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Improving Your Bottom Line Jessica Lynch

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by Jessica Lynch

Orthodontists are feeling the squeeze. The struggling economy has pushed down the demand for orthodontic services. After covering monthly bills, many consumers are left with little money to spend on non-essentials. Although most would argue that oral health is indeed something that should be considered essential, the truth is that orthodontic treatment has become something of a luxury item for the average American family. Meanwhile, expenses are up. Technological developments such as 3D imaging and panoramic scans make orthodontic treatment more efficient, but also more costly.

This pressure on practices is backed up by data, which show that doctors' personal incomes are being directly impacted. According to the most recent figures from the Journal of Clinical Orthodontics, the average orthodontic practice saw expenses rise by $62,500 between 2007 and 2009. During the same time period, the average doctor's net income fell approximately $20,000.

How can orthodontists find some breathing room? Certainly, turning around the economy to increase demand is beyond your powers. But what you can do more easily is cut spending. By finding and eliminating excess in your expenses, you can retain and redirect that money into attracting new patients and growing your business, or into your own wallet. But be careful. If you start cutting expenses without foresight or strategy, you risk doing damage.

Budgets and Benchmarks
The first step in making wise cuts is to get a bird's-eye view of your practice's expenses. How much is your practice spending on property costs, employee salaries, services, supplies and so on? What are the percentage breakdowns in each category? You might not even know. Compiling and analyzing these numbers for the first time can be a daunting endeavor, but you can't really start making decisions about cuts until you understand your outflows.

Your allocations to each category will vary on your particular market, your client base and other factors, but developing your own personal benchmarks and budgets will give you a solid framework on which you can base decisions.

Property Expenses
Rent for your office (or a mortgage if you own) is a fixed monthly expense with no wiggle room unless you're willing to decamp to a less expensive space. But not all property-related expenses are immutable. While it's important to maintain sanitation standards, cleaning, landscaping and other maintenance expenses that do not affect patient flow can be scaled back. For example, if your practice is paying a cleaning service to come in several times a week, the frequency could be reduced to once a week or even every other week. Your employees should assume some general daily housekeeping duties to pick up the slack.

Staff
Fundamentally, your practice needs great team members to be successful. But it might not need as many team members as are currently employed. The norm in many orthodontic practices is to have a "just-in-case" staff member – a person to fill in when another is sick or on vacation. Is that extra person really necessary? Ideally, when someone is out, the others should be able to pull together and cover the extra duties for a short while. By cutting out the just-in-case employee, your practice can save between $38,000 and $52,000.

To avoid the emotionally difficult decision of letting someone go, some employers around the country have chosen to instead cut all their employees' hours across the board. These types of decisions, however, tend to harm employee morale and motivation more than cutting a single person does.

At the very least, you should begin by speaking openly with all employees about the practice's financial situation. Make a joint effort to cut expenses and bring in business. Set goals together and award bonuses for goals achieved. After all, your staff might be able to identify waste that you've overlooked. By recruiting them as partners in your financial goals, you'll give your team more ownership in your practice which leads to improved morale.

Purchasing
Without proper inventory controls, you'll end up ordering redundant supplies that are already stored in excess in a back cabinet. On the other hand, when you suddenly find you're low or out of something you need, you have to pay a shipping premium because your order won't meet minimums. So know what you own, and designate one person in office for purchasing, organizing and storage.

Small reductions in purchasing might seem inconsequential at first, but they make a difference when examined on a yearly basis. By keeping your inventory lean and mean, you'll have extra cash reserves that can be invested in your business instead of sitting unused on the shelf.

Business Services
When you opened your practice, you most likely signed up for business services such as Internet connectivity, phone lines and credit card processing through different providers. Next up in your quest to cut expenses is to re-examine what your practice has been paying all these years. The packages you've had might no longer be great deals. If they're not already bundled, consolidating different services under one company can often translate to a savings of hundreds of dollars each month.

I know of a practice that had been using phone and Internet services without a contract. By signing up for an annual contract, the practice brought their monthly costs down by about $240, or about $2,900 a year.

Advertising and Marketing
How do your new patients find out about you? If you don't know, you should find out. Train your staff members to ask new patients when they sign up for treatment. Keeping an accurate account of where your patients are coming from – whether it's because of an ad, online marketing or a referral from a doctor or a friend – will help you make informed decisions. You'll understand what is working for your office and what isn't so you'll be able to effectively allocate your time and money.

Though cutting expenses will shore up your bottom line, too much cutting can damage your practice. Be sure to cut excesses, not essentials. How can you know the difference? As a rule of thumb for each decision, ask yourself if the cut would make it more difficult for your practice to attract new patients or if it would harm patient care. If you answer no to both, it might be unessential and a good thing to cut.

There are several ways to keep spending under control and increase profits. This most likely requires adapting and recognizing that what has worked in the past might no longer apply. Making informed decisions on the management of your practice and business plan using the resources already in your hands, will bring you to your fullest potential today and continue your growth in the future.
Author’s Bio
Jessica Lynch is the director of business development for OrthoSynetics (OSI), a business services firm that assists orthodontic and dental practices utilizing a full-service, turnkey management approach to address all non-clinical practice functions to gain better efficiencies and profitability. Services are also offered on an a la carte basis. For more information, visit www.orthosynetics.com or e-mail sales@orthosynetics.com.
Orthotown Magazine
September 2025
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