As ADA Practice Transitions (ADAPT) has expanded nationally, we hear a couple of questions over and over:
- How is ADAPT related to the American Dental Association?
- How is ADAPT different from a traditional broker?
Let’s start with ADAPT’s creation story.
Origins: why and how the ADA created ADAPT
In 2018, the ADA undertook an extensive consulting project that included a qualitative study to understand the challenges facing dentists in the current market. The ADA selected a consulting firm that typically deals with consumer markets to gain a fresh perspective on what drives dentists to support, or not support, organized dentistry.
The firm interviewed many dentists and determined that the majority wanted practical support from the ADA that was applicable to their real-world problems. So what were those real-world problems?
- Experienced dentists struggled with hiring new dentists and with selling their practices at the end of their career
- New dentists reported that they came out of dental school feeling like their only option was to work at a DSO. While that was fine for some, others reported that their ideal was to find an independent practice where they could learn how to run their own show someday – but they didn’t know how to go about doing so
With that in mind, the ADA decided that it would re-imagine the way that dental transitions take place – whether that meant selling the practice or hiring an associate to support growth.
Additional quantitative research revealed that a majority of owner dentists’ ideal scenario was to sell their practice to “a dentist who shared their philosophy of care so that their patients and staff could experience continuity of care.” Meanwhile, among incoming dentists, 61% of those under age 40 aspire to own their own practice, and many would like to work in an independent practice as opposed to being an employee dentist.
And that set the foundations of ADA Practice Transitions.
61% of those under age 40 aspire to own their own practice
ADAPT is a service offered under a company called ADA Business Innovation Group, or ADABIG. ADABIG is a for-profit C-Corp registered in Illinois as a wholly-owned subsidiary of the American Dental Association. It is legally necessary to be set up this way to protect the tax-exempt status of the ADA. Because ADABIG is a for-profit entity, it reports to an independent Board of Directors made up of a combination of dentists involved in organized dentistry and business experts experienced in building new companies. As the sole investor, the ADA retains approval over the ADABIG Board of Directors and manages it as a strategic investment. The ADA Board receives updates on a quarterly basis, at minimum.
From the beginning, the purpose of ADAPT was twofold. One was to contribute non-dues revenue to the ADA to minimize the need to increase dues. The win-win of this situation is that we know that ADAPT can deliver a high quality service to dentists at a lower cost than is generally available in the market – saving dentists money both on dues and transitions. And since ADAPT has redesigned how these transitions are managed, we can achieve these savings without compromising on quality or service. In fact, ADAPT leverages the knowledge and resources of the ADA in ways that are efficient and convenient for members through an online platform. ADAPT has taken the time to distill the wealth of information on ada.org to exactly what a transitioning dentist needs, delivered at exactly the right time in the process. Ultimately, that enables the transaction at a lower cost.
ADAPT gives dentists more options
Beyond cost savings, we developed ADAPT to help solve those two key challenges facing transitioning dentists: finding the right person, and charting the best path to reach their long-term goals.
We found a surprising number of dentists at the end of their career were simply closing their practices because they could not find a buyer – most often in smaller towns or rural areas. This is heartbreaking for the dentist and for the community they serve. The dentist often feels like they are abandoning both their community and the legacy they took decades to build. Plus, community members now must drive a significant distance to access dental care. This is especially problematic for children who now may have to take a full day off school just to visit a dentist.
If you talk to accountants, they will tell you that rural practices can be some of the most profitable they encounter – but many younger dentists do not realize that. At ADAPT, we spend a great deal of time and resources helping dentists understand the tradeoffs, benefits, and challenges of a rural practice so that they are making informed decisions. We are working to spread the word, and we are already seeing an increased interest. One of our favorite ways to do this is by sharing stories from some small-town and rural dentists who have enjoyed very satisfying careers, including Dr. Christy Rens, Dr. Daniel Hall, Dr. Jim, and Dr. Dean Hussong.
Through this, our goal is to help retiring dentists connect with incoming dentists so they can ensure long-term continuity of care for their patients – rather than facing one of these heartbreaking closures.
If you talk to accountants, they will tell you that rural practices can be some of the most profitable they encounter
Meanwhile, we are working to help dental students and other younger dentists better understand their options, which often means helping them think more broadly about what their ideal practice may look like. After all, dental students told us that they do not feel like they have a choice other than to work at a large corporate dental service organization. While that is exactly the right option for some, the majority expressed interest in understanding alternatives so that they could compare options.
ADAPT is doing this by explaining things like rural options and alternative routes, such as an associate-to-owner path that can help an ownership-minded dentist gain skills and experience from an owner approaching retirement. This associate-to-owner path can be an ideal way to “hand off” that legacy in a gradual, thoughtful way, as two of our matched dentists, Dr. Joe Thibodeau and Dr. Kristen Sciolino, explain.
Is ADAPT just another broker?
So does that mean that ADAPT is just another broker, sponsored by the ADA? Not quite. Certainly ADAPT offers many of the same services of a broker. We match buyers and sellers for dental practices, as well as matching employers with associates.
At its most basic level, we offer the same things, and sometimes we do it the same way. Both ADAPT and traditional brokers will provide you with guidance, resources, and checklists to prepare for the contract stage of your transition. Both ADAPT and traditional brokers will guide you to lawyers who will help create the necessary documentation. But other aspects of the service can be quite different. Here are the main ways ADAPT is different:
ADAPT starts with cultural fit (how do you interact with patients and run the practice – something we call “philosophy of care”)
In our research, we learned that when an associate left before the intended time, it was often because there was not a good cultural fit between the owner and associate dentist. When a practice failed soon after being purchased, it was because the new owner had a significantly different approach to patient care and patients left to find a practice more similar to what they experienced with the previous owner. ADAPT is committed to minimizing these failures, so we make philosophy of care the starting point for the match.
ADAPT does not “list” practices
You cannot go to the ADAPT website and browse available practices. Instead, we ask dentists to share who they are and what they desire and then we use a combination of a preference filters, an algorithm, and human judgment to identify good matches. That means your potential connections are “pre-screened” for success.
ADAPT does not demand exclusivity
Many brokers will only work on your behalf when you sign an exclusive agreement with them. This actually makes sense, as it could become tricky if a dentist lists with multiple brokers. But that also means that you could be obligated to pay a broker even if you find the buyer on your own. At ADAPT, we only expect to be paid when we provide value. If we match you with someone through our platform, we require payment even if you may have known the suggested dentist previously. But if you meet a new dentist at a local dental society meeting and that dentist is not a participant on our platform, we are just happy you found your match.
Most importantly, ADAPT is owned by the American Dental Association
It is true that ADAPT must become profitable in the long term, but the goals go beyond that. ADAPT is highly motivated to provide good value, especially for member dentists. We have access to all of the resources and expertise of the ADA so that we can leverage that knowledge and access on behalf of our clients every day.
If you’re considering your own practice transition, I urge you to give us a try. It costs nothing to create your own profile, which gives you access to a dedicated ADA Advisor who will help you think through your next steps and options. And if you submit your profile before January 1, you will lock-in our introductory pricing: ADA members pay just 4% for a practice sale.