Dental Hygienists: Further Economic Considerations

Comparing Hygienists and Associates
Editorial by Jim Du Molin

Four out of five dentists in a recent Wealthy Dentist survey report paying their dental hygienists a salary or base hourly wage rather than on commission. It’s an important economic consideration for any dentist.

When setting compensation structures or assigning available operatory space, it is useful to analyze the relative profitability of the individual producers in the practice. The chart below begins by analyzing one dentist’s profit on his two hygienists, Mary and Tim, after direct costs (labor and treatment supplies) but before general overhead costs such as rent and office administration.

Comparative Value of One Day’s Production

Hygienists Mary Tim
(Commission) (Salary)
Production $700 $700
Collections (96%) 672 672
..Less: variable costs (9%) – 63 – 63
..Less: labor
…..commission (45%) – 288 n/a
…..salary n/a – 288
…..employer taxes (10%) – 29 – 29
Profit $292 $292

In the example, Mary is paid on commission (45% of production), whereas Tim is paid a flat daily salary of $288. At current production levels, the dentist realizes about the same amount of profit on each, $292 per day.

As production increases, Tim will become increasingly more profitable than Mary. The dentist’s profit on Mary will always be 36% of whatever amount she produces, as a result of the commission structure.

Measuring Profits

Profit margin on: Mary Tim
Collections 96% 96%
Less: variable costs – 9% – 9%
Less: commission – 41% n/a
Less: employer taxes – 10% n/a
Profit 36% 87%

However, for each additional dollar that Tim produces, the dentist’s profit will be 87% – over twice as much! This is because once Tim’s salary is paid, there is no further labor cost for that day.

Suppose the dentist has a goal to increase profit in the practice by $1,000 per month, or $58 per day. Mary would have to produce an extra $161 ($58 divided by 36%) to generate the $58 profit; Tim would only have to produce an extra $67.

The majority of the practices that we see have a goal of increasing profit. For the most part, this means that production must increase. Clearly, the dentist in this situation wants to convert his hygiene department to a salaried basis. That way, the doctor will net more profit on each additional dollar produced.

The conversion from commission basis to salary basis, together with the setting of the higher goals, can be structured as a “Win-Win” situation that benefits both the hygienists and the dentist.

Let’s assume that the dentist has already determined that in order to meet the practice’s goals, hygiene production has to equal $962 per day. (We have repeatedly seen practices increase hygiene production from levels of $700 per day to $1,000 or more per day.)

An equitable, Win-Win compensation alternative that meets the dentist’s goal and motivates the hygienists could look like the following:

Step 1: Effective immediately, both hygienists are placed on salary at $288 per day.

Step 2: The new production goal is $962 per hygienist per day, with advanced training to be provided.

Step 3: When each hygienist achieves an average production level equal to the new goal for one month, then he or she will earn a one-time increase in base salary of $25 per day, for a total of $313.

Increasing Daily Hygiene Production to $962… plus:

Tim (Salary) Goal Increase
Production 700 962 262
Collections (96%) 672 924 252
Less:
…variable costs (9%) – 63 – 87 24
…commission (41%) n/a n/a
…salary – 288 – 313 25
…employer taxes (10%) – 29 – 31 3
Profit per Day 292 493 200

Under this proposal, neither hygienist experiences a reduction in current income due to the conversion from commission to salary. However, they do obtain the potential for realizing significantly higher levels of income, and the doctor increases his or her profit by $200 per hygienist a day. This is achieved through a combination of advanced clinical training and a bonus system that motivates the entire office staff to achieve ever-higher levels of production.

Next week I’ll discuss the economic differences between hygienists and dental associates.

Dentist Boasts Patients Travel 4 Hours for His Dental Treatments (video)

dental patient travel distanceAn implantologist boasts that many of his dental patients travel up to four hours by car for their dental treatments at his practice. However, as surprising as it might seem, it is not unusual for dental patients to travel hundreds of miles to see their favorite dentist.

The Wealthy Dentist conducted a survey that asked dentists how far some of their dental patients travel for an appointment at their practice.

Dentists responded that many of their patients travel five to ten miles, but others continue to see them after moving hundreds, or even thousands of miles away.

Click on Play to hear what dentists had to say about patients who travel for their dental appointments –

Not surprisingly, rural patients travel farther to see a dentist than do urban residents.

“Some patients will travel 30+ miles,” wrote a rural dentist, “and then there is the fellow who comes twice a year from the Netherlands…”

Dentists Say Electric Toothbrush No Better Than Manual Toothbrush

No Better Than Manual Toothbrush

Is the electric toothbrush all hype?

The NZ Herald surveyed a group of independent dentists and found that many dentists are uncomfortable with their profession’s relationship with some dental products and their marketing companies.

One product endorsement that seemed to bother the dentists the most is in the area of electronic toothbrushes.

According to the Herald, dentists were split 50-50 about whether an electric toothbrush gave a better clean. The dentists who support manual toothbrushes felt that brushing is about how well someone brushes — not the toothpaste or toothbrush used.

In other words, any type of toothbrush is only as good as the person who is using it.  Overall, many dentists felt there wasn’t a bigger advantage to using one type of toothbrush over another.

So why endorse the more expensive electric toothbrush?

Some dentists feel product endorsements arise from the close relationships between dental associations and dental product manufacturers.  In the Herald survey, several dentists broke ranks with the professional associations – one of which receives sponsorship from Oral-B – to speak out and say that the clean provided by an electric toothbrush is no better than a manual toothbrush.

Both the New Zealand Dental Association and the New Zealand Dental Therapists Association declined to comment on the survey.

What do you say?  What type of toothbrush do you advise your patients to use?

For more on this story read: Electric brush: tooth or fiction

Confrontation Is Not the Way to Deal with a Thieving Employee

What to Do When You’ve Discovered an Embezzlement

Editorial
by Jim Du Molin

Now, finally, what to do when you think you are being embezzled by an employee? For reasons I do not want to discuss in a public forum, it is important that you DO NOT IMMEDIATELY CONFRONT THE SUSPECT with your concerns or evidence.

Step back, take a deep breath, and call your accountant. Discuss your concerns. Set up a meeting to review what you have found. If your accountant believes there is enough smoke to proceed, do an audit. But do it privately, after hours. Do not let the suspect or ANY other employees know that you have a concern.

Your main goal is not to be accused by the suspect of defamation! This is a common tactic of embezzlers. Once you have proof of the problem, you have two choices. Your path will depend on the size of the embezzlement. In either case retain an attorney to review your options.

If the amount is under $10,000, terminate the employee without getting into ANY discussion of your proof or suspicions. If you are in an “At Will” state, you don’t have to even give a reason. Just say that you “don’t feel the two of you are on the same page” and you are letting him or her go. Again, consult your attorney.

I know that this advice will frustrate many of you reading this. Yes, you may end up paying unemployment costs, but in the long run, it is worth it. The reality is that this is the least expensive, least stressful and least time-consuming approach to the problem. I have been through this many times with many doctors who wanted to crucify the suspect and run him out of town on a rail all the way to the penitentiary. The reality of that happening is nil, and your chances of getting any money back are less than 10%.

I know it’s hard advice to hear… but it is the most valuable tip I can give you.

Tooth Whitening Wars in North Carolina: Is Your State Next?

The FTC and Teeth Whitening Wars in North CarolinaIn North Carolina, tooth-whitening services can be administered by non-dentists in hair salons, retail stores, and at kiosks in shopping malls.

And the FTC in North Carolina believes a dentist doesn’t need to be present.

In 2010 the North Carolina State Board of Dental Examiners attempted to reign in the non-dentists by sending out 42 letters notifying tooth-whitening providers that they were illegally practicing dentistry and ordered them to stop.

As reported by DrBicuspid.com, the U.S. Federal Trade Commission (FTC) then initiated an action against the North Carolina dental board, alleging that the board violated federal law in their attempts to block non-dentists from providing tooth-whitening services.

In February 2011, the dental board retaliated by filing a lawsuit against the FTC, accusing the commission of violating the U.S. Constitution in its attempts to keep the North Carolina State Board of Dental Examiners from regulating tooth-whitening services being offered by non-dentists.

A FTC judge fired back by denying the dental board’s motion to dismiss the FTC’s complaint and unanimously rejected the argument that the state action doctrine exempts it from antitrust scrutiny under the Federal Trade Commission Act.

The FTC judge further ruled that the North Carolina State Dental board’s efforts to block non-dentists from dispensing whitening services constitutes an illegal anti-competitive conspiracy.

In an email to DrBicuspid.com, Board attorney Noel Allen writes, “If a clear state statute, a century of court precedents, and the United States Constitution no longer allow the state of North Carolina, acting through its General Assembly, to define the practice of dentistry to protect our citizens from the illegal and unsafe practice of dentistry, then it should be the Congress or the U.S. Supreme Court that pronounces the death of that state right. The decision should not come from the FTC acting on its own initiative, without even so much as internal rule to support it.”

The North Carolina State Dental Board argues that they never tried to stifle competition and were only trying to protect the public from non-licensed dental treatments.

The battle between dentists and teeth-whitening providers is being fought in other states as well. Recently the Connecticut State Dental Commission ruled that tooth whitening is dentistry and can no longer be performed without a dentist present, while another judge ruled against the New Jersey Dental Association in their legal battle against a chain of tanning salons offering tooth-whitening services.

What are your thoughts? Do you think tooth-whitening services require a dental license?

For the entire story by DrBicuspid.com see: FTC Judge Rules That NC Dental Board Acted Illegally

Disclaimer

© 2017, The Wealthy Dentist - Dental Marketing - All Rights Reserved - Dental Website Marketing Site Map

The Wealthy Dentist® - Contact by email - Privacy Policy

P.O. Box 1220, Tiburon, CA 94920

The material on this website is offered in conjunction with MasterPlan Alliance.

Copyright 2017 Du Molin & Du Molin, Inc. All rights reserved. If you would like to use material from this site, our reports, articles, training programs
or tutorials for use in any printed or electronic media, please ask permission first by email.