Life Is Good, Mostly

For patients and dentists, the Reston Dental Arts Center model proved robust. Patients received comprehensive care from qualified dentists right in their neighborhood. The hours were convenient; the practice was open Monday through Saturday from 7am to 9pm. Some 70 dedicated staff, including billing and insurance personnel, receptionists, dental hygienists and dental assistants, took care of patients.

As they had done as individual practitioners, Reston Dental accepted no insurance. The administrative and time costs of doing so did not seem worth it. The group practice also offered no discounts. Nonetheless, patients flocked to it. While there were some leaner years, the practice flourished. It needed 35 clinical chairs to keep up with demand. After a while, the group expanded into space next door for a laboratory, so it could control and retain benefits from lab work. Recalls Averne:

This was revolutionary. It was a clinic Ninety-nine percent of the patients who were already in the practices were pleased with the convenience. The quality of the practice didnt change. The quality of the doctors was unchanged. All in all, I would have to consider it a success.

For the dentists, the benefits of combining skills and resources were many. Staggered shifts allowed them to work less and yet enjoy an annual income ranging from $422,000 to $856,000. The group shared expenses for equipment, supplies, staff and other administrative functions. Each dentist contributed monies in proportion to his use of the common goods and services. On the revenue side, each dentist maintained his own practice and his compensation came exclusively from his own production; no revenue was shared. However, any expense contributions remaining at the end of the fiscal year were returned proportionately to the partners. Eichler comments on the impact of seeing the income distribution within the practice:

I was the one that put together the graphs, and it was amazing when you saw your performance against [that of] the guy sitting next to you. That motivated. I was never the top performer, Vinnie [Mascia] was never the top performer, but I think it motivated both of us to work on it. Even though we worked a six-hour shift, seven-hour shift, four days a week, we still produced a heck of a lot of money. [6]

Eichler discusses income distribution and motivation

To sustain such a large and growing practice, Reston Dental engaged a variety of associates as required. The goal was to bring ambitious, highly-skilled dentists into the practice and eventually make them partners. Under this model, new dentists could join and eventually buy their way into the partnership. The capital they contributed would be paid to older partners to allow them to exit. The price of admission was typically several hundred thousand dollars, and it could be paid over time. Over the years, this sometimes worked, especially with younger dentists. But those who joined further along in their careers often declined to become partners, as the return on the capital required to buy in was not seen as compelling.

Real estate. In addition to the joint practice, some of the doctors also belonged to a real estate partnership that owned the building where the practice was located. The extended operating hours meant maximum utilization of this asset. But the building was a sore spot in the doctors relationship. Some felt the building was like a fortress: the price to buy in was set so high that it precluded new entrants. In addition, non-owners saw the rent the practice paid to the buildings owners as excessive.

The non-owner dentists perceived that all doctors were paying some doctors rent above market rate, and that there was no way to break into that rarified world. Whether true or not, this idea persisted and contributed to ill feelings among some of the dentists. Mascia, for example, was not an owner, and in fact turned down a chance to buy in because it was too expensive. He recalls:

[It] actually was a contentious issue with me. There were tax advantages for billing out the office rent per square foot to the practice, at a set value, which may or may not have reflected true market value But on the back end, if you didnt own the building, you didnt necessarily reap the benefits of that approach. Ultimately, I did seek to become part of the building [arrangement]. And because I was one of the first potential new partners, they made a suggestion at the time of the cost to buy in But the price that they offered was way beyond the assessed value of the building. [7]

Other cracks appeared over the first 10 years of the partnership. Cliques began to surface among the doctors according to the physical proximity of their dental chairs, their age and their specialties. Averne remembers:

I guess little cliques formed out of the 10 partners, and Vinnie and I were empathetic. Physically we were 10 feet apart It was a small corridor between the pediatric suite and the orthodontic suite. And we just got very friendly.

As Mascia recalls it, the general dentists shared a group think distinct from the specialists. He says:

The general dentists tended to have more of their way because of the dynamics of both their strong personalities, and they were somewhat more seasoned. And they were the original developers of the project. In theory, we all had a similar say and one vote. But in essence, it tended to be much more driven by the general dental perspective.

The practice was home to strong performers and strong personalities. In general, whoever spoke loudest or with most authority at the monthly partner meetings got the equipment purchases and other preferences he sought. But despite the stresses and strains, it was hard to argue with results. As of 1997, the practice generated $9.5 million in revenues and employed over 100 people.

[6] Researchers interview with Dr. Thomas Eichler on January 10, 2014 in Reston, Virginia. All further quotes from Dr. Eichler, unless otherwise attributed, are from this interview.

[7] Researchers interview with Dr. Vincent Mascia on January 5, 2014, in Charlottesville, Virginia. All further quotes from Mascia, unless otherwise attributed, are from this interview.