Current trends in compensation for dental hygienists

October 19, 2013

The past 10 years have brought many changes to the dental hygiene landscape. The supply and demand of dental hygienists has changed drastically due to the growth of dental hygiene schools all over the country. With that, the compensation of dental hygiene has also seen some big changes.

I went to dental hygiene school in Minnesota in the late 1990s. At the time of my graduation, there were only seven schools in Minnesota, and only one that was offering a four-year degree. Now there are more than 10 dental hygiene schools in the state and some are graduating two classes per year. Needless to say, the urban areas of Minnesota are saturated with dental hygienists, as are many other cities and states across the country.

The saturation of dental hygienists is also generating a lot of change in compensation models for dental hygiene. In my opinion, the changes are not so bad, as long as dental hygienists are committed to practicing to the top of their license and training … something we should be doing anyway, right?

Although the per-hour pay is still the most popular form of compensation for dental hygienists, this form of pay is witnessing a slight decrease in those areas where there is a heavy supply of dental hygienists.

Today, many dental hygienists participate in a commission-type structure of pay, which is a compensation model that is picking up popularity in dental practices throughout the country.

So, how should you compensate your hygienists?

There are several schools of thought ranging from hourly rates to base plus commission or full commission. There are benefits and challenges inherent in each method. Your selection of compensation plan should be based on finding the most balanced method for your practice, keeping in mind profitability, competitive rates, and personal incentive needs for the dental hygiene team. And, no matter the method, the focus of patient care is the highest priority!

COMMISSION: I have seen a lot of success with the commission style of compensation for hygienists, the practice, and the patient care that is delivered.

Commission pay is best calculated from the Adjusted Gross Revenue or the collections number. Using this, I have seen commission percentage ranges from 24-38%. And, the percentage depends heavily on your mix of business (insurance, write-offs, etc.). Commission paid from the UCR of gross revenue is an easy calculation for the hygiene team, but, depending on your collections and mix of business, it can cause fluctuations in your profit margin.

There is no doubt the commission structure provides an “incentive” for the hygiene team, yet it is often met with a lot of resistance. Why? Hygienists fear the unknown, the change, and how it will affect their personal finances … which is completely understandable. 

Before implementing a commission-style pay structure, the dental practice needs to set a strong foundation of protocols, systems, and support for the dental hygiene team. These measures will help ensure success for the team. Not only that, the management needs to be prepared for all of the questions and concerns the hygiene team will have.

And by all means, NEVER implement a commission style pay as a punishment or as a result of frustrations with your hygiene team performance. Instead, reward your high-performing team with a piece of the pie. Allow them to keep a piece of the production they bring to the practice!

NOTE: Be sure to check on your state’s labor laws about commission-style pay for your hygiene team. There is some specific language you need to be aware of before implementing this type of plan.

Base pay plus commission: The base pay plus commission plan is a good compromise to the straight commission plan.

The base pay is provided to the hygienists as a per-hour or a per-day compensation. This rate should be set well below the standard pay rate for hygiene, so an incentive can be built in easily. Production above this amount will be paid as a percentage of the adjusted revenue (or collections) they produce. This plan requires some modeling in order to find the right base and commission based on your geography and mix of services.

Base pay plus incentive: The other plan that has some popularity is the base pay plus incentive.

It is much like the base pay plus commission, but it is set up slightly differently. The dental hygienists will be paid their standard hourly rate up to a set daily production goal. Once hygienists exceed their daily goal, they receive either another $1-2 per hour, or they get a percentage of the overage. Although this plan sounds nice, it is often times a short-term fix as it does not continually motivate the hygiene team to perform at a high level.

What’s the ratio? As a general rule of thumb, dental practices will allocate about one-third of hygiene production for compensation. This includes gross salary, tax match, and all benefits. This should be what you want your outcome to look like when modeling your compensation plan.

WHAT YOU SHOULD EXPECT

I have heard dentists say that all the good hygienists are already taken. While that’s not true, it can seem that way when it comes to creating a strong working relationship with your hygienist.

Dental practices should expect high performance from highly compensated hygienists, and the truly great hygienists know this. The mark of a true dental hygiene professional is a proactive nature, accountability, and eagerness to contribute. This goes both ways … doctors should educate themselves on the expanding role of the hygienist and learn ways to open the lines of communications.

Building an appropriate compensation package is a foundational step in creating an outstanding, long-term relationship with your hygiene team.

The BOTTOM LINE

There are several hygiene compensation plans out there today, and they all have their advantages and drawbacks. The plan you select for your hygiene team needs to be one that you are confident in and happy with the outcome of patient care and financial outcomes for them and your group.

After helping over more than 200 dental practices implement commission style plans, I can tell you this … keep it simple for everyone. It needs to be simple for the hygiene team to understand, and simple for your accounting team and managers to calculate.

The more complicated the plan, the less result you will get. Honestly!

Second, be clear and transparent about the plan and help your team understand the benefit to the patient, to them, and to the business. They need to understand the entire structure and the “why” of the plan.

If you are seeking more information about hygiene compensation plans, please contact me directly via email Heidi Arndt @ Heidi@enhancedhygiene.com.