Is Your Dental Practice Controlling Costs Effectively? Profitability Benchmarks For Dentists

Overhead is getting a bit more of a dentist for a fee. According to the ADA, the average practice profitability of 32.7%. It falls short of what can be. In many offices, high above his head is a persistent problem that goes undiagnosed and unresolved. Often, doctors do not become aware of their overhead numbers until the year is over and the accountant gives a historical overview of the data.

In addition, the average profitability of 32.7%, overhead consumes a whopping 67.3% of all income dental practice brings in. Based on our experience, however, optimized dental practice to achieve and maintain profitability of 45% or more, ceiling with only 55% or less. This is after allowing for education and investment in new equipment.

It is important to know the primary sources of costs in clinical practice, as well as benchmark figures for this category. This allows you to compare your practice with figures from some of the best practice.

facility costs such as rent or mortgage are fixed. After the lease was negotiated, or office building was purchased, there is not much that can be done to change it. So, I will focus on variable costs. Here are some guidelines to help you understand where you May be exceeded.

Overhead Gauges for dentists

with the assumption that there would be no big purchases of equipment (Section 179 cases), here are the three largest contributors to variable costs:

1 Wages and salaries. It is the largest single cost in the dental practice. Here are some benchmark figures for the practice is located in the Northeast U.S.

Regardless of FICA / Medicare, or benefits, the gross salary should be less than 22% of revenues.

All-inclusive total staff remuneration (including FICA / Medicare, bonuses and benefits) should be less than 26% of revenues.

Each hygienist should produce three times her gross salary. Usually this means that every hygienist should generate revenue of at least $ 150/hour. Optimally, it should be $ 172/hour. These are the figures for the year 2009. From what I observed, only 30% of hygienists deliver on this precedent. The rest are weak.

2 Dental supplies. This should be less than 5% of revenues.

3 Dental Labs. Lab costs should be less than 8% of revenues. Use a quality lab that you are comfortable you do not make the mistake of going with a cheaper lab without confirming the quality of their work.

Three Other causes of low profitability

1 Case of acceptance. If, in accordance with these criteria, in practice still not be profitable as it could be due to low case acceptance. If the factor is applied, consider the progress in these areas:

* Relationship building skills
* aggressive Case
* verbal skills for Case
* hygienist Pre-diagnosis
* Financial Presentation at Front Desk
* Use of intra-oral camera so that the patient can see what the dentist sees
* Study models

2 Facility. If you have space, consider adding an additional seat. This is one of the best investments you can make.

2 Facility. If you have space, consider adding an additional seat. This is one of the best investments you can make.

...

Suppose that it costs $ 25,000 to install a chair and the necessary equipment for the new treatment room. It's about $ 425/month for a 5-year loan. At the 16-day month, it takes only increased production of $ 30.00 per day to justify and cover the cost of extra chairs.

...

3 Fees. Low fees can significantly contribute to reduced profitability. Re-state your fees each year, and periodically assess their participation in PPOs. Wrong decisions in this arena tend to profitability is significantly lower than where it could be.

Having regard to these benchmarks and other profitability busters, you should have a clear idea of where lies the potential to reduce costs and increase profitability of your dental practice.