Dental Hyigienists and Dentists: Financial Considerations

Turning a Profit on Your Dental Hygienist Investment
Editorial by Jim Du Molin

Once again, I’m putting my capitalist hat on and analyzing the economics of dental hygienists. (I started by discussing the economic aspects, and last week I talked about how you can turn a profit.) The dentist needs to begin by preparing an operatory for a hygienist, then actually hiring one. Done properly, the dentist will then start earning a healthy chunk of passive income. At this point, many hygienists may view the dentist as a fat capitalist who is getting rich off the sweat of their labor. They fail to recognize the cost of capital and risk.

As a capitalist, your risk is the cost of equipping the hygiene operatory. If you have to add a staff member in administration to schedule hygiene, that cost would also have to be considered.

In our example, we’ll assume that your cost is a $554-per-month loan payment on equipment for the hygiene operatory. When we subtract this cost from the previous increase in profit, the net return is $5,799 per month, or about ten times your risk. As the number of hygiene days per month increases, your return on investment continues to grow. And that’s what American Capitalism is all about.

Profit on Hygiene Investment

Number of hygiene days per month 4 8 12
Profit on hygiene production* $1,169 $2,338 $3,506
Profit on dentist’s production* $5,184 $5,184 $5,184
Less: capital investment – $554 – $554 – $554
Total Net Profit per Month $5,799 $6,968 $8,136
* before indirect overhead costs

If you’ve got comments on the economics of hiring hygienists, feel free to post them below!

Dental Management Decision: How To Pay Your Dental Hygienist (video)

Dental hygienist payment videoMost dentists (81%) paying their dental hygienists a base hourly wage. Only 19% say their dental hygienist payment includes commission.

“Hygienists are a critical aspect of any practice,” said one prosthodontist who pays on commission.

“My hygienists make quite a bit of money on commission,” offered another dentist. “They sell sealants, fluoride, Arrestin, perio med, not to mention dental crowns, Invisalign, etc.”

“Hourly wages are unfair; the dentist takes all the risk,” said a pediatric dentist. “I continually have to remind my hygienists to utilize downtime constructively for something other than ‘dusting’ their workspaces. But in past when I paid on commission, I tended to lose my dental hygiene staff during downtime.”

Read more: Dental Hygienists Get Paid by the Hour

Dental Care: Are Mid-Level Practitioners a Threat to Dentists?

Dental Care: Are Mid-Level Practitioners a Threat to Dentists?Can mid-level dentist practitioners give the same quality of dental care as a dentist?

This question is being raised in the Northwest where a Washington state dental practitioner bill passed through the Senate Health Committee.  The Senate version of this legislation moves out of committee and can potentially be considered by the full Senate.

If this bill passes in the Senate, Washington will be the next U.S. state to adopt a mid-level dental provider model to create both dental hygiene practitioners and dental practitioners, who will be supervised (offsite) by a dentist.

These practitioners will be allowed to provide various levels of dental care “pursuant to a written practice plan with a dentist.”

Dental hygiene practitioners would expand the scope of practice of the state’s hygienists, who can now place fillings after a dentist has done the prep work. They would receive specialized training to do extractions, handle medical emergencies, and administer some drugs.

Dental practitioners would be permitted to do everything that hygienists can do except scaling and cleanings. They could also do restorations, administer anesthesia, and extract primary teeth as well as loose permanent teeth (+3 to +4 mobility).

Both types of practitioners could work with offsite supervision if approved by their supervising dentist, but neither could do dental crowns, bridges, or complicated procedures. (Dr Bicuspid)

The Washington Academy of General Dentistry and the Washington State Dental Association oppose this bill siting, “insufficient training for diagnosis and a lack of direct supervision.”

What are your thoughts on mid-level dentist practitioners? Are they bad for dentistry?

For more: Washington Lawmakers Mull Dental Therapist Bills

The Economics of Dental Hygienists

Analyzing Your Hygiene Profit Potential
Editorial by Jim Du Molin

Last week I started talking about dentists and dental hygienists, and how you, the dentist, need to think like a capitalist. The first step in this capitalistic venture is preparing the operatory space for the hygienist – as I mentioned last week, it’s both an investment and a risk, and it’s one you need to consider fully.

Next you need to actually hire a hygienist. Let us assume that the dentist is working four days per week and that 25% of his or her time is spent performing treatments that a hygienist could perform. This means that there is at least one day of potential hygiene production per week.

Let us further assume that based on the dentist’s fee schedule, a hygienist would average $700 per day in production. Collections at 96% would reduce this to $672, from which we have to deduct variable costs (disposable supplies and materials used in treatment), salary, and employer taxes. Our estimated profit before indirect overhead costs is $292 per day.

Daily Gross Profit on Hygiene Production

Production $700
Collections (96%) $672
Minus variable costs (9%) – $63
Minus salary – $288
Minus employer taxes – $29
Profit before indirect costs $292

This is the first level of profit to be realized from hiring the hygienist – direct profit on the hygienist’s production. Adding just one day of hygiene per week provides $1,168 of passive income per month and $14,000 per year.

More importantly, the dentist is now free to use his or her time more productively. Previously, 25% of the dentist’s time (two hours per day) was used to perform hygiene treatments. Let’s say that he or she could bill $88 an hour for those treatments. Now, the dentist can use these two hours to perform more complex and more costly treatments – at, say, $313 per hour. That’s an increase of $225 per hour, or $450 per day.

Assuming that collections are 96%, and variable costs including lab and supplies are 24%, the marginal net profit on the additional production is 72%. Therefore, if daily production increases by $450, the extra net profit will be $324. Remember, that’s $324 everyday. In an average 16-day month, that comes to an additional $5,184 in profit per month.

Adding the dentist’s additional production to the hygienist’s production, the total additional profit is $6,352 ($1,168 + $5,184) per month.
However, there’s more to the story: capitalists have to take risks, and smart capitalists can make lots of money… but I’ll get to that next week!

Alternative Providers of Dental Care (Survey Video)

Alternative providers and dentists: dental survey videoAlternative providers are playing an increasing role in dentistry, with more and more states expanding the roles of alternative or mid-level dental providers.

In our survey, half of dentist respondents said they are concerned about the level of care alternative dental providers can provide. In addition, over half believe that there should be fewer alternative providers than there already are.

On the other hand, 22% of dentists in this survey feel good about mid-level oral health providers and believe that alternative providers increase access to dental care.

Jim Du Molin and Julie Frey discuss what dentists think about dentistry, dental hygienists, and alternative providers:

“There’s no real need for more of these non-dentist providers,” said a Nevada dentist. “If patients and dental insurance valued dental care with proper payment for services, they could use the existing infrastructure of dental availability.”

“We need MORE alternative dental providers to meet the needs of our population. This is the only way we will be able to meet present and future underserved,” said a Connecticut endodontist.

“We’ll need them when there is a public health system to employ them,” said an Illinois Dentist. “Otherwise, dental insurance companies and entrepreneurial dentists will employ them and use them to crush our ability to make a living in private practices.”

Do you have any further thoughts on alternative providers of dentistry and dental care?

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