Do you want to be known as the best dentist in town or the cheapest dentist in town? I would be happy being the second best rather than the cheapest.

Do you want to have a full waiting room and low profit margin or half full waiting room with high profit margin? Some practices pride themselves on having a large crowded waiting room. Very successful practices will have the large comfortable waiting rooms with fewer patients. The difference is high volume low profit margin vs. low volume high profit margin. It is a business decision.

Are your promotions giving away profits or investing for profits? I see some practices offering free exams, free cleaning or free whitening treatments. These are all to get patients in the door. Interesting, when we look at the retention rate from these promotions, it is quite low. Free is often worth what it costs you. It’s an old saying but applicable in our practice. If the patient won’t pay for the service, then they most likely do not value the service.

Patients often do not follow through with comprehensive care… which is the reason for the promotion. The practice gives away profit under the illusion of advertising or marketing. Patients who are looking for free service will move on to the next free offer. People who are looking for quality care are not looking for the free services. They want you to earn their respect for your services, your talents and how you plan to help them. That respect will generate more new patients for the practice than free whitening.

Would you prefer making 100K per year doing 1million in revenue or 100K per year doing 245K per year in revenue? To generate $1million a year, you would have to work 5 days a week with a full staff. To generate $250,000 per year, you would work 1 day a week with a one day a week staff.

Most doctors would opt for working one day a week for the same money that they would get working 5 days a week. The difference in the two models focuses around fee schedules and what you think your services are worth to your patients.

Do you want to be known as the best dentist in town or the cheapest dentist in town? If you are known as the best dentist in town, then you feel that your patients value your services, respect your talents, and are willing to pay for them. You are willing to tell your patients what they need to hear rather than what they want to hear.

Telling the patient that they may have to invest $5000 to restore their function is telling them what they need to hear. Opting to only give them the cheaper option is telling them what YOU think they want to hear. Most patients want to hear all the options and then make their own decisions. Based on their understanding of the wisdom of your recommendation and the value of your service, they will make a decision to invest in their treatment.

If you are known as the cheapest dentist in town, they will expect cheap. They may demand quality but will accept mediocrity because they know you are the cheapest guy in town.

This brings us to the next element in the economic model in our practice. Have you ever had a patient tell your team that “my insurance company said I’m covered?” The third party carrier has more credibility regarding our treatment plan than we do. Our treatment coordinators deal with this every day.

The doctor develops the treatment plan and the patient agrees that this is the best way to go. The insurance carrier suggests “the least expensive alternative treatment plan.” The patient can still opt for the best treatment plan but the insurance carrier has another idea…and they did not examine the patient.

If you are known as the cheapest dentist in town, the patient will get what the insurance carrier recommends. If you are known as the best dentist in town, the patient will get what the doctor and patient agree is the best treatment.

How does all this tie into the business side of running a practice? Let’s look at the economics of running a practice.

Annual Revenue 60% Overhead 30% Ins Discount Net Profit Work Week
$1,000,000 $600,000 $300,000 $100,000 5 days
$250,000 $150,000 $0 $100,000 1 day
$1,000,000 $600,000 $0 $400,000 5 days

A wise man told me, “Go where you are appreciated and not where you are tolerated. You will do the same work but will help more people when they appreciate what you can do for them.”

People (patients) who respect your talent and appreciate what you have done for them will talk about your work not your fees. Their loyalty will be based on your talent…your service. They will compare how you helped them with how some one else might have helped them.

People, who want cheap, will only discuss your fees and not your talent. They will compare your fees and go for the cheapest. Loyalty is a function of price and not service.

The third party carriers sell quality to their clients but demand discounts from the providers. Can you imagine telling the plumber who just handed you his bill that the neighbor (third party) said that he should give you a 30% discount? Your pipes will leak.

This is what the third party carriers are doing to the dentists. It has already happened in the medical profession. They want the same level of treatment but for 30% to 40% of the UCR fee.

As a professional, we will not give substandard care. We can, however, expect to be paid for the services that we provide to the patient. As the model above shows, we can make the same amount of money working 1 day a week on a fee for service as we would make working 5 days a week working with third party fee schedules.

The money that is in the pot for dental health is a fixed amount. The third party carriers must administer the plans and also make a profit. That money comes out of the pot. The more that they can reduce payments to the providers, the more money is in the pot for treatment or profits. The insurance carriers get their money first.

What’s the answer? Patients must recognize that dental coverage is not a true insurance. It is a fixed amount of coverage per year. The carrier can increase the value by contracting with providers who will work for less…who want to be the cheapest. The quality of care may be compromised.

Providers (doctors) must recognize that there is fixed cost to running an office. If your fixed cost is 60% and you discount your fees by 30%, you are working on a 10% margin and your practice will gradually fail. Providers should run their individual practice as a business.

Patients should see their annual benefit as a $1500 contribution toward their dental care and be willing to pay the reasonable and customary fee difference. Patients will benefit by seeking quality care rather that the cheapest care.

Providers who opt to serve patients as out of network providers will have patients who respect their talents and treatment recommendations. Their practices will be more stable and profitable. They will have the options to provide care for those who need care that might be beyond their means.

Running a successful practice is no different than running a successful business. Income has to exceed expenses. Most doctors can start their practice but the challenges lie in growing and staying in practice. The landscape is changing and we have to change with it. We, as clinicians and businessmen and women, must keep up with these changes and work to anticipate what is ahead.

Dental Specialists of America LLC works with practices to develop profit centers within the existing practice. One way to increase profitability is to add specialty services within the practice. For more information on improving the profitability in your practice, go to or Make it a great day.

Dr L