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Hygiene, Inc. |
How Managing with Statistics can Help You Turn Hygiene into Profit |
by Tyson Steele |
An excellent hygiene department is often the foundation for an excellent restorative practice. After all, patients who are consistently in hygiene are much more likely to accept restorative treatment, stay in your practice and refer people to you.
But hygiene is more than just a source for restorative treatment, it is an integral part of your practice that should be profitable in its own right.
We urge you to look at your hygiene department as if you were running a multinational conglomerate. In other words, "Hygiene, Inc." needs to be a profitable, independent part of your practice and help drive patients into your "Restoration, Inc." division.
Keeping Score
Often, we talk with dentists who have no idea if their "Hygiene, Inc." division is profitable. After all, it's fairly difficult to get a handle on hygiene profit when so many hygiene overhead items like rent, administrative staff time, billing and equipment costs are shared with your "Restoration, Inc." division.
The following key indicators will help you get a grasp on your general level of hygiene profit, without hiring an efficiency engineering firm to parse every single aspect of your practice.
- 85% of all active patients should be in the hygiene program
- Hygiene should provide about 35% of annual production
- Hygiene gross salaries should be 33-40% of total hygiene production.
Let's look at each of these indicators in depth . . .
Number of Hygiene Patients
85% of all active patients should be in the hygiene program.
First, you need to know how many active patients you have. The easiest way to determine this is to count one shelf of your active charts (those patients you have seen at least once in the last two years) and multiply your count by the total number of shelves. This will provide you with an approximate number suitable for our purpose.
Dental software can sometimes give you an inaccurate active patient count. So, if you get the number from your computer be sure to check it against a visual estimate. Also, if necessary, be certain to purge your charts of patients not seen in the last two years.
Next, compute the number of active patients actually in the hygiene program by multiplying the number of hygiene days per week (2 hygienists working 2 days a week each = 4 hygiene days/week) by the number of patients each hygienist sees per day. Then multiply that number by 24 weeks, giving you a general estimate of the number of active patients actually in the Hygiene program.
This formula assumes that the average hygiene patient is seen every six months. (24 weeks is generally, but not always used instead of 26 weeks to account for vacations, holidays, etc.)
Finally, divide the number of patients in hygiene by the total number of active patients. This will give you the percentage of active patients in hygiene.
Keep in mind that, for most practices, about 15% of all active patients will never be in hygiene. Despite all your best efforts, they will only visit you when they are in pain.
Hygiene Production
The Hygiene department should provide about 35% of annual production.
The hygiene department production total should include everything done in the hygienist's room, including films and doctor exams.
On occasion, a hygiene department will contribute less than 35% of total annual production yet will be meeting all the standards. This usually occurs when the dentist is superb in the area of case presentation and case acceptance -- thereby
increasing the percentage of total production allocated to restoration.
Hygiene Salaries
Hygienist gross salaries should be in the range of 33-40% of total hygiene production.
Gross salaries include everything reported on your hygienist's W-2 (block 5) or 1099 forms, including salaries and bonuses, but not usually including benefits.
If your hygienists are "busy" but their gross salaries are too high as a percentage of their production, one or more of the following factors is often the culprit:
- Your hygienists may be "busy" but not productive. (Most hygienists need to produce at least $700/day to be profitable.)
- Your hygiene fees may be too low.
- Your hygiene salaries may be too high.
I recently talked with a client whose hygiene salaries ran approximately 50% of average hygiene production. This is way too high! After taking out other overhead (administrative staffing costs, billing, rent, utilities, supplies, etc.) the dentist was LOSING MONEY every day the hygienist came to work.
Research indicated that his hygienist was producing about $650 per day (adequate for the area.) However, her salary turned out to be approximately 25% higher than other hygienists in the area. Armed with this knowledge, the dentist was able to take steps to get hygiene profitable again -- an action that could net him an extra $25,000+ this year!
I Know What You're Thinking
"But I don't want to be on roller skates all day doing hygiene checks!"
I don't know who coined the "roller skate" analogy, but I'd like to clobber him over the head. What could be better than skating from room to room collecting money and building your practice. Remember, those patients in hygiene represent the future of your practice. Take care of them and they'll take care of you.
Besides, hygiene checks can be done fairly easily and efficiently with proper scheduling, planning and the use of morning huddles.
Of course, your days won't always run like clockwork, but does anything? Ask your stock broker to tell you about the last time she had an "smooth" day.
The Profit Center
By tracking your Hygiene indicators, you can take action to improve the profitability and effectiveness of your hygiene department.
Depending on your analysis, you may find that you need to increase your number of hygiene patients, boost hygiene production, or improve your hygiene salaries to production ratio. (You may even need to address all of these issues.)
Regardless of the path you choose, knowledge is power. By managing with statistics, you are well on your way toward transforming your hygiene department into the highly profitable "Hygiene, Inc."
If you haven't had a complete Practice Diagnostic in the last several years, please give us a call and we will be happy to provide you with a free analysis of your hygiene department and all other key areas of your practice.
This article is a reprint of Tyson's column in the June "Profitable Dentist Newsletter."
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