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Profit is Not a Four Letter Word – But Loss is!


Being part of a white collar environment

Being part of a white collar environment

A few years ago I gave a lecture in Calgary about business systems that support dental implants. At the break I was approached by one of the doctors who brought his entire team to the seminar. He thanked me for talking about the harsh reality of overhead expenses. Dentists certainly have to protect their own income, but something that isn’t discussed, is that the dentists are also responsible for the livelihoods of all of their staff. If the business fails, all of those people would be out of work and the patients would lose their dentist.

Businesses must be fiscally responsible in order to be sustainable and that means making a profit. Your dental practice should continuing growing each year at a minimum rate of 10% in production, gross billings, while controlling the overall expenses to between 50 – 60% of production. If the business is not growing then it is slowing down and losing momentum. Some call this a plateau. Be careful because at the end of the plateau there might just be a cliff. Don’t lead your practice over the cliff.

Here are some simple strategies to increase your profitability and decrease your expenses on a continuous basis.

Five Ways to Increase Your Profitability and Decrease Expenses

Increase Profitability

  1. Fill the holes in the schedule. If you don’t have warm bodies in your chairs, the expenses are going up and profits are down. Maintaining appointment book control involves focus and commitment. I recently visited an office that had a 1 hour cancellation during prime time the following day, although the receptionists tried everything possible not to let the patient cancel. Within 10 minutes those ladies had the appointment filled. In most cases it is possible to avoid no shows and short notice cancellations, but when it cannot be avoided, the appointment scheduling coordinator needs to know what steps to take to fill the appointment.
  1. Preschedule hygiene appointments and use proper coding. In many cases, some hygienists seem to be nervous about coding for the work that they do. I tell all hygienists that in order to do the right thing for the patient and their college’s requirements, practice patient specific care, book appropriate times for appointments and bill for what they do. The ODA and the CDHO collaborated on an article, published by the ODA that was called “Separating Fact from Fiction” in which they stated:

[1]“Treatment time is not just “instrument on tooth time”. Treatment time includes the time spent reviewing the chart to prepare oneself for the procedure. Also included is the time spent administering a local anaesthetic when required, performing the procedure, providing post operative instructions to the patient (when required) and recording the treatment notes in the chart. Examples of time spent that would not be included in treatment time would be the breakdown, disinfection and set up of the operatory, as well as administrative functions such as billing and reappointing the patient. Time spent measuring and recording periodontal findings would not be included in scaling/root planing. That time would be considered to part of the dentist’s examination & diagnosis time whether dentist performs the examination & diagnosis at that appointment or at a subsequent appointment.”

Help patients to value the hygiene appointments by not calling it a “cleaning” . Dental hygienists must believe in the value of their services in order for patients to do the same. They are registered, regulated health care professionals and do so much more than clean teeth, they also promote healing and prevent disease.

3.   Become a non-assignment practice. I have been telling my clients for several years that within the next few years, you will not be allowed to accept assignment, even if you want to. This is the direction that the insurance industry is headed. They only want to deal with the subscriber and they are making it as difficulty as possible to receive reimbursement.

Within the next few years you will not see dental insurance exist as it does today. The insurance tsunami is on its way. There are many dental offices that are being purchased by large corporations. Eventually, insurance companies could provide the financial backing to these corporations and the dentists would be working for insurance companies, and not be independent practice owners. The best way to prepare for this and protect your practice is to become a non-assignment practice and help your patients value their treatment. You can also help patients to understand how they can save money by not having dental insurance. Why not take the amount of the premiums that are taken off of their paycheques and pay the dentist directly, or invest that money in a tax free savings account that will act as their dental reassurance benefit. If you would like more information about how to implement a Dental Reassurance Program© at your office, just send an email to to receive a value statement that you can provide to your patients.

  1. Market your services. You need to have a constant flow of new patients coming to your practice. There are dental offices opening everywhere and the competition is fierce. Gone are the days when you could hang a shingle and patients would come to your office and become your loyal patients who refer all of their friends and family. In today’s market, you need to work at attracting new patients and retaining the ones that you want to keep. Having a marketing plan is a must. Start by developing a budget and calling in experts to help. Know your target market and focus on return on investment for your marketing campaign. The best return on investment of course is word of mouth referrals.

5 Treatment planning and coordination. It is important to treatment plan for total health and esthetics. That is what your patients expect!. Then you need someone at your practice to follow-up with the patient, make financial arrangements, deal with the patient’s insurance company and be the treatment concierge. Dentists can’t ubiquitous and the support staff should have the time, tools, training and technology to follow through with the treatment plans and provide excellence in customer service. It shows your patients that you care.

Five Ways to Decrease Expenses

  1. Implement an inventory control system. A clinical staff member should be assigned the responsibility for the clinical supplies and an administrative staff member should be assigned the administrative supplies. Careful monitoring of the usage of each item along with implementation of re-order tags should ensure that enough time is allowed for ordering, price shopping, restocking of supplies and that the appropriate amount of stock is maintained. Expiry dates on time sensitive products should be checked regularly and stock should be rotated accordingly.

What are the expected outcomes of an inventory control system?

  • To achieve the goal of maintaining the percentage of clinical supplies to 5% of gross production per month.
  • Achieve and maintain control of office expenses.
  • Reduce overhead expenses.
  • Control the spending patterns.
  • Reduce or eliminate over ordering.
  1. Control staff costs. Staff costs should run at between 20-25% of the total production. If they are higher, look at your appointment schedule as there will likely be holes in the schedule. The appointment schedule is the beating heart of your practice. When the schedule falls apart, everything else follows. Having warm bodies in the chairs receiving treatment is the only source of revenue generating activity in your practice – everything else generates expense.

Is your staff taking proactive measures to prevent no shows and short notice cancellations?

  1. Monitor how much you are spending on repairs and maintenance of the equipment. If they exceed 1% of production, then you need to look in a couple of areas. Is the equipment being properly handled or is it time to think of replacing old equipment that is constantly being repaired. If the latter is the case start planning for your future capital requirements.
  1. Create and work within an Operating Budget. The operating budget is the starting point the forms the basis of the daily management of your practice. It is your dashboard that keeps you on track. Your computer software will provide you with the numbers that fit with your budget every month. If the numbers are out of alignment with the budget it helps you to make corrections quickly and apply strategies that bring it back into alignment.
  1. Increase your revenue. The best way to decrease expenses is to increase revenue, but you must also control expenses at the same time. The best way to increase revenue is to have patients booked in the schedule, who keep their appointments, value your services and who are on active recall. When you increase the revenue and collections of your practice, all of the benchmarks for success will align.

To make sure that your management systems are running at maximum efficiency and effectiveness, check them often and look for the hidden signs of erosion. Make any necessary adjustments quickly and your practice will run like a well-oiled and well maintained machine that will reward you with many years of sustainable growth and profitability.

For more information on how to increase your profit and decrease your stress, contact DOCS at 905-336-7624 or send and email to

[1] Ref:  Separating fact from fiction, The Definition of Treatment Time and the use of

The ODA Suggested Fee Guide .A Joint Message from the ODA and the CDHO

About author
Sandie Baillargeon is a leading authority on how to increase the effectiveness of medical and dental business systems. Ms. Baillargeon is author of two text books, Dental Office Administration and The Canadian Dental Office Administrator, published by ITP Nelson Canada. Sandie is the owner and operator of Dental Office Consulting Services, which specializes in dental business planning, staff development, consulting and continuing education seminars. Visit her website at or contact her directly at (905) 336-7624.
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