The questions don't stop when it comes to the mechanics of hiring new associates. Several readers have written to ask when to add new employees and how much to pay them.

Generally, it shouldn't be too difficult to determine if you need a new associate. Just look at your appointment book. How many slots are open? How long does a new patient have to wait for an appointment? Practice experts differ on rules of thumb, but in my opinion, if it takes 3 weeks or longer for a new patient to get an appointment, you are almost certainly losing patients and referrals to your competitors.

Another red flag may come from your referrers. If you are beginning to hear complaints that you are not as available as you once were, or that your reports are not prepared in as timely a manner, it is important to address these concerns before your referrers begin sending their patients elsewhere.

Young associates also ensure that your practice will continue to thrive. Your long-time referrers will eventually retire, and the young newcomers who replace them will naturally tend to refer to specialists closer to their age, leaving your practice to stagnate if younger physicians are not a part of it.

Additionally, expanding your practice may enable you to negotiate better terms in your managed care contracts by offering more hours and services.

If you are referring out substantial quantities of subspecialty services, such as laser or cosmetic work or Mohs surgery, you might want to recruit an associate who is specially trained in those services to keep those patients in-house.

Before you begin recruiting, however, make sure that all of the current physicians are in agreement that another physician is necessary.

It is worth considering the possibility that your practice needs something other than a new physician. If physicians are doing administrative tasks when they could be practicing medicine, consider hiring a practice administrator to manage your business and finances.

You may want to consider bringing in a nurse practitioner or physician assistant to do acne follow-ups and other routine duties, freeing physician time for more specialized procedures. (If you missed the column I wrote last year addressing this subject in detail, go to www.skinandallergynews.com

If indeed it is a new physician that you believe your practice needs, consider all of the costs related to hiring and supporting him or her for at least the first year. (Once again, check out the online archives for a previous column addressing this subject in more detail.)

You must also remember to include the costs of additional support personnel; additional examination or procedure rooms; a larger reception area; and the associated mortgage or leasehold improvement costs, overhead expenses, payroll taxes, and lawyer fees.

If the new physician provides services that are new to your practice, you will most likely need new equipment. This means that you must factor quotes from suppliers into your calculations.

Then, there is always the question of just how these additional costs will be met. No matter how large their current backlog, many dermatologists worry that their practices won't have enough additional patients to support a new doctor.

You can remove much of the guesswork by estimating how many additional patients your practice will need to break even. Do that by dividing your previous year's total revenues by the total number of patient visits to determine average revenue per visit. Then divide the total estimated cost of hiring a new physician by your revenue per visit. This is the approximate number of additional visits that must be generated for the new associate's costs to be covered.

The calculations will, of course, become more complex if the new physician will be doing only Mohs or cosmetic procedures, but you get the idea.

How much you pay a new associate will depend heavily on your location and individual circumstances. Find out what nearby practices are paying their recruits, and ask applicants themselves how much they expect to be paid.

The ultimate determination may require the services of an experienced practice consultant who is familiar with your practice area.

Many candidates will also expect incentive compensation for exceeding their revenue-generation goals.

You should also consider rewarding other performance achievements, including relationship building, teamwork, practice promotion, and attraction of new referrers.

Remember to factor in the fringe benefits that your practice provides. Most compensation packages include such standard benefits as paid time off, health insurance, society dues, hospital staff fees, CME costs, subscriptions, retirement plan contributions (when eligible), and malpractice insurance.

Lastly, you may also want to consider covering the physician's moving expenses, especially if it would help close the deal.

Hiring a New Associate