Most Dentists Pay Their Dental Hygienists by the Hour (video)

Most Dentists Pay Their Dental Hygienists by the Hour (video)In this survey, we asked dentists if they pay their hygienists an hourly wage, or if compensation is based on commission.

Four out of five dentist report paying hygienists a base hourly wage.

Only 19% say their hygienists are paid on commission.

Read more: Paying Dental Hygiene Staff Not a Dentist’s Most Fun Job

Dental Offices Most Profitable Businesses…?

A new study released by Sageworks finds that dental offices had the highest net profit margin of any category of private business in 2008. (This may come as news to many of you whose dental practices are struggling in the current economy!) The study found dentists’ offices had a profit margin of nearly 17%.

According to the Sageworks study, these were the most profitable industries in 2008:

  1. Offices of dentists (17% net profit margin)
  2. Accounting, tax preparation, bookkeeping and payroll services (16% net profit margin)
  3. Legal services (13% net profit margin)
  4. Offices of other health practitioners (12% net profit margin)
  5. Support activities for mining (11.9% net profit margin)
  6. Offices of physicians (11.9% net profit margin)
  7. Outpatient care centers (11.5% net profit margin)

It’s hard not to notice that half of these are related to health care. Looking at this data, a consumer might reasonably assume that health care costs have increased so that health professional can keep a healthy profit for themselves. But is that really true?

I can’t help but wonder how Sageworks compiles their data. They’re only looking at privately-held companies. Are dental offices really that profitable, or are these statistics misleading?

Economy Hitting You Hard? Jim Du Molin Offers Advice

cash moneyThree ways to make money in the current economic pit of despair. For over 20 years, we’ve worked with dentists, one-on-one, on both the practice and the personal financial side. My wife Suzanne is a personal financial genius, and she has the merit badges to prove it.

This is not rocket science. It’s solely based on over 20 years of financial planning advice she has given to dentists, many of whom are now fat and happily retired. Mixed with that is my 40 years of personal experience watching economic cycles.

Let’s be clear: These are just my own thoughts and opinions, not guaranteed financial advice. In other words, take all this with grain of salt.

First money maker: Buy stocks at below 8,500 on the Dow. The market has been testing bottom for the last two weeks. Every time it approaches or hits 8,000, it bounces up as the “Professionals” buy in. It is impossible to time a market buy at the very bottom. Don’t worry about it. Just be prepared to hold the stocks for at least three to five years.

Will the market go lower than 8,000? Quite possibly. So what? The market will rebound… eventually. This economic situation is not a 9/11 event. It is a media-driven panic that is the result of a too-complex set of financial interactions. The real problem is that no one in government understands or has the intellectual capability to regulate it a meaningful way. But I digress…

Second money maker: If you absolutely need cash for immediate needs, cash that is currently tied up in a losing stock portfolio (think kids’ college education costs), don’t panic: there may be a significant market bounce immediately following the presidential election. This has happened before, with reasonable consistency.

It makes no difference who wins. Neither candidate will have any power over the economy. But hope springs eternal in America’s cultural heart.

If this scenario comes to be, don’t expect to be made whole. If your back is really against the wall, half a loaf is just fine. Sell the biggest gainers at a Dow of 10,000… if such a blessing should come to pass.

Third money maker: Buy gold and/or silver. Do not exceed 10% of your investment portfolio. Gold has dropped over $200 an ounce in the last few weeks. It is a relatively good buy. Gold coins are in extremely short supply. Gold bars are still available.

Silver is currently undervalued. It is also hard to store. Think big and heavy.

Why am I saying this? Just one word – INFLATION! Remember the 1980’s under Jimmy Carter? His Nobel Prize was not for economics. The government admitted to 12-14% annual inflation. Real inflation was closer to 18-20%!

Let’s start counting up government spending:

  1. A $50 billion economic stimulus package earlier this year. I’m still waiting for my tax refund check.
  2. A $700 billion Wall Street and banking bailout, plus another $150 billion in earmarks to bribe the appropriate congressmen.
  3. A second $300 billion is now in the works for immediate passage after the election.

Where did this Trillion-Plus Dollars come from? Government printing presses. We are already at an annualized inflation rate of 4.9% for this year. In about 18 months, these chickens will be fully hatched and running.

Gold reached $900 in the 80’s under Jimmy C. It has an inflation-adjusted value today of close to $2,000. However, it is still trading in a range of $730 to $950. Are you getting the picture?

Next week I will start to discuss how all of this will affect your dental practice. In the meantime, feel free to comment on this in the blog. However, don’t expect me to be answering questions or arguing points. The market is at 8,378 as I write this. I’m going to be buying stocks that have fallen below their corporate liquidation value.

Oh! And there’s one more small reason to buy metals. If there should be a major international incident (like the Israelis taking out Iran’s nuke program), gold and silver will spike. Sell gold at anything approaching $1,000. Don’t get greedy and try to time the high point. Sell and buy back when it readjusts to the 700’s. See you next week.

What Does the Economy Mean for Your Dental Practice?

Is Dentistry Going Down The Tubes? Our latest survey tells us that at least 40% of the profession is seeing a major downturn in new patients and case acceptance. We have talked about this before.

Currently dentistry is caught in a three part downward spiral. Each part is conspiring to make your business just a little slower…

The first spiral is the presidential election cycle. Every four years, people postpone making decisions about just about anything, including dentistry, until they see who is going to win next presidential election. This is not rational. People are just anxious about change.

The second spiral is the mortgage debacle and the resulting meltdown on Wall Street. There have been about 1,300,000 mortgage defaults so far, and another 1,000,000 are expected in the next year. Once again, people are unsure about the future. They do not want to make major decisions about dentistry or anything else until they feel more secure.

The final downward spiral is the recession. Dentistry is always the bell cow for economic downturns. We saw this coming last November when searches on the Internet for key dental terms (cosmetics, implants, etc.) started to drop dramatically. The recession is here.

The good news is that the election will be decided within the next two weeks. People will begin to adjust to the fact that the winner may not be the anti-Christ they had been lead to believe. The Washington political pendulum will continue to swing, and the bureaucrats will still control most of what goes on.

The bad news is that that we are still left with the mortgage collapse, which will run through until the third quarter of next year, and the recession, which could last through all of 2009.

Now that I’ve made your day, there are steps you can take to safeguard your practice and personal financial security. I will continue with those in next week’s newsletter.

Jim

High Cost of Dentistry Can Prove Disastrous

What Your Patients Are Reading

There are all kinds of reasons why it’s important to have an emergency fund (even if you’re young and poor).

A recent article in US News & World Report highlights another reason to have emergency money: unexpected dental work.

A 24-year-old student from New York recounted how she discovered the root canal she needed would cost over $1500 (even with her dental insurance.) Needless to say, she didn’t have the money. So she went to Capital One for financing instead.

Read more

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