Wave farewell to 50%

When I qualified from Liverpool Dental School in 1979, my expectation as an associate for remuneration was 50% of fees after the deduction of laboratory costs. This had been – and remained – the industry norm for quite a few years to come. An even higher percentage was available in areas where people were less keen to work, or if you had been working there for a while – a sort of loyalty bonus. Associates were happy and principals were happy – even reasonable associates would be able to cover their own expenses and this left more of the principal’s gross for themselves. Three to four good associates and a principal could pretty much ‘take home’ all of their ‘gross’. This is certainly no longer the case.

As we moved further into the 1980s and then into the 1990s, many things started to change:
• Support staff became a more valued part of the team and ultimately (and quite rightly) more expensive
• More equipment was required in the surgeries – autoclaves, light curing units, more handpieces, microscopes, even gloves
• Better but more expensive materials became available
• Computers started to appear, practice surroundings improved, even waiting room reading
material became current
• Laboratory costs increased with increasing treatment modalities and, again, improved materials
• Practices required a marketing budget.

By the end of the 1990s, all this was really starting to put pressure on that 50%. Many principals were not taking home 50% yet they were still paying this to associates. However, it was only in a minority of practices that 45% or less was starting to appear. Some associates appear to be fixated with receiving their 50% to the point where they didn’t behave rationally. When Boots at last moved to percentage-of-fees in 2003, 45% was the offer. I can remember some associates accepting NHS or other ‘independent’ jobs at 50% of fees rather than take 45% of much, much higher private fees, although I’m delighted to say that they were very much in the minority.

So where do we stand now? Price per UDA (unit of dental activity) is starting to be quite common now and, whilst 50% for private treatment is still to be seen in trade adverts, I do wonder for how long this will be the case. Some principals are still focusing more on the practice turnover than on the ‘bottom line’.

Huge potential
Continuing the trend from the end of the 1990s, with increasing legislation and clinical governance, GDC-registered staff, an increasing focus on marketing, even more treatment modalities with high cost of entry, more single-use items, investment in the practice, staff training, fully computerised and digital practices and higher quality but more expensive
laboratory items available, 50% just is not sustainable any more.
If fees are set correctly then at 40%, you can still have an associate with tremendous earning potential. This leaves sufficient funds for continued practice investment – not only in
equipment and surroundings, but in the team as well.

• For associates: When you hear the word ‘percentage’, the next question should always be
‘percentage of what?’ Focus on the ‘bottom line’ and do not get hung up on the actual percentage. What is the practice like? What about support staff, the environment and the treatments you will get to deliver?  Will this be good and fit in with your career pathway? Overall, how much will you enjoy the job?
• For principals: If you agree that the 50% is not sustainable, then maybe discuss a transition phase with your current associates which can be combined with fee increases.

With new staff then in most areas, with the right practice, you can attract the right associate at
a sensible level of remuneration and keep everyone happy –
including your bank manager (if you still have one).

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