x-rays, those kind of things, they're now in the whistleblower statute and that's a dangerous statue. HIPAA is a whole different world.
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Howard Farran:
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So OSHA is Occupational Safety Health Administration. And then HIPAA is what? Healthcare Initiative Portability Act or ... ?
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Stuart Oberman:
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Portability Act, yes. So, and that deal is in 2013, the world changed when HIPAA ... I'll be honest, a lot of our doctors still have this, they got three pieces of paper and now next thing you know, they're HIPAA compliant, and their older manuals or not up to date, they're back from 1996. HIPAA has to deal with patient privacy and all that goes with it regarding ransomware, cyber security, huge problems now, huge problems. I've been talking about ransomware, for the last three years and all of a sudden now it's become a hot topic because a couple of guys are getting hacked, or whatever. But many of it is a huge problem. And that has to deal with patient privacy protected personal information. There's got to be procedures, a lot of our doctors don't have procedures, they got to have procedures. They got to have rules for protocols for privacy. And if not, the fines pretty stiff. You're talking about a $150,000 per violation so if you've got a breach, $150,000 per violation per patient breach is catastrophic. That is absolutely catastrophic.
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Then you get into employment law. Now, the biggest issue in dental practices is literally overtime. Overtime. When to pay it, how to pay it, what do we do if there's a complaint, how do we deal with it? But that's a huge issue right now in dental practices. And I'll tell you, what's even more interesting is in dental practices, our disgruntled staff is now keeping track of text messages, all overtime if you exceed 40 hours, email, communications, calls after hours. All that's, if it exceeds 40 hours, all that is overtime. That's a huge issue right now.
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Howard Farran:
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Is it different if you're paying them hourly versus salary. I mean, is if you pay salary it's not an issue and hourly it is, or is that not true?
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Stuart Oberman:
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When you get into salary, there's a big distinguishing factor as to what particular members of a dental office are subject to overtime. You can pay a person, you can pay a frontline employee with no management authority whatsoever a salary and they're still subject potentially to the 40-hour rule. Just because you pay an assistant a salary, does not mean that you could work them 80 hours a week. If there is a very strict criteria that they got to have management skills, hiring/firing authority, and if they don't have that, doesn't matter what you pay them, or how you pay them, they're subject to overtime rules. There may be no distinguishing factor when you come to Department of Labor issues. So that's a huge issue right now. There's a whole cottage industry right now if you look at it, lawyers are getting more aggressive on this matter, there's more losses being filed, there's more things are coming after our doctors now than ever before for overtime issues. It's because there's been abuse. One of the areas are of huge concern is working interviews.
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Howard Farran:
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Working interviews.
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Stuart Oberman:
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They're a disaster, those are a huge potential problem. If you've got a working interview and all of a sudden, next thing you know, you got working interview for 30 days, they're employees. They're employees. If you're going to have a working interview, you got to meet very strict criteria, it's got to be for a limited period of time, recommendation is to put these guys under [inaudible 00:34:57] contract agreements, 24-48 hours. Then you got workers comp issues if they're injured on the job, unemployment issues if they're fired because they didn't work out ... Working interviews, you almost can't do them anymore. They've become as-
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Howard Farran:
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A very common question on Dentaltown is dentists say, "Well, I want them to watch this online CE course from Dentaltown, so on the lunch hour, I'm going to go buy everyone a pizza, or hamburgers or sub-sandwiches and they have to sit in the waiting room and watch this hour long course." Or they ask, "We're taking a continued education course on Friday, we don't work Fridays, I don't pay them Fridays, I just want them to go. They should just go because that's the spirit of the office." What would you say to those two things?
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Stuart Oberman:
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That's fact specific but I'm going to give you a lawyer answer, it depends. If it is voluntary, that's a whole different issue regarding mandatory. If you got a 40 hour week and all of a sudden you're requiring your employees to sit there on a Friday to look at your film or you're requiring them to go to a particular event, if you're requiring them to go out of town where they've got no choice, you got to be really careful, that you're looking at potential overtime issues. So, it's fact specific, but if you are requiring them, not voluntary but requiring them, you got to be real careful with that. You got to be real, real careful with that. That's pretty common. That's pretty common.
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Howard Farran:
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What's your general advice on the lunch and learn? A lot of these dentists, they have a staff meeting once a month and they do it during lunch and they say, "Well, I'm feeding you, so I don't have to pay you."
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Stuart Oberman:
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If it's a staff meeting, it's required, it's mandatory, they got to pay them. They got to pay them.
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Howard Farran:
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So then that's what it comes down to, is if it's mandatory you're going to pay them, if it's voluntary you don't.
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Stuart Oberman:
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That's a pretty general rule, but yeah. I'll give you a lawyer answer, but that's a pretty general answer. You got to be aware of that, absolutely.
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Howard Farran:
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What number, we're on ... four was.
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Stuart Oberman:
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We're on six, six, six, six.
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Howard Farran:
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We're on six now or we're coming to six?
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Stuart Oberman:
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We're coming to six, coming to six.
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Howard Farran:
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What's six?
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Stuart Oberman:
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Six, chart notes. I'm going to tell you now, it is beyond my comprehension to what I see in chart notes. I've seen everything in chart, and these are the same things that I speak about at study clubs, these are the same things I'll speak about at dental schools, to groups. You can't put stuff negative in files. I've seen everything that violates race, color, creed, sex, or origin, state and federal law. I've seen everyone cussed out, screamed at in chart notes. What we find is that all a sudden, you can't believe what I've seen in chart notes. I've seen derogatory racial slurs, stuff about the family, the wife, the kids, it's beyond my comprehension. So now-
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Howard Farran:
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They say you're supposed done like nobody's looking and send emails and texts and chart notes like it's being read in a trial.
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Stuart Oberman:
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Here's what we find, is that all of a sudden, you got a chart note that goes to another doctor because, let's say they're not satisfied with your services. So now what are you going to do if you just criticized that particular patient, race, color, creed, sex, or origin issues. All of a sudden, that patient chart ends up on that person's Facebook page, what are you going to do? And all of a sudden, your notes are up there, Dr. Smith, Dr. Farran said this about me in my chart notes. You're dead. You can't take it down, you're not going to get it erased, and you're going to become a social media pariah. You got to be unbelievably careful what you put in charts, there's things that you can put in charts, that you don't have to say it directly but you can insinuate certain things without going through the full Monty. You can't put these things in charts anymore, those days are gone.
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Howard Farran:
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The full Monty, where did that come from? Is that a Monty Python line?
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Stuart Oberman:
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Yeah.
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Howard Farran:
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When you're looking at chart notes, what percent of the dentists still actually do you think have a physical chart versus it's all digital online?
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Stuart Oberman:
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It's interesting, the guys that have been practicing I think five, 10, 15 years are ... I'm going to say it's almost probably 60/40 still on chart notes.
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Howard Farran:
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60 being what?
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Stuart Oberman:
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60/40 probably in chart, 60 digital. There's still a lot of charts.
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Howard Farran:
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60 digital and 40 paper.
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Stuart Oberman:
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I think so, yeah. I think so, yeah. Still a lot of chart notes. A lot of charts.
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Howard Farran:
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It's amazing how some of these technologies in dentistry, like the dental X-ray or the high speed handpiece, everybody got them within a year. And then, some of these other technologies like digital charting, it's been out 25 years and they're still ...
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Stuart Oberman:
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It's expensive and when some guys don't want the conversion, they don't like it. We find the younger guys that have been in practices in five, 10, 15 years are more apt to go digital than the guys who have been practicing 20, 25 years. It's just culture, it'll come about. We see a lot of chart notes and [crosstalk 00:40:39].
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Howard Farran:
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I'm so old. Do you remember when the internet, the PC really started to roll out, remember?
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Stuart Oberman:
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Of course I will say I do.
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Howard Farran:
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What was everybody saying back there, why did they say the PC would never take off? They said it would never take off because number one, men don't type, and they're never going to become typers. I remember a lot of people seriously believed that. My boys' grandpa, that was true. He never embraced the computer because he would just say, "I don't type, grandma types," so grandma's been on the computer nonstop and grandpa said I don't type. It's amazing how the adoption finally came. So what's seven?
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Stuart Oberman:
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One of the biggest things is that doctors don't follow up, they get too busy, they get too rushed. I don't think they take the time when they got a complicated procedure or when they have a patient that needs that little extra TLC, they don't follow up. They don't make sure that your staff is following up, they don't make sure that their prescriptions are where they need to be. I think sometimes our clients get too busy, our doctors get too busy, the staff gets too busy and I don't think they have a very good follow up.
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All it takes a lot of times is that five, 10 minute phone call and say, hey, how you doing, what's going on? You don't have to deal with every patient but you're going to know when that patient has an issue, has a concern, has a problem that you're just going to need that little bit extra care, and you better get on the phone, and you better talk to that patient because what can happen is, is that you may think that patient is doing great and next thing you know, they'll go all over the internet, he never called me, he never followed up.
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With that being said, if your staff is going to call, you need to document that call because a lot of times the patient ... We do a lot of problematic, after the fact cleanup where patients are unhappy and a lot of times we'll get, well, they didn't call, they never called me back, they never really cared about me. And yet, our doctor says, we left a message on this, this, this, this, this day, and they don't follow up. If the patient calls in or your staff calls, document that you called, left a message, and all of a sudden, we go back to the patient and say, hey you know what, Dr. Smith called you 17 times, here's the dates, you didn't answer the phone. So document that you called. Document that you called, and follow up, that's huge. That's huge.
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Howard Farran:
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And you know what's amazing is so many times you'll talk to dentists, they'll be on Dentaltown or whatever, and they'll be saying they're all worried because there was a disaster case and first question, anyone used to ask, well, did you call them? No. It's just like why? Because humans are uncomfortable with an uncomfortable conversation but if something went south, that's when you need to pour in the [inaudible 00:43:51]. What's eight, nine and 10? What's eight?
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Stuart Oberman:
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I would say eight, one of the biggest problems is that our guys don't know when to discharge. They don't know when to fire a patient, they keep having this problem patient come back and back and back and years. They're like, well I should have fired this patient years ago, yeah you should have. They don't discharge patients and a lot of times, our doctors think that they can't discharge patients, so they keep treating, and treating, and treating and the next thing you know, the patient sits on the shelf, five years from now, all of a sudden they come back because they got a broken crown, broken bridge, whatever it is, that has nothing to do with what you did but now they're coming back to you. You should've discharged that patient years ago.
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There's a proper way to do it, you can't just send a text where, you know what I'm firing you, you can't just send an email, you can't just call and say I'm firing you. There's got to be a formal process. There's got to be a letter, certified mail, return receipt requested, you got to say, hey, you know, what? And this may vary on the state, but as general rule, you got to give 30 days of emergency service, and you got to tell them that they got 30 days. If it's not in writing, then that patient's pretty much yours until you retire. We have so many dentists that don't get rid of them and they think that they've had the same problem patient for 20 years and they can't get ... When I speak I get a lot of times, "Well, we can't fire patients," yeah, you can. Sometimes you have to. There's a misconception there that nobody likes to, nobody really wants to but there's times you've got to get rid of that patient and you got to formalize the process.
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Howard Farran:
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It's American folklore, that the customer's always right, and there couldn't be anything more wrong. You got to protect your staff, the staff come first, you treat them good, and you treat them really good, they'll treat your patients good. But the staff comes first. It seems like most of the patients I've fired is because they ... in the morning huddle you see them cringe because John's coming in at two and you're like, what is the deal? Then, I'll just say, go call John and tell him that Dr. Farran said he's out of here. One of the ones they fired was one of my best friends but when he goes into the dental office he's just, a monster comes out. I see also, not only not discharging but failure to refer. I've see a lot of lawsuits where the implant is failing they got this, they just keep seeing them and try this, six months, two years. Finally, the person goes somewhere else, and they get them for like, you should have sent this guy to a periodontist five years ago.
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Stuart Oberman:
|
You're not going to believe this, but that's number nine.
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Howard Farran:
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Oh I'm sorry. I'm sorry.
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Stuart Oberman:
|
Oh no no no, it's all right. It's all right. It's number nine. You are so right, guys don't know when to say when. They don't refer, they try to be the what's-the-greatest-now dentist and they're not trained, they're not properly trained, they're not skilled in a certain area and you don't refer out. If you got a bad root canal, refer it out. You got a broken piece of instrument, refer it out. You got a really, really deep root canal and you can't find the canal, refer it out, know when to say when. If you got to bring in a specialist, bring him in. But you are absolutely, that's so funny you said number nine because that's exactly right. That's exactly right.
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Howard Farran:
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Is sounds so logical to general dentists but where it's really confusing is with the specialist, especially the ones who think they're, the buck stops here, like an oral surgeon and I've seen some several million dollar lawsuits where they basically lost because they said to the oral surgeon, "Well, why didn't you refer to another oral surgeon?" But in his walnut brain he's thinking, well, everybody refers to me and I'm all that and I'm the greatest guy since sliced bread. They never realize that maybe you should get a second opinion when you've been treating a failed surgery for years and years and years.
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Stuart Oberman:
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You're exactly right. Guys just don't know when to say when. The good ones know when to say when, but you're right, the guys are referred to me and here I am, and I can do no wrong, and you got no to refer out. But that is number nine for sure. That is number nine.
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Howard Farran:
|
What's the finale? What's number 10?
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Stuart Oberman:
|
Progress notes. There are ways to make no progress note additions. In today's software, when a dentist thinks they got a problem, there's ways to go back and document things that maybe you left out, should've been in there. There's ways to do it, so what happens is all of a sudden you got a problem issue where a dentist has a board complaint, they realize they forgot all these notes, they're sloppy. Next thing you know, depending on the software you're using, you print out a patient's notes and you've got modifications all on the right side of the column. Every note that you modify, now comes up as a permanent record. It's when to know how to make notes, once you correct notes, supplement notes but they don't do it in a right way. A lot of times they got to cover their tracks instead of documenting things in a correct way, whether it's maybe writing in a margin, maybe dictating a particular narrative as a supplemental. There's nothing wrong with supplementing records, but it's when you try to cover up and remove records, alter records then you got a huge, huge problem.
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Howard Farran:
|
We had a boy in our backyard that had ... there was a ... the hygienist numbed up the little kid and he wasn't aware of that so he went in and numbed it up, so the kid went into an anesthesia overdose and that was all board and civil and all of that but where he got in the most trouble was he actually tried to change the notes. That took it from money and civil and spanking to now you're going to go sit in a cage, that's just crazy. I just pulled up the Dentaltown App and we got 50 categories, root canals, fillings, crowns, one's legal, and there's a lot of common questions about informed consents.
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Stuart Oberman:
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I would tell you what, I would never touch a patient without a consent form. And yet, I can't tell you how many doctors ... And we are very fortunate, we have some of the best of the best, and we take a look at these files for whatever reason, problem files, and you got the best of the best that do not use consent forms. They take a treatment claim as a consent form, that is so wrong. In today's world you got to have a consent form for everything but I would never, ever, ever, ever touch a patient without a consent form, I wouldn't do it.
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Howard Farran:
|
Where are these kids listening to you right now, where are they supposed to find the consent form?
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Stuart Oberman:
|
Depends what they need. We could prepare consent forms, and you got some really good places out there on the internet that they can buy consent forms.
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Howard Farran:
|
Any names, or leads, or websites?
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Stuart Oberman:
|
I think Gordon Christensen has got some good stuff out there, I think from what I understand. I think the American Dental Association has some good stuff. The problem is where you go in there and their guys will copy these sloppy consent forms and the sloppy consent forms will go ahead and get you in more trouble than you really know what to do with. I can only speak for us, I know our consent forms are extremely comprehensive, we try to get everything in there that we can, that can go wrong with a procedure. If you're going to do these procedures and you don't have a consent form, you got a malpractice issue, you got board complaint issues and you just got to think, this'll go wrong, and don't have any documentation to show what happened.
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Howard Farran:
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Another thing they're talking about is they're asking the boards is somebody writes a review and of course, a bad review, and a lot of the times it's a crazy person anyway. They want to know if they can sue somebody who wrote a bad review on Yelp or Google if it's filled with misinformation?
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Stuart Oberman:
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You really can't. Unfortunately, in today's world you really can't. The misconception is you take those guys head on and you can't take them head on because as soon as you take it head on, now you got an internet battle and you got a chance of literally revealing certain patient information where there's names, treatments, so you never take them head on. You got to do what they call a corporate response where you got to diplomatically respond to it, yet not take them head on and that's sort of an art. We got doctors that call up, they're mad. I get it. I get it, they're mad, they're unhappy, and the next thing you know, they want to go after this patient and tell them everything but you can't do it, you can't take them head on.
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Howard Farran:
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Another thing I'm curious about, the press is just all over the opioids, I mean, it's just an epidemic in the United States, probably killed 47,000 people this year. Do you see any dentists getting in any legal trouble from opioids, writing too many scripts, or anything like that?
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Stuart Oberman:
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Yeah. Well, not necessarily writing scripts but not keeping track of their scripts. You've got basically, you have things going online now, scripts being printed out, the doctors don't know where the scripts are going to, they're not keeping track of it, and they don't realize there's a problem until they get a call from a pharmacist that says, hey, you know, this is the fifth time this person has been here in this month, what's this prescription? You've got to be really careful what's being prescribed, how your scripts are being used, and do you have a checks and balance system for that particular prescription process? There's a lot of fraud.
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Howard Farran:
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The dentists listen to you, if you ask them, what do you do all day? They say, root canals, fillings, crowns. What do you do all day? Are you mostly doing mergers and acquisitions, is it partnership agreement, is it commercial real estate, is it entity formation, employment law commercially, what do you mostly do? What's your bread and butter?
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Stuart Oberman:
|
What's the bread? We do a couple things. We do a lot of mergers and acquisitions. The transition business right now is hot, it's a hot market. You're looking at offers three and four deep when things go on the market. We'll do a lot of buy-ins, buy-outs, great opportunities, guys coming out now have got enormous opportunities for buy-ins or partnerships, unbelievable opportunities.
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Howard Farran:
|
Is it a buyer's market or a seller's market?
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Stuart Oberman:
|
Sellers market.
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Howard Farran:
|
What's more valuable, old man selling or the new kid buying?
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Stuart Oberman:
|
Old man selling. Old man selling, it is an absolute seller. I'm telling you, when one of our doctors puts their practice up for sale, we got three offers deep.
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Howard Farran:
|
Where are you seeing these listings at?
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Stuart Oberman:
|
All over the country.
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Howard Farran:
|
Dentaltown has free classified ads and there's 6,000 free classified ads on Dentaltown, so we have people selling their practice, it's all free and we're putting that on the app next month. Have you ever looked at the online section on the classifieds at Dentaltown?
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Stuart Oberman:
|
I have not, I'm going to now. I have not.
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Howard Farran:
|
A lot of brokers that are selling practice, they list them in the local state dental magazine but they don't put them online, so there might be some kid in the Navy who doesn't get that state magazine. Talk to these young kids, or well, talk to the old man selling and the young kid buying. What should they be thinking about if old man McGregor is selling his practice and some young kid's coming out and saying I want to buy the practice. What do they both need to be thinking about? And, you're in Georgia, which was the home of Alan F. Thornberg with AFTCO. I think he pioneered the dual transition and a lot of people want to know, do you believe in dual transition, if you're representing the buyer and the seller, and his argument is that it'll just get the deal done, the last thing you need is two lawyers arguing. What do you say to that?
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Stuart Oberman:
|
To me personally, I don't like that. I think it's hard and we work for AFTCO and they're a great company, and I understand what they do.
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Howard Farran:
|
Is Alan still doing it or did he retire?
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Stuart Oberman:
|
I think he's still in there. I actually have never talked to him but we've got clients that work with AFTCO, and they do a good job. I think from a legal standpoint, I think it's hard to represent a buyer and a seller. I think you need two eyes on each side of the fence, I think you need a CPA on each side of the fence, an attorney on each side of the fence. The key is finding people that know what they do. We have lawyers and CPAs on the other side that don't this on a daily basis and it's a train wreck. It really is a train wreck. So I think if you get the right people in there that know what to do, know what to look for, I think it's a plus.
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Howard Farran:
|
They think they're doing everything right, because they go ask their pastor if there's an attorney who recommends a church and they say, Matthew, Mark, Luke, John attorney over there is the greatest guy on Earth, so they trust him. But then that person, they're not specialized and what you're saying is these lawyers are more specialized than physicians.
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Stuart Oberman:
|
You got to because if you don't understand a dental deal, if you don't understand a buy-in, you don't understand employment law, which is a big huge issue right now in dental practices. If you don't understand how that affects the dental practice, you're really doing your client a disservice. It's the same thing with consultants and CPAs, you got to be in the fray, you got to be in there every day to really understand what they do and if not it's a problem.
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Howard Farran:
|
If all a dentist does is switches his CPA from where he's the only dental client, or one or two, to someone who only does dentistry, it's a godsend, they go to another level and then same with law. At least in the United States and Canada, Australia, New Zealand and UK, you should get specialists in dentistry, there's no such thing as a general physician and there's no such thing as a general attorney.
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Stuart Oberman:
|
It's complex, you got to understand allocations, what's being sold, intellectual property rights, domain rights. You got to understand now, post-sale agreements, non-competes, non-solicitations. It's not like selling a gas station, and you run into a lot of issues with CPAs, consultants, attorneys, brokers; we got brokers who are not in the dental business and they don't understand what it takes to get it from point A to point B. They don't understand due diligence, they don't understand data rooms. There's a whole misconception that, I guess I can do dental but it's a whole different world, doesn't matter whether you're a lawyer, CPA, consultant or whatever. You've got to be a specialty in today's world.
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Howard Farran:
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This is Dennis [Phenson 00:59:07]. How does the money work? If I want to sell my practice, I call you and you list it, or do you just do the legal and someone else lists it? What does that cost?
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Stuart Oberman:
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It depends. A lot of times we have clients that have a buyer, and it was a great transition ... we don't broker, we only do the legal side. So if we have a client that comes to us and says, Hey, Stuart I got a seller or a buyer who wants to buy my practice, can you handle documents? We'll take it start to finish and sometimes, honestly, the buyer may or may not get an attorney. Or we may have a practice that's already listed with a broker or whomever and then we'll come in on the side and then the buyer or seller depending what the specialty is, because a lot of times brokers now, a lot of times, depending on the broker, they don't negotiate a lot of times. They don't do their own documents, they don't do lien searches. So there's a lot those guys don't do and lenders don't do those also. So it depends on what side of the fence we're on, but we don't broker.
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Howard Farran:
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What's the average broker, what percent fee?
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Stuart Oberman:
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Percent, we're seeing all the way from literally seven to 10%.
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Howard Farran:
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Seven to 10%?
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Stuart Oberman:
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Yeah, it's become a very competitive market right now. Seven to 10%.
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Howard Farran:
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What do you see in housing? What are the [crosstalk 01:00:28]
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Stuart Oberman:
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I think housing is probably ... the one thing about dentistry is brokers don't co-broker. Unlike the housing industry, brokers don't co-broker and I don't really get that, I think there's a win-win for everyone, but you know, unlike housing, housing is anywhere from four to 6%, 10% with raw land or commercial, so just depends on the transaction. I think if the broker side can get in to co-brokering, it would be a much better market I believe for everybody but they just don't do that. They don't do it. I'm not sure why, but they don't do it.
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Howard Farran:
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What should a kid be thinking, if they want to buy a practice and they're going to start to look?
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Stuart Oberman:
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I think they need to take a look at a couple of things. One, the culture, because if you do it for the money, if you go in there and the guy is making $1.5 million a year and you do it for the money, you will never make it. It's got to be a good fit, good culture, you got to understand what the practice is like, you got to understand what the treatment process is like. If you are very clinical in nature, and you're going to a chop-chop, that's a drilling and filling and get out there that type of thing, you're asking for trouble, it's culture.
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It's got to be a good mix, you got to meet with the doctor, you going to look at the charts, figure out what the notes are, figure out what your capabilities are, figure out what the market is, figure out where you're at, is that an area. In Georgia, in many states, outside the area, outside the metro area are the guys making all the money. In Charleston, guys an hour outside of Charleston are making all the money. Guys inside Charleston are dying.
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Howard Farran:
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I know. I know but they're millennials, and they have to build their office across from the sushi store.
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Stuart Oberman:
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You got to look at the culture, if you're doing it just for the money, you got to be careful with what a broker is selling too. You got to do your due diligence. If you're in it just for the money, you will never make it and you will fail.
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Howard Farran:
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Just stop and rant a little bit, because I agree. Whenever I see young kids just go out and crush it, they always went rural. What would you say to some kid who says, I don't care, I'm going to go right downtown Atlanta and set up a cosmetic practice across the Fashion Square Mall.
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Stuart Oberman:
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You better know the competition around you, you better know what your demographics are, you better know the location. Is 10 orthodontists within five miles from you, or is there one within 20 miles? Where is your patient base coming from? In rural areas, your patients are coming 40, 60 miles away. In inner-city, they may come three blocks. So you've got to know your demographics, you got to know where your competition is, and why in the world are you going to go onto a corner when there's six dentists in one complex. Can't do it, you're not going to make it.
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Howard Farran:
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You always see six McDonald's on the same corner.
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Stuart Oberman:
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Right, it's tough.
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Howard Farran:
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I know.
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Stuart Oberman:
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It's tough, but literally, and dentists outside the rural areas in many states can't get associates to come in there. You tell them doctors are making two or $3 million in a rural area and they can't get an associate to come down there. It's horrible
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Howard Farran:
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I know. It's just the most important thing, demographics matter, they matter so big. I don't know why they just don't ... either live out in the rural, work four 10s, and drive in on the weekend or whatever. I don't want to throw all the partners under a bus, marriage, 50% of the time fails. You've been doing this for decades, what are your thoughts when two dentists say, "We're going to get married, and be a partner." It's like, well, do you have great sex, children, spend evenings, weekends and holidays to have family, do you have all this glue to keep it together? They say no, I'm just going to marry an ugly, fat male dentist and I'm sure we're going to get along 'til death do us part. How long does that death do us part usually last before, what's your thoughts on partnerships?
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Stuart Oberman:
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You got to have the right scenario. A lot of times guys coming out of school, they're buddies, they've known each other through dental school, they're a year or two out, they've known each other in the same study club, hey, let's go into partnership, disaster. Disaster. It's got to be the right culture, the right fit, you can't just be a friend, you got to have a strong and weak points. Which one is better with business, which one is better clinically, which one is better organized, what are your specialties, what are your limitations?
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That's what buy-ins on established doctors are really fun because if an associate is in there a year or two, they know it's a good fit. If you become a partner and you think you've known this guy for a while, and all of a sudden you've got a lease with them, you got an LLC with them, you're partners, and you can't stand each other because you're in closed quarters eight hours a day, four to five days a week. You've got to understand what the culture is, you got to understand why you go into that and whether or not you guys are compatible. Just going into it because you guys are buddies and you drink every Thursday night at The Study Club, then that's a wrong reason. That's the wrong reason.
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Howard Farran:
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The biggest legends in dentistry used to be partners, like [Don Quoise 01:05:57] and Spear used to be partners, Buchanan and Ruttle used to be partners. Do you think that dental partner success rate is same as marriage, do you think it's about a 50/50 fail? What do you think if Joanne and Jerry go be partners, what's the percent chance that they'll break up someday?
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Stuart Oberman:
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You know, it's probably 50/50.
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Howard Farran:
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Yeah, like marriage.
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Stuart Oberman:
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But a lot of dentists don't partner, a lot of them are solers and they like that. Unless it's a buy-in, which is the most prevalent, you don't see a lot of times guys going in together. I'm not going to say it's not the norm, but it's more common for buy-in with a younger associate and older doctors. Yeah, I don't think I see anything else. 50/50 probably, like most marriages.
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Howard Farran:
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It seems to me that the average dinner conversation, when they break up with their partnership is they say, it was worse divorcing my dentist business partner than it was divorcing my wife.
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Stuart Oberman:
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Oh god, it's nasty.
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Howard Farran:
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They said him and the wife settled, blah, blah, blah, blah, but the partners, they're just two bulls fighting and dragged it out in court for years and most of them say it was worse than their divorce.
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Stuart Oberman:
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I know the break-ups that we've handled, it's absolutely, some of the worst ones and I'll tell you the worst cases. So, it's absolutely some of the worst breakups you could have versus a divorce between a husband and wife over dental partners. It is a bad, bad scenario, because then you're dealing with millions of dollars in debt, then you're dealing with patient issues, then you're dealing with staff, it is a nightmare.
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Howard Farran:
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I want you to talk to these kids, because a lot of ... If you ask any stranger off the street, dentists, doctors, lawyers, do you think those guys are humble? They laugh at you. Nobody in America thinks a dentist, a physician, or a lawyer is humble. These kids, they get out, they'll go sign a five year lease for a de novo startup but they won't get an attorney to read over the lease. They'll sign these insurance HVO contracts, when the American Dental Association has a free service because they've reviewed them all and you just tell them the name and they tell you all the pitfalls and everything. They just don't get legal advice. I think when they graduate, I think they heard the dean of the dental school say, congratulations, you're a doctor of everything, you're a DOE, and it's like, dude, you're a doctor of dentistry, you don't know shit about anything else and you don't be signing contracts in America without someone reading it. Do you agree or disagree?
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Stuart Oberman:
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I agree. The biggest thing that bothers me on that side is that we got to clean this up. All of a sudden we got to clean up after the associate. It's true, we got to clean it up, we got to get the associate out of a contract because he's got a 10 mile noncompete, 20 mile noncompete. We've got to get a dentist out of a contract because they're messing with his money, they're not paying him right. The whole litany of things that guys don't, they just sign these contracts, and they don't understand the ramifications, well that's a lease.
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We end up cleaning up a lot of leases on renewals because the deals are horrible, they don't consult the experts. I think you're absolutely right, they don't consult, and then they say on our end we clean up a lot of issues. We have a lot of guys that'll startup, and I will tell you, they don't start up. Well, they startup and they don't have the OSHA manual, the HIPAA manual, employee manual, social media policies, these guys don't have it and they don't get it until a year or two down the road, until something happens. We see this all the time, it is not uncommon. It is not uncommon.
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Howard Farran:
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My final words and thought is, when you talk to researchers, they say, when you dissect 100 dolphins or 100 chimpanzees, or 100 mice; everybody's got the same brain, so why does one person excel in the violin, and another person doesn't, are you interested in this? The biggest red flag I say to you young kids that walked out is, if you're not interested in the business, if you're not interested in looking at the insurance and the books and reviewing the leases and all you do is fantasize about root canals, you better find somebody, you better get an inside man whether that's your spouse, your office manager or whatever, because I think humans always do really, really well if they're interested and passionate and really into something. If you're not into this stuff, maybe you should be an employee, maybe you should go work for corporate because business is a lifestyle, it's a 24 hours a day, seven day a week. When you own a business, when does it stop? It never really stops.
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Stuart Oberman:
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It doesn't.
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Howard Farran:
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So get your spouse ... And the other thing I don't see is you'll ... Usually the apple doesn't fall far from the tree. So if you graduated from dental school, usually your whole pedigree is peppered with accountants, CPA's, debt physicians, lawyers, or spouse has married a bookkeeper. You can get some help in the family tree. I know people that have so much resources just sitting at the Thanksgiving table and they've been embezzled against for years and he could have had his sister-in-law coming in one hour a week on Friday and going over things like that.
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Man, we went way over but I could listen to you talk for 40 days and 40 nights. And one last thing I also want to say to the old guys out there is mergers and acquisitions are so huge in the S&P 500 and I see dentists all the time making this stupid mistake where there's eight dentists in this small town and one of them put his practice up for sale and then they attract some 27 year old high energy whipper snapper who's good on Facebook and everything and that guy comes in there and just doubles the practice at the expense of the other seven.
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And then I see other cities where someone will say, "Wow, I'm doing a million, he was doing 700,000, I'm just going to ... mergers and acquisitions, I'm just going to buy that practice and move all the charts into mine." And then you take the purchase price and you divide it by the number of active charts, a lot of these dentists are buying new patients for $100 a head, yet on a Google Ad Word or direct mail or yellow pages they might be paying $350 a head. And I think whenever I see dentists crushing it, a lot of them did two or three mergers and acquisitions over their lifetime. It's all relationships so when you buy old man McGregor's practice and Helen was working at the front desk for 30 years and now she's at your front desk, those patients follow.
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Stuart Oberman:
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Oh, yeah.
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Howard Farran:
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I think M and A activity, it's probably the number one most overlooked deal. But when you go into corporates, how many practices has Heartland bought on its journey to 1,500 offices? They've bought a gazillion practices. Corporate knows M and A activity but general dentists don't know and I'd rather supply and demand, if there's eight dentists and one sells, I'd rather buy it now, reduce the supply of dentists from eight to seven, than be 55 and now competing against some 25 year old kid who's got enough energy they're bouncing off the walls. But anyway, thanks for all you do. Last question, what are they going to find on Obermanlaw.com? ObermanLaw.com O-B-E-R-M-A-N. And how do my homies contact you?
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Stuart Oberman:
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Oberman Law will tell them about what we do, how we do it, what our services are and if anyone wants to call, get on our e-mail list, we have a constant contact that's dental specific, a newsletter, we love it. E-mail us at Stuart, S-T-U-A-R-T @Obermanlaw.com, or call us: (770) 554-1400. I love this business, I'm passionate about it, and I can't help out guys enough. So to me, I'm just on a mission and I love Dentaltown. You guys do an unbelievable job and I can honestly say I read it start to finish every time I get one. I love it and you guys just do an unbelievable job getting-
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Howard Farran:
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And you got a podcast too.
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Stuart Oberman:
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Yeah, we do a podcast, yeah.
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Howard Farran:
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How many shows do you have? How many podcasts have you done?
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Stuart Oberman:
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We did Bernie Stoltz with Fortune Management, we just got done doing one, finishing one with Rico Short-
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Howard Farran:
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The most amazing endodontist I know.
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Stuart Oberman:
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Yeah.
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Howard Farran:
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Rico Short, god dang, I love that guy. [crosstalk 01:14:50] He is just amazing. He's got more passion than all the other endodontists combined.
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Stuart Oberman:
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Yeah, great information, I love talking to the guy. I mean I love-
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Howard Farran:
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You should, a couple things, you should post some of those podcasts on Dentaltown because a lot of them, they're getting in their car, they open up the app and there's like 39 different dental podcasts on the app. And a lot of them when they find it, then later they'll go sign up to it on iTunes or something but everybody who's uploaded their podcast said their show exploded on iTunes and everywhere else they posted. It's free marketing. And also that newsletter, you could also repost that newsletter in the Dentaltown blog because what's real cool with the blog is, or when someone writes an article, is on Dentaltown when you're reading it online you can share it.
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So, I always tell my homies that these guys go out of their way and write this stuff for free so if you read it and you got something out of it ... I mean some of these people spend a week or a month writing these things, the greatest compliment a dentist can give is to reach up and click that share to your Facebook, share to you Twitter or share to your LinkedIn, Pinterest, Google Plus ... And I'm really, I love that. The shares have been climbing. The number of people sharing an article has been doubling about every four to six months. So if you put a blog out there, so if you repost that dental newsletter on your blog and someone reads it and likes it, they're going to share it to their Facebook, Twitter and-
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Stuart Oberman:
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We're going to do that. We're going to do that, we're going to do that. We're going to do that.
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Howard Farran:
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Yeah, but hey thanks for all you do for dentistry, I loved talking to you and I can't wait to see you again.
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Stuart Oberman:
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My pleasure, thank you.
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Howard Farran:
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All right buddy, bye bye.
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