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Diamonds In Your Backyard by Dr. David Richter

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Diamonds In Your Backyard 

Discovering hidden practice savings for orthodontists

by Dr. David Richter

After practicing for 30 years in orthodontics, I feel I have a unique perspective on how I treated my practice as a business. Growing up, my father, who was raised during the Great Depression, always talked to me about financial independence and passive income. Over the years, while practicing orthodontics, I would look for opportunities to invest my money, but found that the learning curve took my focus off my practice. Too many shiny objects.

About six years ago, I had an accountant conduct a forensic analysis of my practice for the preceding six years. He said that based on industry standards, I had overspent by $2 million. Yes, $2 million!

I was so focused on growing my practice that I wasn’t paying attention to what I was spending—and the potential “diamonds” in my own backyard.

There are basically two areas of focus to access the diamonds in your backyard:
  • Growth
  • Reducing expenses

Growth and marketing
Early in most people’s practices, this is the primary focus. The real truth about growth is that it takes a lot of effort, and it starts with you. You must be the captain of your ship, paying attention to everything. You must lead your team.

Two books that helped me immensely in this area are Good to Great by Jim Collins and It’s Your Ship by D. Michael Abrashoff.

Marketing my practice has always been a challenge, especially in this digital age. I would typically allocate 10% of my revenue to marketing, which felt like a monthly donation from my bank account with minimal results. So many companies promised so much but delivered so little. All you want from your marketing is to bring people through your front door.

For this, I highly recommend Alex Hormozi. Read his books and plug into the business training he provides. In my opinion, he is the Elon Musk of entrepreneurial education.


Reducing expenses
The focus of this article will be mainly on reducing expenses because it’s the low-hanging fruit—the easiest to fix.

If you’re not paying attention to your money, it will go away. First, you must look at your profit-and-loss statements regularly. Bentson Copple Patterson & Associates (BCP) consultants have noted in talks and webinars that many doctors review their P&L only when their CPA sends quarterly reports—or even once a year during tax time. Their recommendation is to review expenses monthly, quarterly, and annually (see Table 1). Out of these expenses, the easiest ones to change are supplies and labor.
Diamonds In Your Backyard
Table 1: Targeted expenses

Supplies
When my forensic accountant broke the bad news to me, I dug in deep. As busy as we are with our practices, this isn’t something you want to do on your own. I delegated this task to a staff member and provided her with incentives—the more she saves, the more she makes.

We use Mari’s List. In our first year with them, we achieved a 40% reduction in supply costs, all while maintaining the same supplies. Big win!

For this position, find somebody who’s a little bit OCD—someone who loves to make things fit just so. This is important. Have them review everything you purchase to get the best deal. Make sure they’re keeping things supplied so you’re not running short; otherwise, you’re paying too much in shipping.


Labor
According to Invisalign practice advisors, a fully digital practice can have labor costs as low as 19%. The challenge I’ve faced throughout my career is finding the right balance of team members to foster and sustain a great culture. That’s a great practice builder.

At times when my labor costs were too high, I would cut team members. However, during the busy times, I was short-staffed, running behind, and missing things—not a great practice builder.

The key is having an extremely well-trained staff that understands procedures, especially when onboarding new team members. Constant training.


Efficiency in treatment
One of the things that I’ve seen completely overlooked time and time again in making our practices efficient is how we deliver our treatment.

Aligners
With aligners, utilize virtual monitoring to create more efficiencies. We use Grin, and it works great for us. After we deliver the patient’s aligners, they send a Grin Scope video every week before switching to their next set. The main thing we’re looking for is tracking, and we can pick that up early on.

Patients don’t come back in until they’re done with their aligners or if they need IPR. There are many ways to utilize this system, but that’s how we do it. We’re significantly reducing office visits and monitoring treatment more closely, both of which patients love. Having fewer office visits results in lower labor costs.

Custom braces
This has been a total game-changer for me. Currently, fewer than 5% of orthodontists in the country are using these.

How does this help your labor? With significantly reduced appointments.

I use the KLOwen bracket system and love it. My ideal protocol is 16 NiTi, 14x25 NiTi, and I finish in a 19x25 TMA with one or two detail appointments. We do 12-week intervals between wires, though there are obviously variations to this. I rarely need to perform a progress pano or reposition brackets, so I don’t have to back down the wire sequence and work through it again. If you’re seeing patients every six weeks and go to 12 weeks—and are finishing in fewer than 10 appointments—your schedule completely opens up. And you guessed it: fewer team members to deliver your system and lower labor costs.

The digital setup fee is higher than conventional braces, but it’s only about $500 per case, which is significantly lower than any other aligner system available.


Insurance
Early in my career, I was on every insurance out there. My mindset was that I just needed people to walk through my door and start treatment. My strong advice is to get out of network with insurance as soon as you can. If you’re doing a great job for your patients and have a great culture, your practice will grow.

Some insurance plans require a 40% reduction from your normal fee, which means you’re essentially working for free. When I got out of network, I didn’t see a reduction in my starts. It’s best to do it gradually, though—trust me on this. One year, I looked at how much we were writing off, and it was close to $1 million. If you’re completely out of network, that’s a great pay raise.


Rethink your space
With a smaller staff requirement, you no longer need the physical space you once did. I built a 6,700-square-foot building with 12 operatories and three new-patient exam rooms. This was right after COVID, and I just don’t need all that space. I used about a third of it for a med spa, and it’s been a great synergistic use. A pediatric dentist would be ideal for this kind of setup. By utilizing virtual monitoring and custom braces, you could easily operate in a five- to six-operatory practice.

We are in an amazing profession, but it’s important to be good stewards of our businesses. If you are, you’ll reap the rewards. 

References
1.Bentson Copple Patterson & Associates. https://bcp-advisors.com/initial-review-of-a-practice-opportunity.

Author Bio
Dr. David Richter Dr. David Richter is in private practice in Greeley, Colorado, and has been named a Top Dentist by 5280 magazine every year since 2014. Richter is a scientific advisor for KLOwen and a member of the American Association of Orthodontists, the Rocky Mountain Society of Orthodontists, the Spear Study Club, the Mountain West Dental Forum, and the Seattle Study Club. He also holds a patent for a visual articulator, which allows dentists to navigate 3D data to help correct jaw movement, and has a patent pending for an advanced retainer design.
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November 2025
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