8 Dec 2023  •  Blog, Practice Management  •  4min read By  • Sarah Barnard

Three ways to pay associates for their plan membership income

Regional Support Manager, Sarah Barnard, offers some suggestions for dealing with a subject raised often by practices – what is the best way to pay associates for plan membership income?

I have worked for Practice Plan for more than 20 years, and in that time, one of the most frequently asked questions has been about how to pay associates for the membership plan income they generate. If you are wrestling with this question, then it’s important to keep in mind your ultimate goal. What are you hoping to achieve?

Being fair to everyone

Most practices I speak to about this want to make sure that their associates are paid fairly and are happy with the arrangements made. However, it’s also important to make sure your business is making enough income from your plan membership after paying your associate. So, our goal is to find a method of calculating this pay that is easy to administer, has sufficient transparency to satisfy your associate while at the same time generates the right level of income for your business. On top of that, it also needs to be future proof.

Over the years, we have found there are three common ways of calculating this. The first one is where you simply calculate your associate split based on their registered list of plan patients, minus the hygiene contribution. You can find this information quite easily on their monthly plan statement. Any hygiene appointments can be deducted in the same way as a lab fee.

With the second method, the associate is paid simply based on activity. So, they will be paid an examination fee each time they see a plan patient. Finally, the third method is where the associate is paid an examination fee for each of their patients on plan. So, in other words, you arrive at their fee by multiplying the examination fee by the number of plan patients registered with them.

Pros and cons

There are pitfalls and benefits to each of these three methods of paying your associates, so it’s up to you which one you choose.

Method one is quite simple and easy to understand. However, it can be very heavy on admin and you will need robust monthly hygiene reporting to make sure that the amount deducted for hygiene appointments is correct. With this method your associate will end up with the majority portion of the plan income.

Method two is also very simple. However, it’s less attractive to associates as they are paid on activity rather than the plan income. Which means there is little or no incentive for your associates to grow the plan list themselves.

Method three is also easy to administer and is also transparent and fair. It’s hardly surprising that this is the method that proves most popular with practices. We find most associates are happy with this method and there is real incentive for them to grow their plan list.

To help make life easier for practices, we have created a guide to help establish ways of paying associates for plan patients which also includes calculations for the hygienist element of the plan income. The guide goes into all these pros and cons in more detail so you can choose the method that best suits your circumstances. Alongside this guide we have also created calculators for each method to help practices put their chosen payment method into use.

The guide and calculators are available to all Practice Plan practices. So, if you’d like to know more, have a chat with your Regional Support Manager. You can listen to Sarah’s podcast on this subject here.

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