The crown clock

In this episode

• Why overhead is a clock, not a percentage, and how to find your hourly number (a typical example is $350 an hour)
• The same $1,000 crown booked four ways: about $531 left at one hour of your time, $6 at two and a half hours in the main chair
• Fee versus time: a $900 vs. $1,000 fee is about $98; one hour of your production time is $350
• Moving crown seats to a second chair and letting the assistant drive the seat
• Using assistant time on the prep so your production time stays near an hour
• For associates: production vs. collections on a $1,499 crown
• Homework: time your next crown and put a number on it

Read the numbers in the newsletter: Your crown fee isn’t the problem. Your speed is.

Transcript

My fee for a crown is $1,499. My biggest PPO pays $950. By the time the lab, the team, the building, and the dentist who did the work got paid, the practice kept about $47. $47 on a $1,500 crown. Most dentists think the fix is a better fee. Well, it actually isn’t. The fix is the clock. Today, I’m going to show you how the same crown can make you $500 or lose you money depending on one thing. How much of your production time it eats. This is The Dental Grind. I’m Ryan Smith, DDS. I run dental practices, and every week I open up my numbers and show you how I work through them. Here’s the idea this whole episode is built on. Overhead isn’t really a percentage, it’s a clock. Your rent, your team, your equipment, your software, they cost you the same every hour the doors are open, whether that chair is producing or not. So let’s put a number on the clock. Take your monthly overhead and divide it by the hours that you’re actually seeing patients. I’m going to use $350 an hour as a typical example. That means every hour a crown takes of your production time, it has to bring in $350 before it’s made you a dime. Let’s take a $1,000 crown. After collections, call it $980. The lab bill is $99. Now, let’s book it three different ways. One hour of production time, $350 of overhead. That crown leaves you about $530 to pay the dentist and the owner. An hour and a half, $525 of overhead, now you’re at about $355. And here’s how a lot of offices actually book it. An hour and a half for the prep and another hour for the seat, both in the main chair, two and a half hours.

That’s $875 of overhead on a $1,000 crown. You’re left with about $6. $6 before anybody gets paid. Book it for three hours and you’re $170 in the hole. Same crown, same fee, same lab. The only thing that changed is the clock. Now let’s talk fees because that’s what everybody wants to fight about. Say your PPO pays $900 instead of $1,000. After collections, that’s about $98 less. It matters, but it’s under $100. One hour of production time is $350. So cutting one hour of your production time is worth about the same as raising your fee from $900 to $1,250. No insurance company is giving you that raise. Your schedule can though. And look at the top end. Even a $1,500 crown booked for three hours only leaves about $320. Book that same crown for an hour and it leaves about $1,000. The fee sets the ceiling. The clock decides how much of it you actually keep. So how do you get a crown out of your production time without rushing the dentistry? Well, here’s what I did. When I started out, I did my crown seats in my main production chair. I quickly found that it’s pretty expensive. So I moved my crown seats to a second chair, so I wasn’t tying up my main production chair. That one change helped my profitability dramatically. A seat is mostly assistant driven. The assistant takes off the temp and tries in the crown. And if it’s good, then I’ll adjust the occlusion, take the x-ray and even check flossing. Then when you show up, ideally it’s ready to cement. Put the seat in a second chair and your production time only holds the prep. That two and a half hour crown becomes an hour and a half of your time. On our $1,000 crown, that’s the difference between $6 and $355. And the hour you freed up, that goes to the next patient who needs you in the chair.

Then look at the prep. To keep a prep near an hour of your time, use assistant time and doctor time. The patient might be in the chair longer than an hour with an assistant, but that’s fine. What matters is that you’re not tying up your production time. That’s what matters the most. Speed isn’t the goal. Good dentistry is. But every 15 minutes of your time is almost $90 of overhead at $350 an hour. If you’re a year two associate, two things. First, find out whether you’re paid on production or collections. On a $1,499 crown, that collects $931. 30% of the fee is $450. 30% of what was collected is $279. Same crown, $107 apart. Second, you should watch your minutes. You may not pay the overhead yet, but the owner does. And someday, when it’s your building, you’ll feel that extra half an hour. Here’s your homework. Time your next crown, both visits. Write down how many minutes you were actually in the room, and how many the assistant handled. Then, take your office’s monthly overhead and divide it by the hours that you see patients. That’s your clock. Turn your minutes into hours. Multiply it by your clock, and you’ll know what the crown really costs to do. When you’ve done it, hit reply on the newsletter and tell me two numbers, your hourly overhead and how many minutes of your own time your crown took. I want to see how wide the spread is from office to office. Next week, the life of an insurance claim and how long it really takes to get paid for the work you do today. That’s the Grind for this week. The numbers from today’s episode and a few more are in the newsletter. It’s free at grind.dental. If this one helped, send it to a classmate or the associate down the hall. I’m Ryan Smith, DDS. That’s my name on YouTube and everywhere else. I’ll see you next Monday.