$100,000 net from hygiene?
Are you sitting on a vast acreage of diamonds? Don't dismiss the hygiene operatory as a potential diamond mine simply because you think "she's too expensive."
by John A. Wilde, DDS
Are you sitting on a vast acreage of diamonds? Don't dismiss the hygiene operatory as a potential diamond mine simply because you think "she's too expensive." Do some number-crunching. You might be surprised!
Earl Nightingale, a motivational speaker who had a voice that once must have belonged to Moses, loved to tell the famous story of the "Acres of Diamonds." It concerns an African farmer who sold his land to wander the continent in search of precious stones and instant wealth. After years of fruitless struggle - broke, starving, and in despair - he hurled himself into a river and drowned. Meanwhile, one of the richest diamond depositories was discovered on the very farm he had sold. The man had literally lived atop acres of diamonds, but, because he lacked critical knowledge and awareness, the great wealth was beyond his grasp. The point of this legend is that many of us possess "acres of diamonds" in our own lives. We are unaware of them, and fail to employ and enjoy them.
This situation is too true when it comes to hygiene services offered in a majority of dental offices. So much energy and interest are focused on new technical wonders, yet no area of dentistry squanders potential profit so routinely and systematically as do far too many practices' hygiene departments. But within this vast waste lies astounding potential for achievement. Ancient wisdom advises that where one stumbles, there lies his or her treasure.
Some statistics below portray the current norm for dental hygiene. We will then compare these facts to what my practice has accomplished for many years. The difference between the two sets of figures should illustrate convincingly the wasted "acres of diamonds" upon which too many dentists uncomfortably slumber.
I'll also make suggestions to aid the motivated in retrieving this treasure. Before we start, I will note that I'm sure many practices dwarf my humble, rural office's hygiene achievements. Obviously, I can't write about them, since I'm not privy to their business data.
The expansion in hygiene
Our practice evolved into expanded hygiene about 15 years ago. This system requires one hygienist, two rooms, and an assistant dedicated to nothing but hygiene. The day we switched to expanded hygiene, our productivity increased 50 percent, and the average number of patients treated daily jumped from eight to 12!
About a dozen years ago, we began to compensate our hygienist based on percentage of production. We subscribed to the startling theory that people will work harder if they can make more money. The day we restructured our compensation mechanism, we added an additional 25 percent to production, on top of the 50 percent increase already garnered by our change to expanded hygiene.
No office can realize maximum practice potential without ideal hygiene. For those driven to achieve this potential, exact details of the mechanisms involved in expanded hygiene are explained in my soon-to-be-released book, Profitable Dental Hygiene.
It is critical to establish that expanded hygiene enhances the quality of patients' experiences - the foundation of long-term practice success. Before we took this direction, our hygienist spent roughly an hour with each patient. Today, two staff members treat an average of 12 patients daily. Each client receives approximately 80 minutes of staff time. (16 total hours of care - eight hours from two staff members - which is divided among 12 patients (16/12=1 1/3 hours per patient.)
This extra attention leads to enhanced educational opportunities, more effective relationship building, fewer failed or cancelled recare appointments, a greater increase in case acceptance, plus an augmented number and quality of referrals. ("At my dentist's office, they take their time. I never feel rushed, and they always answer all my questions!") Feel free to estimate by what dollar value you believe this additional level of service may reward you.
Expanded hygiene is an extraordinary practice builder, but let's examine the figures. During 1999, my hygienist, the lovely and talented Melissa Lannery, RDH, produced an average of $133 per hour. Thus, a single hygienist, working an eight-hour day, generated a daily production of $1,064 (8 x $133). If patients were seen a conservative 200 days annually, total hygiene production would be $212,800 (200 x $1,064) per hygienist.
But I don't work that hard. Our actual 1999 totals were 163 eight-hour days of hygiene worked and $173,270 produced. Chances are your practice saw patients for more than our somewhat modest 163 days a year. Multiply your days of hygiene care provided, times our average production of $1,064 per day to consider how our results compare to your current hygiene production. It will also prove enlightening to compare your and our results to published national standards.
According to an article in the May 1998 issue of Dental Economics, the average hygienist produced $6,835 per month or $82,000 per year. Dental Economics didn't break these numbers down any further. But if we assume a 40-hour week, this calculates out to $43 per hour. Melissa produced at a rate ($133) approximately triple this hourly level!
I hope you are motivated by the realization that if such production can be achieved in our modest country practice in Keokuk, Iowa, it is possible in your office also, even if you toil in such backwaters as New York City or San Francisco!
Production's nice, but what's the net?
However, the bold title of this article focuses not on productivity, but net - so let's examine overhead. Your hygienist will probably wish to be paid for her services. Let's proceed by assuming you are at least considering my suggestion to establish hygiene compensation based on a percentage of production.
Depending on the availability of hygienists in your practice area (the law of supply and demand has not been repealed), let's speculate a range of remuneration from $26.60 (20 percent of $133 per-hour production) to $43.89 (33 percent of $133 per-hour production).
These salary ranges are not suggestions. Enough people are already mad at me. They are merely hypothetical numbers used for illustrative purposes. The October 2000 issue of RDH magazine stated that the average hygiene salary for 1999 was $26 per hour, so our figures are higher than average. Employing lower salary estimates, of couse, would increase the final net figures.
A hygiene assistant is an entry-level position in our office, requiring outstanding people skills more than dental experience and expertise. (However, hygiene assistants are capable of significant production in their own right, as detailed in my book.) Let's assume the beginning salary range for this team member varies from $7 to $10 per hour, depending on the average pay in a particular geographic area.
The October 2000 issue of RDH also listed the top reported hygienist salary as $135,000 per year. It's a big, wide, wonderful - if scary - world we live in! I realize practioners on either coast, or in major metropolitan areas, may have to increase my overhead numbers to make them applicable to their situation. I can only relate my experience, and do so while thanking God I practiced in an area where overhead and living expenses are relatively modest.
The rest of the overhead story
You must also factor in currency outlay in addition to salary - a difficult figure to precisely define for hygiene. But in our low-overhead, highly efficient office (our group practice averaged a 48 percent true overhead over the last three years), this totals approximates $18 for every hour of hygiene care.
This $18 overhead beyond salary is my best educated guess. I arrived at this figure by noting that hygiene produced about 25 percent of our total office revenue. The often-stated goal for hygiene is 33 percent of total practice production. Melissa, however, had to compete with up to three dentists! I assumed 25 percent of rent, phone, utilities, janitorial, and front-office salary was dedicated to hygiene's behalf.
The expense of the hygiene assistant was calculated along with the total expenses for typical hygiene supplies (gloves, prophy paste, disposable prophy heads, fluoride and trays, toothbrushes, floss, etc.) for a six-month period. We then doubled this figure to estimate annual total dollars of hygiene supply expenses. Adding all of the above-listed categories results in total hygiene nonsalary expenses. I divided this figure by the number of hours hygiene saw patients during the year reviewed to reach the $18 hourly estimate. Again, this number wasn't retrieved off a mountain, etched in stone, but is my best informed estimate.
We now have established a low range of $26.60 (hygienist's salary), $7 (assistant's salary), and $18 (nonsalary overhead) for a total of $51.60 of overhead per hour. The high range referred to above is $43.89 (hygienist's salary), $10 (assistant's salary), and $18 (nonsalary overhead) for a total of $71.89 of overhead per hour.
If the per-hour production is $133, this leaves the practice with a remaining hygiene profit range of $61.11 (subtracting the high range of hygiene overhead, $71.89, from $133) to $81.40 (subtracting the low range of hygiene overhead, $51.60, from $133) per hour.
Making it personal
Remember, though, that we calculated from the Dental Economics figures that the average hygiene production (not net profit) was $43 per hour. But general statistics serve only as guidelines. To make these figures personally relevant, you must calculate your employee's average hourly hygiene production. This is a primary figure in practice profitability, but one which few dentists can even venture a close estimate. Be a businessperson and perform this simple calculation. In knowledge lies power.
Based on 200 eight-hour days, we're discussing an annual net profit ranging from $98,000 (200 days x 8 hours x $61.11 net/hour) to $130,240 (200 days x 8 hours x $81.40 net/hour occurring from hygiene alone!
Melissa is paid 20.1 percent of production. This is near the low end of our scale, but still almost double her hourly salary before coming to our office. Her assistant's salary is $8 per hour, so our office net figures are almost at the highest end of our profitability scale of $81.40 per hour. For 163 days worked, at $81.40 net per hour, my best possible guesstimate of our actual hygiene net profit was $106,500 ($81.40 per hour x 8 hours x 163 days) for 1999.
If this illustration of $98,000 to $130,240 profit from a single hygienist's production alone has failed to excite you, take a pulse! Many dentists struggle to make such an income from their entire practice. The awareness of such vast potential - at least several feet of diamonds - may be sufficient motivation for some to pick up a pencil and begin a journey to hygiene excellence by first determining their exact current performance.
A practice can personalize this data by repeating my overhead computations with figures from the practice to determine:
- One's current profit or loss from hygiene.
- The as yet untapped potential - at minimum, the distance between your net and ours - that exists with expanded hygiene.
I despise waste, and most offices squander enough potential profit in hygiene alone to easily and fully fund their pension plan for the entire team every year. In my 30-some years of practice, I have yet to discover a hygienist incapable of offering fine care when provided with effective systems, proper equipment, motivated by significant financial rewards, and valued and supported by a team that realizes periodontal health is the foundation upon which all successful dentistry resides. But hygienists require the leadership and support of an understanding dentist to create an environment in which they may thrive.
Begin by sharing this information with your hygienists. Obtain their enthusiastic support to achieve maximum hygiene potential. This should not be an obstacle, as the advantages inherent in our program for hygienists are obvious and numerous.
The system I've briefly outlined will increase time spent with every patient. The quality of service is improved. The clients' level of satisfaction is boosted. Unproductive hygiene downtime is minimized, while case acceptance and referrals are enhanced.
Elevating practice productivity will allow dentists to significantly increase hygiene remuneration, while also enjoying greater net profit. (Only the most imprudent of businesspersons would object to paying more salary, if they, in return, enjoy greater revenue. I'd be delighted to pay Melissa $100 per hour, because it would mean she was producing $500 per hour.)
Working conditions also will be enhanced, since the finest equipment now will be easily affordable for highly profitable hygiene. This allows the creation of state-of-the-art facilities. The aid of an assistant relieves hygienists of much of the drudgery inherent in providing their care (OHI, flossing, exposing and developing X-rays, scrubbing and sterilizing instruments, etc. - these tasks are only fun during the first 10,000 times.) while providing a totally supportive teammate.
Happy patients, happy hygienists, and happy dentists create a wonderful environment for the entire team. In such a joyful place, achieving excellence and reaping the commensurate financial rewards that distinctive service deserves, becomes much easier.