Keyphrase: Hygienist Compensation
Meta Description: A discussion on how to compensate hygienists and how much they should produce for that compensation.
Dr. Paul J. Pavlik, February 24, 2021
“She works hard for the money so you better treat her right.” – Donna Summer
I strongly believe that every doctor needs to have methods (i.e., benchmarks*) to measure how much an employee should get paid and what should be expected of that employee. This article is not meant to downplay the significant value that a hygienist can bring to your practice nor is it meant to jeopardize anyone’s pay scale, especially in today’s tough economy. It is, however, meant to provide a roadmap that might give you a plan to discuss, with your hygienists, whether they are reaching goals reasonable for their pay scale. In addition, it may prepare a foundation of information and statistics that will help you improve your practice and provide a solid basis for determining a staff member’s contribution to the practice and then, how much that staff member is worth.
* Definition – Benchmark: Performance goals by which a business’s success is measured.
How Hygienists Are Typically Paid
Hygienists are usually compensated according to one of the following methods:
- Hourly – The typical range we see with our clients varies from $30/hr to $45/hr. Hourly rates vary depending on location.
- Salary – The hygienist is paid daily, weekly, biweekly, or monthly. This can vary depending on the location and the hours worked.
- Percentage of Production/Revenue – This varies according to the doctor’s philosophy, but we believe a good rule of thumb is to pay at 1/3 of the hygienist’s production (more later). I am not in favor of paying a percentage of revenue since this method can be unwieldy, difficult, and most importantly, can hurt you financially if your practice supports PPOs and HMOs. If you want to discuss this further, please call or email me.
- Independent Contractor – Compensation is usually based on one of the above methods although the compensation is reported differently for tax purposes. For more information, click on the following link for this important blog: Employee vs. Independent Contractor – Be Very Careful
What Makes Hygienists So Valuable?
Aside from the significant value hygienists brings to the practice, what makes their contribution even more attractive is that, aside from the doctor dropping into the hygiene room to say “Hi” to the patient or to do a periodic exam or re-evaluation, the hygienist is producing passive income for the doctor, i.e., the doctor is making money in spite of doing very little to nothing for it. In addition, doctors can allocate their time to more productive procedures instead of spending valuable time cleaning teeth or doing non-surgical periodontal procedures.
It is essential that you measure, monitor, evaluate and adjust certain KPIs (i.e., Key Performance Indicators) in your practice at least every month so that you have a basis for sound judgment calls going forward. For example, for a hygienist, you will want to review how many days were worked each month, what was the average daily production, how many unfilled holes were in the schedule (Black Holes in the Schedule: A Major Production Killer – Part 1) and (Black Holes in the Schedule: A Production Killer – Fixing the Problem – Part 2), how much did that cost the practice, how much time was devoted to routine hygiene (prophys, etc.) vs. perio-based procedures, etc., etc.
First, consider how much it is costing you to run a hygiene department and your practice. I recommend that the average owner expect at least 33% profitability after expenses including hygienist compensation and other overhead expenses. In other words, before you have paid yourself and after you have paid all operating expenses, you should expect expenses to average no more than 67% of the receipts (income) and your profit (take home pay, benefits, insurance, debt service like loans, leases, etc.) should average no less than 33%. This percentage may be lower in a PPO/HMO practice.
If you use this philosophy on which to base profitability, then:
- A hygienist should be expected to produce (at UCR) three (3) times her salary. For example, if she is being paid $5,000 for a month’s work (whether hourly, salary, or % of production), you should expect her to produce at least $15,000 in services. If your practice sees PPO or HMO (CAP) patients, this will need to be adjusted. If you want to discuss this further, please call/email me or see ** below. Contact
- Likewise, the hygienist(s) gross salary (whether hourly, salary, or % of production) should not exceed 1/3 of her production. For example, if her monthly production was $15,000, she should receive no more than $5,000 in salary for that month.**
- Keep in mind that hygiene production, in order to meet both your production goals and the hygienist’s salary goals, can be significantly augmented by her ability to produce higher value procedures (e.g., root planing and scaling, perio maintenance, supportive periodontal treatment, desensitizing, bacterial enzyme testing, oral cancer testing, laser assisted decontamination, product sales, sealants, etc.). My benchmark recommendation for these additional procedures is that at least 40-50% of a hygienist’s total production should be from these additional “perio-coded” procedures, i.e., D4000 codes. For example, if the monthly production from hygiene was $15,000, at least $6,000 – $7,500 should be coming from D4000 codes.
- I recommend that you not include in your production calculations for the hygienist compensation procedures that only you, as a licensed dentist, are allowed to do (e.g., periodic exams). For example, if the hygienist produced $18,000 last month, but $2,000 was attributed to periodic exams, her production benchmarks would be based on $16,000 of production.
**Note: : If you plan on paying a hygienist or associate doctor a % of production and you have PPO plans, I recommend you either pay an hourly wage (since she is not responsible for your decision to belong to a PPO) or incentivize her by paying her a base hourly wage plus a % of billables (actual revenue you expect to collect). For example, pay her $40/hr (e.g., if her salary grosses $5,000/mo and she exceeds 3X that salary, i.e., $15,000, in billable production), pay her a 33% bonus for all billables over $15,000.
It is my hope that these recommendations might give you a way of discussing your goals with the hygienist; the targets and results should be reviewed with her monthly. If a hygienist is not given a set of goals (bulls-eye to hit on a target), she is shooting at the target with her eyes closed every month. If she is not shown the results of her efforts, she will not know if she has aimed at her goals correctly. What’s worse, she will not recognize her value in the practice. In addition, if she is producing significantly more than the goals, this gives you the framework on which to base a raise, a bonus, and/or most importantly, praise. This way, everyone is happy. Strive to develop a WIN-WIN-WIN philosophy in your practice — patients win, you win, and a valuable team member(s) wins. Remember the saying, “What gets measured gets done & gets done right!“
The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial advisor. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial advisor. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need.
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