hygienists Archives - The Wealthy Dentist

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!

Dental Associates vs. Hygienists: Who’s More Profitable?

Examine the Bottom Line When Considering a Hygienist and/or Associate
Editorial by Jim Du Molin

Have you ever wondered what your real profit is on your hygienists or dental associates? Have you ever wondered whether a hygienist can be more profitable to you than an associate? If you have an extra operatory available, would it be more profitable to hire a dental associate or another hygienist?

In last week’s column, I explained how you can earn a profit of $493 per day from a hygienist who produces $962. How much would an associate have to produce to yield the same profit? Here again, the Comparative Value Analysis is helpful.

Comparative Value of One Day’s Production

Provider: — Hygienists — Associate
Mary Tim Goal Equiv.
(Commission) (Salary) (Per op)
Production $700 $700 $962 $1,176
Collections (96%) 672 672 924 1,129
Less…variable costs (9%) – 63 – 63 – 87 – 106
…commission (41%) – 288 n/a – 482
…salary n/a – 288 – 313 n/a
…employer taxes (10%) – 29 – 29 – 31 – 48
Profit $292 $292 $493 $493

Let’s assume that you would pay the dental associate 41% of his or her production. (In reality, we normally recommend that the associate be paid a percentage of his collections. However, we will keep things simple here.)

Further assume that the associate would pay his or her own lab fees and assistant, and that you would not have to add any front desk staff to handle the associate’s patients and scheduling.

Your net profit rate on the associate would be as follows:

Net Profit Rate on Associate

Collections 96%
Less: variable costs – 9%
Less: commission – 41%
Less: payroll taxes – 10%
Profit 36%

The associate would have to produce $1,176 per operatory used to give you the same profit as a hygienist. If the dental associate used two operatories, he or she would have to produce $2,352 per day to be as profitable as hygiene would be in those same operatories.

In our experience, it is easier to bring hygiene production up to $960 per day than it is to find a dental associate capable of consistently producing $1,176 in each operatory, or $2,352 in two operatories. Also, the associate must have a sufficient flow of patients to make this production level possible.

When structuring both hygiene and associate compensation, we advise that you compare what the hygienist or associate is earning on the relationship, compared to what the senior dentist is earning. The relative compensation levels should reflect a fair distribution based on the parties’ investments of time, energy, and financial risk.

For help in increasing hygiene production, a key element to increasing doctor profitability, contact J.P. Consultants or Advance Hygiene Concepts.

Hygiene Clinics: Without Dentists, Hygienists Have No Profit

In this survey, we asked dentists if they had ever seen a successful, private, independent dental hygiene clinic. Only 2% said they knew of a successful one.

But why is that? We found that 76% of dentists think it’s not a profitable business model, whereas 22% think hygiene practitioners’ hands are tied by state laws.

Dental hygiene clinics seem to fail, because dental hygienists need dentists and dental practices to be most profitable. At least, that’s what our dentist respondents seemed to think…

  • “Dental hygiene clinics are bad for the public, good for hygienists. How much more are we willing to give up? We are health care providers. not just a good business model!” (New York prosthodontist)
  • “Financially, I don’t see how it could pay for itself.” (California dentist)
  • “The whole concept is flawed. They cannot diagnose and read X-rays, and this will definitely lower the standard of care. It will also make it cost more since the doc will have to charge more to do dental exams.” (Connecticut dentist)
  • “Will they subcontract a DDS to come in to do exams at $200 an hour?”(Alaska dental office manager)
  • “A hygienist is an invaluable team member due to close and continuous communication, which is not able to happen in remote hygiene settings.” (California dentist)

Read more: Are Successful Dental Hygiene Clinics a Myth?

Dental Hygienists’ Compensation (video)

Hygienist pay ratesDentists report the average dental hygienist base hourly pay is $36 an hour, starting at under $20 an hour and extending past $50 an hour.

“They get paid too much for what little they do,” complained a New York orthodontist paying his dental hygienist $27 per hour.

Another dentist – one paying $55 an hour – disagreed about the value of dental hygiene. “She’s worth every penny. She makes me a fortune.”

Read more about dental hygienistsDentists: What do you pay your dental hygienists?

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

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.