The business of orthodontics
Lester Ellman explains how to remain profitable and manage successfully
At the birth of orthodontics as we know it, much of the treatment was provided by GDPs; often under the guidance of an orthodontist. This changed when some orthodontists decided that this should be a post graduate only topic and largely kept away from undergraduates. The net result was that orthodontic specialists were discouraged from assisting GDPs.
Now we have further changes taking place with the emergence of the orthodontic therapist and the return of GDP provision of ‘simple’ orthodontic treatment which is of a cosmetic nature, often facilitated by the use of computerised predictive tooth manipulation.
I shall look at the influence of these things on the business of orthodontics – I have phrased it this way because the provision of orthodontic treatment is a business. It must make a profit or there will be no money to reinvest in the practice and dilapidation and bankruptcy will eventually result.
We need to get to grips with the business of orthodontic practice. Very often the principal of a dental practice (including orthodontic practice) took the amount that was left after paying the expenses and regarded that as his/her earnings. There was no planning with regards to the amount one wished to have as ‘take home’ pay and there was little thought about budgets and replacement equipment. In an earlier era this was far less relevant than today.
Now the profitability of practice has been severely reduced and I cannot see it being improved in the near future. Added to this is the reduction in the numbers of children eligible to be treated under the aegis of the NHS. This, too, is likely to be further restricted. With these things firmly in our thoughts we need to appreciate what the practice profit is; this is what is left over when all the expenses are paid including staff pay and the amount we take as our pay.
From this surplus we can set aside money for practice development, redecoration and replacement of equipment, unplanned repairs and maintenance. Add some additional staff training: now you are now getting near to the business viewpoint; i.e. looking forward with an awareness of planning and understanding the demand possibilities.
So, now we’ve done the doom and gloom what can we do to make our lives easier?
The first thing is to appreciate that the provision of orthodontics is both a healthcare improvement and also a business in the true sense. Not always easy or comfortable bedfellows but ones we have to live with and manage.
The introduction of orthodontic therapists opens doors for us to do an analysis of how best we might deploy these skilled paradentists. Examine what they are trained to do and what they are not trained to do and you will soon realise that they can do a lot of what orthodontists do with the exception of diagnosis and treatment planning. This then leads me to believe that with the acquisition of some skills in delegation the specialist orthodontist can spend his/her time undertaking the diagnosis and treatment planning of each case and then, after drawing up detailed plans, can instruct the therapist to undertake the actual placement of brackets and wires in accordance with the plan. Some intermittent oversight by the orthodontist is required to ensure that all is going according to plan – this is necessary because the therapist may not recognise any variation at its start when it will be easiest to correct.
Delegation is key
The gentle art of delegation is one which has never been the forte of the dental profession. We have always felt that we should do it all: treat patients, order stock, check lab work, fill out forms, pay the bills, do the accounts, sort out the PAYE and on no account share any information with the practice staff in case they see how much we are earning and ask for a pay rise.
I cannot tell you how often I have heard this stated in a roundabout way by practitioners, usually missing out the last section because they don’t want to appear mean and be accused of not paying their staff a reasonable wage. All this was fine when I first qualified because as long as one was industrious one was guaranteed an income. Just occasionally I ponder on how much better our income might have been had we really understood the business aspects of dental practice. Then I abandon the process because we cannot go back and must go forward.
So we are formulating the concept that we can usefully deploy paradental staff to improve the efficiency of the practice and at the same time we can reduce expenditure because a therapist is currently less costly than an associate specialist orthodontist. A similar process can be used to reach the conclusion that we can delegate an awful lot of the management of the practice to a trained practice manager.
Often, the ‘practice manager’ is a senior dental nurse or receptionist who is given very little freedom to ‘manage’ and even less training. The result is that she will become frustrated because she will do little other than manage rotas or manoeuvre staff placements so that there are no gaps when absence occurs. Isn’t it time that your practice manager was given her head and the necessary training to ‘manage’ the practice? Then you can get on with treating of patients and supervising the therapists.
Now this is almost a state of Utopia, with jobs apportioned according to skills and maximising the treatment output whilst controlling costs to ensure a good return.
The fly in this euphoric ointment is that most of the orthodontic treatment provided by registered specialists is undertaken under the NHS. Your NHS contract is limited so that even when you improve efficiency the maximum money coming into the practice is restricted by the terms of your contract. There is an argument to be made in favour of working a little less and improving your work life balance but not everyone wants to do that. Many practitioners simply want to increase efficiency and improve output to elevate profits. Perhaps this is the time for some lateral thinking and innovative thoughts about how the future of orthodontic practice can become more profitable and explore new avenues?
Be on the ball
Orthodontics is provided on a PDS contract which means that every few years it comes up for review which can simply be a roll-on of the existing contract or can be a complete revision of the allocation of UOAs or they can alter the price per UOA (downwards) or insist that it be put out to tender.
On numerous occasions that process has resulted in a reduction of the unit price of the UOA and on other occasions has resulted in the contract being taken from the original practitioner and passed to another (no malice – just business!). Net result is that the original orthodontist has been deprived of his income. This is a shocking state of affairs.
There is much more to be dealt with in the understanding of the business aspects of running an orthodontic practice but, I do not have space here to deal with more. However, this should give you a stimulus to start thinking about your own practicing career and how you might improve what you do, not least from the point of view of efficiency, efficacy and profitability.
The Dentistry Business is a three-man team comprising Lester Ellman and Carl Parnell, both highly respected practitioners with experience of both NHS and private practice and Sim Goldblum, a business executive with extensive experience in business planning, marketing and finance.
Website: thedentistrybusiness.com Email: [email protected]