How to Estimate Hygiene Production
Here’s how to estimate hygiene production of a dental practice.
contact us Work with UsHere’s how to estimate hygiene production of a dental practice.
contact us Work with UsWhat if you’re looking at a practice for sale, but you can’t see how much of the production comes from the doctor and how much comes from the hygiene? What if, for whatever reason, you can’t get detailed information about production before you have to make a decision on submitting an LOI?
Keep reading to see exactly how we at Dental Buyer Advocates estimate hygiene production without a detailed production report.
The rule of thumb in transitions is to have 25% of total production coming from the hygiene department in GP offices. 25%+ hygiene shows the practice has a consistent, loyal patient base and plenty of opportunities to find dental work for you to do.
If you think about it, after paying expenses, the income from a healthy hygiene department can often pay for the entire amount of the practice loan payment — a nice bonus!
When we provide our list of documents to request from sellers, we include a production by ADA procedure code (i.e. D0120, etc.) and production by provider (i.e. the owner, associate if applicable and hygiene).
More often than not, we are only given a Production by Procedure code report. So we can’t see who is doing the work. You’ll probably see the same thing when you shop for a practice. Below are the basic steps to consider when all you get is a Production by Procedure report:
While 25% hygiene is a good rule of thumb, I consistently see practices where anywhere between 15-35% production is produced by someone other than the doctor. If you did the math and are getting numbers higher or lower than that range, double-check your assumptions.
Using the general guidelines above, when we get the actual Production by Provider report, we’re almost always within 5% of the actual production.
And now you know how to do it, too.
Read More:
How Military Dentists Get Production Credit to Buy a Practice
Listen to this podcast to understand how to quantitatively analyze a practice for sale.