ROI revisited

It's been more than a year since I wrote about the Return On Investment (ROI) dentists can realize by installing digital radiography equipment in their practices.

Steve Lynch, DMD

It's been more than a year since I wrote about the Return On Investment (ROI) dentists can realize by installing digital radiography equipment in their practices. In the intervening months, there's been some new light shed on the topic, and we're now realizing that the returns are even greater — and more rapid — than our earlier financial models indicated.

Several things haven't changed, though, so I'll start with them. Among the most important, you still have to go out-of-pocket to take film X-rays. As long as your practice remains film-based, you're never going to stop paying out for film, developer chemicals, developer-equipment service and maintenance, and mounts. According to the ADA, those costs amount to about 50 cents per X-ray. In a practice that averages 50 X-ray images per day (or 200 images per four-day week), the dentist will be paying more than $500 per month just for consumable supplies. Even worse, you never get a return on your expenditures for consumable supplies.

Another thing that hasn't changed is the fact that your team members spend a lot of time in the darkroom developing film during a typical week. We used to calculate that time based on the five-to-seven minutes it typically takes to process a single X-ray image, but we've since refined that formula. Five to seven minutes, while an accurate measure of how much time you're spending to develop a single X-ray if that's all you're doing, is reduced significantly for multiple X-rays. For example, it might take 12 to 16 minutes to process a typical full-mouth series, meaning that, in this case, the average time per X-ray is more like one minute.

To come up with a better measure of how much time is spent in the darkroom, we're now using the average figure of 10 minutes per trip to the darkroom to make our calculations. So, if you want a more accurate measurement of how much time your team members spend processing film X-rays, just count the number of trips to the darkroom and multiply that by 10 minutes. You'll soon discover that for the 12 to 15 darkroom visits required to develop and mount 50 film X-rays in a given day, your practice is wasting two to two-and-a-half hours. If you multiply that times $20 per hour, you're up to somewhere in the neighborhood of $50 a day. Extend that out and you're talking $800 to $1,000 a month.

The real changes in the ROI model occur in calculating the return itself. We used to talk about financial return over the life of the newly installed digital radiography equipment. However, since we installed DEXIS in our office, we've realized that the digital return on investment is not something you have to wait for — in fact, you begin to realize a return on your investment in as little as one week! That's because we've come to see digital ROI in cash-flow terms. Here's how it works.

For a typical lease of a digital X-ray system, you will pay about $500 a month. If your practice takes an average of 50 X-rays a day, it costs you about $100 — $50 for consumable supplies and $50 in wasted staff time. At that rate, you will save $500 within five working days of installing a digital radiography system.

In other words, on day six, you'll begin to see your return on investment. That's one of the fastest returns you're ever likely to get for your money! By the end of the first month when you make your first lease payment, you'll hardly miss the money. That's because you'll already have realized between $1,500 and $2,000 in savings. The ROI for digital radiography starts early and never goes away. It's one of the best financial moves you can make.

So if film X-rays are still giving you a negative ROI, consider converting to digital radiography. A sales representative will tailor an ROI analysis for your practice and help you understand one of the key reasons you should make the move to digital radiography ASAP!

Steve P. Lynch, DMD, is in private practice in Oxford, Ala. Since 1995, he has been teaching dentists, team members, dental students and faculty the applications of lasers and digital radiography. You may reach Dr. Lynch by email at doctordigitalxray@yahoo.com, or visit his Web site at www.lynchdmd.com for more information.

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