Current State:
A confluence of events over the last several years has created the most challenging workforce environment to date for practices seeking to hire and retain dental hygienists (“RDH”).
The COVID Era caused middle-level providers across all healthcare verticals to leave their roles – with many returning to reduced schedules, if at all.
The laws of supply and demand have driven a substantial increase in RDH wages over this same time. A practice’s location and type - i.e. solo practice or group - do not seem to have mitigated these phenomena.
Exacerbating matters, serial job hopping appears to have rooted itself in the industry and presents an HR dynamic not previously experienced. It has also become increasingly common for RDHs to work in multiple settings - whether it be for simple variety and/or to maintain their optionality should greener pastures present themselves.
This is the new normal.
Radical Acceptance:
There is no near-term solution to this conundrum. This is not going to change anytime soon. It is an immovable object.
So, how can practices thrive despite such wage and workforce pressures? How can any practice become the employer of choice for RDHs?
Future State:
A well-run hygiene team should still be the fundamental operational engine for any general dentistry practice. It is the first line of defense for the patients’ oral health. Symbiotically, it should also set the stage for the dentists’ overall busyness, especially when dentist/hygienist collaboration is well-tuned.
This increase in RDH wages has placed previously unforeseen financial pressures on practices throughout the country – in all markets and practices of all sizes.
Which levers are even available to be pulled?
- First, start by making sure you have the most fulsome understanding of how hygiene results can impact overall practice results - starting with patient care, then dentist/RDH interplay, and, lastly, how these stand to potentially impact financial outcomes for all
- The adage of - “do the right things, for the right reasons, and the financial results tend to follow” - absolutely applies here
- Focus on improving overall operational metrics - recall, scheduling, mitigating no shows and cancellations, etc. – the “blocking and tackling”
- Improve patient communications around periodontal care – focused on educational opportunities
- Ensure that the periodontal care already being provided is being coded accurately as 4XXX services and not 11XX services - said differently, strive to eliminate “super (bloody) prophies”
- If feasible, consider a transition to production-style compensation – in some markets, the costs to employ RDHs have converged with those to employ newly licensed dentists
- Explore the potential of assisted hygiene models and/or utilize assistants differently in those states that allow certain hygiene services to be provided by non-RDHs – this could be especially impactful in rural areas where the availability of RDHs is challenging
- Be prepared and excited to equip RDHs with the technology necessary to affect the changes that are being sought
- Ensure that you are offering CE experiences to RDHs as part of the overall compensation packages and that the CE aligns with results being pursued
- Lastly, remember to be patient, the behavioral changes being sought could take 2-4 recall cycles to gain traction and start delivering consistent results
Hygiene Impact on Practice Value
Hygiene income is commonly viewed as “passive” or at least “semi-passive”. All other variables being equal, it is the single largest determinant and influencer of total practice value.
Said differently, optimized hygiene results tend to maximize the value of a practice to any prospective buyer. A well-operated hygiene department can become a very valuable asset. An asset that is usually salable and transferable to the next owner if managed mindfully. This is why it can drive practice valuations to the upper end of the range.
Opinions can and do vary, but it is safe to say that an overall practice contribution of 25-35% from the hygiene team is a reasonable and achievable goal. This is influenced by the relative contribution of the dentists. In practices that also have highly productive doctors, the % contribution tends to be towards the lower end of the range even if the hygiene team’s results are stellar.
Within the hygiene team itself, it is important to look at the relative contribution of periodontal services as part of the overall mix of services. In an optimized practice, the contribution from periodontal services can approach 35% of the hygiene team’s total revenue. It would be unusual to routinely exceed these levels.
Nerdy, but it can be an interesting exercise to isolate the P&Ls for the dentist and hygienist “departments”. In accounting terms, we are discussing “contribution margin” – the difference between the revenue received and the variable costs associated with delivering the related production (wages, payroll taxes, benefits, labs, supplies, etc.). When doing this exercise, it is important note both the % and $ margins between the two categories. If you’ve not done this before, it could prove to be a surprising exercise!
Please LMK if you have any questions.
Be well,
Sean