How to Permanently Plan for Temporary Disability (Part I)

Some of the most important planning in business relates to making preparations for the unexpected.  The businesses that have protections and safeguards in place to weather unforeseen circumstances are more often than not, going to be able to come out of that hardship and get back to what they do best.  Unfortunately one of the most common issues that can put a dental practice out of business for extended periods of time is temporary disability of the doctor.  If the dentist in a practice can no longer work, then the business as a whole can come to a standstill.

What are your options if this happens to you?  One of the more traditional solutions is to obtain business overhead insurance and or personal disability insurance.  These would help keep the practice and the doctor afloat during short periods of disability, usually up to a year.  The down side to this option is that they can be expensive, costing thousands of dollars a year in premiums.  Plus, the insuring doctor has little control over what happens to their patients while they attempt to recover.  If patients can’t see their dentist for up to a year, chances are they may find another practice.  This can have a devastating effect once the disabled doctor returns to dentistry.

Another option that provides for some cost savings, while at the same time allows doctors to have some guidance to the future of their patients, is a “Practice Continuation Agreement”.   This is a contract with another dental office, or groups of dental offices, to take over your practice in the event you can no longer practice dentistry for health reasons.  These kinds of alliances can reduce the amount of disability insurance needed since the substituting doctor would still be generating income for the practice.  It also can assure that the patients for the disabled doctor continue to see someone with the same dental philosophy.  Since patients would feel less of a change in treatment type and frequency, they would be more likely to remain at the practice throughout the disabled doctor’s much needed recovery time.

There are a myriad of factors that come into play while determining which type of disability protection is right for your practice, so please give us a call if you have questions.  As the practice continuation agreement can have many moving pieces, we will dig into it in more detail next month.

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