Due Diligence for Practice Sales: Reviewing Patient Charts
Performing due diligence on patient charts can be a big undertaking, but it should not be overlooked. By examining the charts, you can tell what type of dentistry the seller performs, how the practice cares for and follows up with patients, how patients are scheduled, and how the practice makes financial arrangements.[Check out our overview of the process of buying a dental practice.]
Chart Review: Review a few dozen of the active patient charts.
Paper Chart Count: If there are paper charts, manually count the charts and compare to the computer numbers. Be sure to only count the current charts.
Random Chart Review Notes and Log: Select a few dozen patients randomly and keep a list or log with the following information:
- Last full series of x-rays,
- last bitewing x-rays,
- last prophy,
- last perio charting,
- written treatment plan,
- written financial arrangements,
- type of dentistry (see below)
This gives you a feel for the thoroughness of the charting. Most offices have over $1,000,000 of diagnosed undone treatment. Run a report of this, but of course know that the stats just mentioned are typical and should not be cause for alarm.
Types of Dentistry: In most cases, the dentistry performed by the selling doctor should match the type of dentistry you do or intend to do. Treatment plans should appear solid and predictable, with treatment completed in a reasonable amount of time.
From my experience, getting compliant on x-rays and perio charting can be a gold mine for a new owner (or any dentist at any time). The same goes for dentists who do patchwork repairs. I would consider a “patchwork” practice that doesn’t have up to date x-rays or perio charting as a practice with tremendous opportunity for growth. Ideally, there should be plenty of dentistry left for me to do on the patients of record.
Insurance Billings Validation: Ensure that the X-rays and treatment notes seem to validate treatment billed to insurance.
Distance Patients Live from the Practice: Check the active charts as well as review a computer zip code report. Practices that have been in one location with one doctor for a long time often have many patients that have moved out of the area and still commute to the office. Be aware that some might find a new dentist closer to home rather than make the 2-hour drive (or flight) to the seller’s office.
Is your style of dentistry similar to the sellers? The selling Doctor’s treatment planning patterns should match your experience and overall dental philosophy.
Clinical questions to ask the seller:
- What is your favorite type of dentistry?
- What types of procedures do you refer out?
- What special clinical training or courses have you taken, and would you recommend I take any of these to better serve the patients?
- How often do you do periodic exams?
- How often do you take x-rays?
- How often do you perio probe and when do you refer patients to the periodontist?
- Who do you like to refer to for endo, perio, OS, Ortho, etc.?
- How are your relationships with the specialists you refer to?
- What kind of mouth splints do you use?
- What kind of whitening systems do you use?
- Do you place amalgam?