How to run a dental practice: Calculate hygienist compensation
Would you like to see how your hygiene team is performing financially? Using your Dentrix reports, you can more deeply understand the economics of your hygienist team performance.
Step #1: Find each hygienists net production for the month
If you have joined any PPO plans or you offer any discounts, you know that these withholds and discounts add up. Since you are not paid for these withholds and discounts (adjustments), you need to take them into consideration when determining each hygienist’s production.
Gross production $_________
Less Adjustments $_________
= Net Production $_________
To make sure your adjustments are set up properly, review this web page.
Step #2: Find each hygienist’s compensation for the same timeframe
Since many dental practices pay staff every other Friday, you cannot just look at your payroll report to find an accurate number. You need to look at the exact dates for the month and calculate how much each hygienist was paid so you are comparing apples to apples.
Once you know how much each hygienist was paid, now you have to determine a value for the benefits they receive as well. Look at what you spend on uniforms and 401k and any other benefits. Add the cost of the benefits to the pay to come up with the total compensation for the month for each hygienist.
Total compensation $________
Step #3: Count up total patient hours and open time
Now, for the same month, pull up your schedule and document the number of open hours and the total hours each day for each hygienist. Since this month has passed, you are not worried about how many hours were no shows or same day cancellations, you are simply documenting the final results.
Total open hours for the month: _______
Total patient hours: _________
Step #4: Do the math
To find the percentage of production your hygienists are being paid:
Total compensation/ Net production = ___%
The popular benchmark is 30%. If your hygienists are being paid 30% of their production, then you are at the industry benchmark. If they are paid at a much higher percentage, this can be a problem.
Next, let’s look at the production per hour:
Net production/ Total patient hours = $______ production/ hour
Net production/ Hours patients seen (not including open time) = $____ production/ hour
This calculation can be helpful to see how much your hygienist really is producing per hour.
Finally, we will look at the compensation per hour:
Net compensation / Total patient hours = $______ compensation / hour
Net compensation / Hours patients seen (not including open time) = $____ compensation / hour
To evaluate your hygienist’s compensation, you can compare the per hour rate against salarywizard.com where you can enter your zip code and the position of dental hygienist to see a bell curve of compensation in your area.
This series of calculations is intended to help dentists, spouses who handle the finances for a practice and administrators to run the numbers to evaluate the economic performance of each hygienist employed by the practice. With good financial analysis, you can make good decisions.
Hygienists can use this series of calculations to determine their own financial performance as well.
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If you are interested in finding out other performance metrics like this for your practice, you may be interested in my service, Know Your Numbers – I will remote into your software and run a series of reports to provide you a “Top 10” dashboard for your practice. Click the button to learn more about this service:
Keeping current with industry information is just one way to run a successful dental practice. If you’re interested in new ideas on running a dental practice, please subscribe to my weekly blog. One of the biggest challenges to managing a dental practice is managing dental insurance. With dental insurance handled, then dental marketing for new patients becomes a primary focus. In today’s day of online reviews, handling patient complaints well is essential. As your practice grows, hiring dental staff becomes more important. With 18+ years of dental practice management experience, I’m open to your questions to help you run a successful dental office.