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.

What Makes a Dentist go Bad?

when dentists go badIn recent news, dentist Davinder Singh Jamus failed to effectively sedate a patient as he filed down her teeth at the Kensington Dental Spa clinic in West London, causing her to scream out in agony.

His response was to tell her that, “Nobody screams in my surgery,” while botching her veneer job.

On March 21, the UK General Dental Council listened to story upon story from angry former patients of Dr. Jamus.

When one of the former patients complained about the quality of her dental care, he allegedly told her she had been “very ambitious and naughty.” Apparently he tried to intimidate her into silence by advising that if she tried to take it further he “could guarantee she would lose.”

Jamus is also accused of allegedly fitting one patient with dental crowns to two teeth, instead of providing veneers as agreed, and failing to give another patient enough time to consider treatment before asking for consent while not admitting he had perforated her root canal.

Is this a bad misuse of his position as a medical professional, or an example of a poorly trained dentist?

NHS in the UK saw a 4.4% rise in annual complaints about GP services and dentistry to in 2009 -2010. There are twice as many claims on British dentists as there are on British doctors for poorly done treatment, fraud or excessive fees.

Other complaints are for badly done root canals or broken crowns and bridges.

Some believe the rise in complaints in the UK is due to the rise in the costs of procedures during rough economic times. Davinder Singh Jamus seems to be the exception — not the rule — when it comes to quality dental care.

What are your thoughts on bad dentistry?

For more on the Jamus dental story, see: The Daily Mail.

Dental Office Embezzlement of $100,000 in Dental Insurance Payments

Dental Office Embezzlement of $100,000 in Dental Insurance PaymentsDental office embezzlement is still alive and well in California.

Deborah Lynn Kessler, 45, pleaded guilty to four counts of grand theft over charges that she embezzled more than $100,000 in dental insurance payments at the dental practice where where was manager.

The Orange County Register reports that Kessler signed dental insurance payments over to her personal bank accounts over the course of about three years. Investigators initially said she may have used the money to pay for an RV, boats and trips, and to cover her personal bills.

She was sentenced to two years in jail, plus an additional two more years of community supervision.

According to a 2010 Association of Certified Fraud Examiners report almost one-fourth of all embezzlement cases report losses of at least $1 million with smaller businesses being the most susceptible to fraud.

The average embezzlement scheme lasts for 18 months before detection.

The U.S Chamber of Commerce estimates that employee embezzlement costs American companies $20 billion to $40 billion a year. A long-term employee is 15 times more likely than a stranger to steal from a company.

Some of the best ways to prevent dental office embezzlement is by implementing a segregation of duties, keeping petty cash to a minimum and requiring dual signatures on checks.

Has your dental practice ever been the victim of employee embezzlement? What happened, and how did you handle it?

For more on the Orange County Register story see: Dental worker guilty of stealing more than $100,000

Why Dental Insurance Can Be Aggravating for Dentists (video)

Why Dental Insurance Can Be Aggravating for Dentists (video)Many dentists feel that dental insurance is the bane of their existence.

Dentists often say that dealing with dental insurance is one of the most complicated aspects of dental practice management.

In fact, most dental patients have little understanding of how their dental insurance coverage actually works.  The intricacies of dental insurance and the lack of sufficient instruction provided by some insurance companies make it almost impossible for some dental patients to properly understand their dental insurance benefits.

This creates a widening divide between patients’ expectations of their dentist’s fees and what their the actual dental insurance coverage provides.

As one prosthodontist complained in a The Wealthy Dentist Survey on dental insurance, “My patients demand that I accept insurance assignments. At first I refused, but I lost more than half of my dental patients to other practitioners accepting insurance.”

The Wealthy Dentist survey asked dentists if they see dental insurance as friend or foe.

Not all dentists who responded to the survey see dealing with dental insurance as all bad.

“Patients with dental insurance coverage are much more likely to agree to a treatment plan,” responded one dentist.

To hear what dentists had to say about dealing with dental insurance, Click on play to watch the following video —

What are your thoughts on dealing with dental insurance?

Dental Practice Management and Retirement Planning (Survey Video)

Dentists and retirement planning

Planning for retirement is an important aspect of dental practice management. Many doctors in their 50’s and 60’s did a good job of that over the years. But the economy derailed many of their plans.

This Wealthy Dentist survey asked dentists for their thoughts about retiring from their dental practices, and if their retirement plans have changed for economic reasons.

Only 30% of the dentists in this survey reported that they are still on their planned retirement track.

Jim Du Molin and Julie Frey discuss how the economy has changed dentists’ retirement plans:

“There is no retirement in dentistry anymore… All the older guys are going back to work part-time.” New Jersey Dentist, 60’s

“I love what I do, and I am still excellent at the dentistry I provide, so here is how my plans have changed: I WILL KEEP GOING AS LONG AS MY HEALTH DICTATES!” California Dentist, 70’s

“Start early, plan for the worst and don’t count on money you may get from sale of practice,” advised a Missouri dentist. “If you do plan to sell your business, start a good dental marketing plan to double the patient base for the new dentist.”

What are your plans for retiring from your dental practice? How has the economy during the past 5 years affected your retirement plans?

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