How Are Dentists Compensated?

One of the biggest questions that most dentists have upon graduating with their D.M.D is whether to join a Dental Service Organization (DSO) or open their own practice. Related to this is the difference in compensation plans that are available with each option. How exactly are dentists compensated in a dental organization versus as a business owner? Which option makes the most sense for you? These are the questions we will answer today.

GENERAL COMPENSATION OUTLOOK

Many dentists need to start generating income quickly to start paying off student loans or other expenses. The good thing is that according to Payscale.com, the average base salary for a dentist ranges from $82k-$200k, not including bonuses and commissions. How your salary is determined differs based on your location and whether or not you are self-employed or an associate in an established dental service group.

DENTAL ORGANIZATIONS

As an associate at a DSO or other established practice, you are typically paid by the hour or are salaried. You can also be paid as an independent contractor, and you would be expected to track income and set aside funds for tax purposes. However, you can also get a percentage of commission based on either the ‘production’ that you work on or, most commonly, of the funds that are collected after employer discounts, costs for office overhead, etc.

For example, if you are an employee at a dental group and you have several patients that have a 20% discount through their employer, you might only be eligible to receive roughly 50% of the remaining funds after they are allocated towards administrative expenses.

SELF-EMPLOYMENT

If you plan on or already run your own dental practice, compensation will look different for you as the owner. First of all, there’s no one over you determining your hours or commission rates, so your income potential can be higher than an associate. You also have more flexibility in terms of how you prefer to be paid – ie per production or a portion of total monetary collections for rendered services – which can maximize your compensation as well. One key benefit you have as a practice owner is to carry over your business as an asset when or if you stop working with patients.

However, like any business owner, you will need to take the overall overhead of your practice into consideration before compensating yourself. In addition to setting aside the appropriate amount of your gross income for tax purposes, several factors affect how you can claim as take-home pay. These include:

• Employee wages and benefits, if applicable
• Business Insurance
• Office space rental or mortgage
• Administrative systems like payroll, accounting software, etc
• Equipment
• Marketing

Once these main considerations are taken care of, then you can think about how much it makes sense to allocate for personal compensation. This number is often based directly on your overall success as a practice.

NEED MORE INFO?

Understanding the ins and outs of how you get paid as a dentist can be a little confusing. You might also be wondering if one type of compensation plan works better for your needs than others. If you have further questions about compensation or anything else related to your dental career, give Dr. Coughlin a call at (413) 224-2659.

The Importance of Reviews for your Dental Practice

Did you know that 87% of consumers won’t consider a local business with low online ratings, 44% pay attention to the quantity of reviews, and 69% only find relevance in current reviews? These statistics play a significant role in a potential patient’s decision-making process when they are evaluating dental offices and deciding who to call. When consumers are looking to decide on a local business, they trust what others have to say about their experiences and the reviews help to build credibility. It is important to be on top of these reviews, and if you time does not allow, hire someone to manage this for you.

You can spend money on advertising, but if your online reviews are not good or non-existent, you are decreasing your chances of a patient choosing your office as their dental office. In order to effectively manage your online reputation, you need to focus on three things; review monitoring, review responding, and review generation.

• Review Monitoring: Monitoring your online reviews is important so you know what people are saying about your business. There are many review sites that patients could be going to and leaving feedback and without monitoring, you would be unaware of these reviews. Plus, the feedback is critical to your online rating. If you don’t know what is being said, then you cannot respond, engage, learn of areas to improve, or address any concerns.

• Review Responding: It is in best practice to respond to all comments about your business, both positive and negative. Responding to the positive reviews publicly shows you appreciate feedback and opens the lines of communication for future engagement. Responding to any negative reviews is important for damage control and continuous improvement.

• Review Generation: There are many ways to collect new reviews from patients. You can post your review links to your social media outlets, asking current patients to review your business. You can also train your staff to ask patients to leave reviews while they are in your dental office. The most effective way is to make it easy for patients to review you by giving them the direct link for the review site by either emailing or texting them a direct link. Using direct links make it easy for them and results in the highest acceptance rate.

A dental office’s online reputation plays an important role in generating new patients for your office. This can be done internally by setting up systems or by hiring an agency to handle the processes for you. With 90% of consumers looking at online reviews before making decisions, it is important to make managing your online reputation a priority.

Do you want to grow your dental practice? Throw out the box!

It’s an expression so common that it’s become a cliche:, “you have to think outside the box.”

But whether you are inside the box or outside the box, it’s still seen as the “safe space” you can retreat to when things get tough. But is it really that safe?

Let’s take a look at the current state of our business.   

  • The cost of a dental education continues to skyrocket with an average student debt of almost $300.000!  
  • There are more Dentists than ever electing to become employee’s rather than owners
  • Dental insurance companies are still squeezing the profit out of every procedure making it more and more difficult to be profitable.

Meanwhile, Managed Service Organizations are growing faster and making it even more difficult for solo practitioners or small group practices to succeed.  

So I say that it’s time to throw out the box if you want to compete and succeed on your own terms.

There are no shortage of consultants out there ready to give you answers. But most of them have never practiced dentistry. So they have a very limited view of what we are capable of doing and where our businesses can find opportunities to grow.

I still practice dentistry five days a week and I’ve built a large dental practice in Massachusetts with 14 locations providing a full range  of dental care to patients.However, changing rules, regulations, and dental insurances are taking a toll. Every year things just seem to get tighter and tighter with very few options on the table to grow.

At least that’s the way it seems if you aren’t willing to kick aside expectations and look for opportunity.

About five years ago I started to implement Botox and Dermal fillers into the Practice. This is a natural progression for dentists and I am here to say to embrace these cosmetic treatments!  Get trained, get your team on board and be aggressive and proactive! I challenge you to consider additional treatment modalities that allow you to side-step insurance companies altogether because they are strictly fee-based.

Your position as a trusted practitioner in your community makes you uniquely qualified to perform additional services at a high level and for a full fee

In addition to Botox and Derma fillers, some other treatment options to consider adding to your offerings include:

  • Radiofrequency treatments (RF) to tighten the skin around the face and neck. Each treatment takes only 5-10 minutes and maintenance is every 4-12 months.
  • Laser treatments to remove red and brown spots on and/or around the face, spider veins, unwanted hair and tattoos as well as scar tissue or wrinkles. Each treatment takes between 25-60 minutes and usually can be completed in 2-4 visit with each visit scheduled 4-6 weeks apart.
  • You can also use both RF and Laser to remove unwanted adipose tissue under the chin, sub mental area inner and outer thighs and abdomen.  These treatments usually can be completed in 2-6 treatments scheduled 6-8 weeks apart and each session lasting between 25-60 minutes.
  • Hydra facials, which replenish the youthfulness of the skin in 30-40 minutes taking years off your patients skin and is maintained by a follow up visit every other month.
  • Kybella injections in the sub mental area to remove unwanted fat or adipose tissue causing the dreaded double chin.
  • PDO sutures or what is commonly referred to as a lunchtime facelift almost instantly taking years off your face.

Does the thought of providing these services scare you? IT shouldn’t! We may not be Dermatologists or Plastic Surgeons, but we are skilled practitioners who are well positioned to elevate Spa Dentistry to something far above warm towels, relaxing music and simple massages.

You already have a captive clientele.  A majority of our patients want to improve their looks.  If they aren’t getting it from you they will find an alternate service provider to do it.  Take the action steps necessary to position yourself for the future.

For Dentist’s who remember a time when the fee you charged was actually your reimbursement, the proposed treatment options I’m suggesting are all fee for service!  They are all considered elective, non-surgical and the demand is high. Interest and awareness is enormous so consider adding additional procedures and services to you practice today.  Be first to implement this in your area – not the last.

Of course you need to be aware of your  state’s regulations. Some states may require you to work indirectly or directly under a Physician’s license.  Other states may require you to have an Esthetician’s license. However in most cases, you will delegate these procedures to a Physician Assistant, Nurse or Lic. Esthetician

In 1983, my first year in business, I put in my first dental implant.  Back then there were enormous resistance,s, but today, only 3 decades later, it is considered the standard of care in many cases.  So throw out that box, step out of your comfort zone and consider the possibilities!

Kevin Coughlin DMD, MAGD, MBA, LE is a practicing general dentist, who has a consulting business, Ascent Dental Solutions LLC, with a focus on education, training development and knowledge. Dr. Coughlin has a Non-Surgical company called Ascent Laser Aesthetics LLC.  He has taught practice management, lectured and written six books on the business of dentistry with an expertise in dealing with MSO’s and DSO’s. Dr. Coughlin has over 100 podcast on Apple radio, Ascent Radio and several webinars. His last book is the Non-Surgical Guide to Aesthetics, available on Amazon, to help patients and clients along with team members to understand quickly and easily options to make you beautiful on the outside.

 

The rise of corporate dentistry is relentless

The rise of corporate dentistry is relentless. With rapid expansion and almost limitless budgets, dentist/owners are being forced to compete against entities with incredible purchasing power and efficiencies of scale that are almost impossible to achieve as a solo owner.

Shockingly, many dentists aren’t even aware of this growing threat to their business. Corporate dentistry  – which include Managed Service Organizations (MSOs) and Dental Service Organizations (DSOs) – is growing at a rate of between 40 and 45 percent each year.

What is the difference?

Dental Service Organizations are usually chains and run like franchises. Some have a universal look and feel along with strict franchise practices and branding. Some existing dental practices may be permitted to retain their own unique character and feel. However behind the scenes the operations are often changed to favour certain suppliers and adopt uniform business practices.

If you are a dentist who hates the nuts and bolts of running a business, I can certainly see the appeal of such an arrangement. However, if you are like myself, and have an entrepreneurial outlook, such a scenario might seem a bit constrictive.  

The bigger issue is with the second type of corporate arrangement, Managed Service Organizations or MSOs, and its relationship to venture capital and equity firms.

Equity firms typically invest short-term.  When they get involved with dental firms the goal is to triple or quadruple their money over a 3 to 7 year timeframe. This puts a lot of pressure on the dentist and staff as the investors constantly demand increased efficiencies to maximize profits. If you hated running a business before, this model is not going to change how you think about it.

Long-term sustainable growth is not the goal. Maximizing return for investors in the short term is. Indeed what often happens is that the practice is flipped to new ownership frequently as the old owners cash-out. And the process of revenue squeezing starts all over again.

This focus on short term results can damage a practice’s reputation in the community and leave it open to competitors who are taking a longer view and choose to compete on service rather than price.

In the end how you run your business is up to you. The important thing is to have all the information and understand the ramifications, both positive and negative, before you make any decisions.

Ready to Get Started?

If you are interested in learning how to take your dental practice to the next level, please contact Ascent Dental Solutions today at 413-224-2659 to learn how Dr. Coughlin can help.

Three most common problems surrounding dental payroll

Handling payroll is one of the most arduous tasks a dentist/owner has to deal with on a regular basis. Doing it yourself eats up valuable time that would be better spent treating patients. I recently spoke to Jamie Scherban, Senior Business Consultant at Paychex to discusses the most common problems dentists face regarding payroll.

When I started out back in 1983, there was no punching in or punching out. My office worked on the honor system. This worked well until I got into trouble with a disgruntled employee.

I then moved to sign in sheet to a punch clock – both of which also got me into trouble. Obviously administration was not part of what I was taught in dental school. And it showed as I made mistake after mistake until I finally outsourced this part of my practice to someone who knew what they were doing.

A dentist with 6-10 employees can spend anywhere between two to four hours a week focusing on payroll. “Our job is to give that doctor the ability to earn as much as they can based on the hours they work,” according to Scherban. “They should be focusing on their practice rather than focus on this stuff.”

When Scherban comes into a practice, any practice, he generally finds them making the same three mistakes that cost them time and money.

1-Incorrect setup

Did you set up the business correctly with the state and IRS? Even with existing businesses a lot of the time taxes are filed incorrectly because they were set up incorrectly. This results in late filings, penalties and notices from the tax man.

2-Filing taxes on time

Dentists are generally very good at being dentists. However when it comes to general administration duties like payroll tax filing – things can get overlooked. So taxes are not filed on time.

3-Managing employees

How do you manage benefits and time off? How do you track who punched in? Did they punch out?
This takes time away from the core business of being a dentist. So finding a solution that takes these issues off the table reduces the stress and makes the workplace run more smoothly and with less conflict.

In the end it is your responsibility to ensure that everything is properly tracked. If you choose to do it yourself, you are going to spend less time with billable patients which will cost you money. So it just makes sense to outsource this type of admin to a company such as Paychex, so that you can strike one of the least interesting tasks off your to-do list.

Dental associations need more business education programs

As a dentist it’s very unlikely clinical skills are your biggest challenge. Dental schools are very good at teaching the mechanics of our profession.

What they are not so good at is preparing us for running a business.

For most of us it’s a trial by fire. The average dental graduate comes out of school with a mountain of debt.

According to the American Dental Education Association (ADEA), the average debt per graduating senior is $287,331 (according to a 2017 survey).

That’s a big hole to dig yourself out of.

And starting a practice of your own isn’t cheap either. According to Bank of America, the average cost to set up a dental practice is just over $400,000.

That’s just the start up costs. Let’s say you’ve managed to secure financing and open your doors. Being a dentist today is not the same as it once was. Where we once were able to grow our business over decades, today there is increased competition from Managed Service Organizations and Dental Service Organizations that can leverage their size and buying power to negotiate better deals than a single dentist can hope to get in their wildest dreams.

At this point you might be thinking that there is really no hope. But that’s not the case. These organizations got where they are in the marketplace because they identified the lack of business experience most dentists bring to the table.

As a working “wet-finger” dentist myself, I believe it is the responsibility of  local, state and national dental associations to help their members learn more about what they are facing and give them the tools to compete against these MSOs and DSOs so they can continue to thrive and grow.

In addition to one-on-one coaching and consulting for dentists, I regularly offer free webinars to dental associations to bring attention to this issue. If you are in a leadership position at your association send me a note and let’s talk about a free session for your members.

If you are a member, make an introduction. Connect me with your programming or education person and I’ll do my best to set something up so you and others in your dental community can learn more about MSO’s, DSOs and corporate dentistry.