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Calculating your teledentistry ROI

May 1, 2021
I've you've adopted teledentistry, do you know your return on investment? It can be tricky to calculate, but this dentist supplies some easy formulas to get you started.

The adoption of teledentistry increased dramatically last year. This was accelerated by the COVID-19 pandemic and the cancellation of in-person office visits for two months, an increased use of video conferencing by consumers, and new advances in streamlined cloud technology.  

These factors were catalysts not only for teledentistry adoption, but for that of telehealth, telemedicine, and tele-education. We now live in a tele-enabled world. What’s more, long after most Americans receive their vaccinations and our society develops herd immunity, teledentistry may likely become standard operating procedure in dental offices.

This is because consumers now expect your office to have a teledentistry platform that is secure and HIPAA-compliant and not just a video conference call. By now, you have probably discovered the limits of electronic dental records (EDRs) in recording what your patients ask regarding diagnosis and treatment concerns. Adding a text input option is not enough!

A comprehensive teledentistry platform, such as TeleDent by MouthWatch, is one way to securely obtain an accurate record of patient-provider conversations. Your discussions with patients about their oral health needs and what you observe and how both of these can be addressed with a treatment plan can now be attached virtually to your EDRs.

With teledentistry, screening emergency patients is simple. But the true value is the ability of patients to schedule virtual exams to fit their schedules, and for providers to connect and communicate with patients without requiring personal protective equipment (PPE). Thanks to these advantages, teledentistry can be used for virtual intake, hygiene, consultation, post-hygiene, and post-treatment checks.

Despite these advantages, some practices are still struggling to determine the best way to use teledentistry. To them I say that successful teledentistry implementation is not one-size-fits-all. It requires a customized approach to best fit your practice.

What does my crystal ball say about the post-pandemic dental experience? It says that initial virtual patient exams will ultimately become the dental experience norm before patients come into the practice, creating a new connected patient experience on a schedule that suits them, which is what they prefer. That connection will happen virtually not just because of the barrier of additional PPE, but also because patients/consumers are going to do a better job of researching their needs virtually.

To keep up with a growing legion of educated consumers, you will need to extend your virtual footprint, starting with teledentistry. If you don’t, your prospective patients will interview the next dentist virtually to meet their oral care needs, synchronously or asynchronously.

Aysynchronous teledentistry can be used by patients after office hours. Then, patients’ teledental visits can be stored, and you can review them later and send patients messages. After your reviews, patients receive notifications with your recorded video teledentistry, just like with synchronous teledentistry, and they can review when it’s convenient for them. Patients like this feature to accommodate their schedules, and it can also be attached to the EDRs.   

So, how do you know when to invest in teledentistry? We have always conducted a return on investment (ROI) analysis for major purchases, and we recently completed one for teledentistry. I will share our specific ROI analysis formula for TeleDent here.  

Do the teledentistry ROI math

How do you know if teledentistry is a good investment for your practice? This equation will help you figure this out. We used simply profit minus costs (net profit), divided by your total costs:

              Y  –  X  x 100 =    ___  % ROI

                  X

X = your annual cost for teledentistry. Depending on how many licenses you purchase, this will determine your annual cost (fixed cost).

Y = your annual gross profit. This is your hourly reimbursement for a teledentistry visit times the yearly teledentistry hours scheduled for the dentist or hygienist.   

Example: Every practice is different, but in ours, for one dentist, two hygienists, a periodontist, orthodontist, and oral surgeon, the fixed annual cost breakdown is as follows:

  • TeleDent two-user annual licenses: $109 per month = $1,308 for the dentist and hygienist.
  • Four additional annual licenses at a discounted rate of $15 per month = $720 for the periodontist, oral surgeon, orthodontist, and primary care provider.
  • Total annual cost for six TeleDent licenses = $ 2,028, which is our office’s X.

Finding Y is a little trickier. How much your practice makes per hour from teledentistry will vary. You must compute your own number on an annual basis. Some insurers reimburse for teledentistry codes, and some do not. Here are key assumptions on how we computed gross profit from synchronous and asynchronous teledentristry visits. Your gross profit may come from either (1) annual ROI for synchronous teledentistry visits, or (2) annual ROI for asynchronous teledentistry.

Key assumptions for gross profit   

  • Assume four synchronous teledentistry visits per hour, figuring two billable visits per hour. Assume two synchronous visits per hour for emergencies.1
  • Assume six asynchronous visits per hour—with three hours billable—for the same reasons. Asynchronous visits are teledental visits, when the patient and dental provider are not on at the same time.2  
  • Assume $25 for each teledentistry visit, plus $40 for each limited exam or follow-up evaluation. This totals $65 per teledentistry visit. Note that all costs, such as training, are not included.3  
  • Assume two synchronous visits per hour for emergencies, limited evaluations, and four synchronous scheduled visits per hour.
  • Assume a total of 20 hours a month for synchronous teledentistry or 240 hours per year.
  • Assume a total of 20 hours a month of scheduled asynchronous teledentistry visits or 240 hours per year.   

2a. Computation for annual ROI for synchronous teledentistry

   Y (240 hours x $130/hour) – X ($2,028) x 100 = 1439% ROI

                  X ($2,028)                                                                                     

2b. Annual ROI for asynchronous teledentistry

Our assumptions:

  • Assume three of six asynchronous visits scheduled per hour are billable per hours.  
  • Assume an average $65 a visit, then hourly productivity is $65 an hour times three visits an hour equals $195 an hour for asynchronous visits minus the annual cost of teledentistry, divided by the annual costs.    

a)  Computation for annual ROI for asynchronous teledentistry

 Y (240 hours x $195/hour) – X ($2,028) x 100 = 2208% ROI

                  X ($2,028)

Final thoughts

In summary, our annual investment cost is annual TeleDent net profit (cash left after cost of teledentistry and hourly labor costs) x 100 = ROI percentage. Bottom line, we can handle more than 600 patient visits with teledentistry and stay connected to our patients during a pandemic and beyond.

Our cancellations are higher this year because of COVID-19 surges in our area, but we can still provide excellent connections with our patients while they wait their turn for a vaccination and reestablishe routine in-office care. We are also saving PPE, which is not factored into our formulas. PPE is about $24 per patient, and we could add that into our formula. But to keep it simple, we used a standard ROI formula.

Author notes

1. Standard of practice is to provide free post-surgery checks or clear aligner post checks, whether we do that in-person or through a synchronous teledentistry visit.
2. Standard of practice is to provide free post-surgery checks or clear aligner post checks, whether we do that in-person or through an asynchronous teledentistry visit.   
3. We have OSHA trainings once a quarter on Fridays, so the 90-minute training was not an additional cost to the practice, nor did we count the 30 minutes for training the dentist. We did not compare labor costs for other procedures.  

MARGARET SCARLETT, DMD, is an infectious and chronic disease prevention specialist, practicing dentist, and author. For 30 years, she has provided expert guidance on infectious diseases and infection control as a consultant to the Centers for Disease Control and Prevention, the World Health Organization, the Pan American Health Organization, the United States Agency for International Development, the American Red Cross. Since 2005, she has been providing expertise to the CDC on pandemic preparedness and response. She can be reached at [email protected] and (404) 808-­9980.

About the Author

Margaret Scarlett, DMD

Margaret Scarlett, DMD, is a dentist, futurist, and thought leader for Digital Transformation Partners. Retired from the US Public Health Service, her work centered on analysis of large population-based data sets for the Health Resources and Service Administration, the US Census for the National Health Interview Survey, the CDC for its most accurate surveillance system, and Health and Human Services. Dr. Scarlett continues to work with health systems, large DSOs, and organizations on AI in dentistry to advance digital transformation of dentistry.

Updated November 7, 2022

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