Compensation for dentists can be far more complicated than in most industries. Unlike many jobs, where you work for a set salary and may see an end-of-year bonus if things went really well, dentist compensation models vary greatly from practice to practice. There are many different versions of what your compensation can look like as a dentist. As you search for a position, whether in private practice, group, or corporate setting, be sure that you fully understand dentist compensation models and why they matter!
How and When Will You Get Paid?
There are many different models for how a practice pays its doctors. Your compensation may be calculated as a percentage of your production or collections (what the practice actually collects from patients and insurance benefits), or you may receive a set salary. Sometimes, your compensation may be a combination or hybrid. This means you’ll receive a set salary plus a small percentage of production or collection as well.
Dentist Compensation Model 1: Payment as Percentage of Collections
If you’re considering working for a practice that pays a percentage of collections, approach with caution. Unfortunately, there are times when patients or insurance providers fail to pay for services rendered. They may demand reduced fees or reject claims altogether. When the burden lands in the patient’s lap, they may be unable to make up the difference.
Regardless of whether nonpayment is negligent or due to hardship, at the end of the day, it can mean that dentists working for payment on collection are left in a lurch. This is one of the main drawbacks of running an independent private practice: you can only pay yourself once the bill has been paid. This type of compensation model also means you may have a long wait between completing the work and being paid. It can sometimes take weeks or even months to see a completed payment, which can leave you feeling anxious and frustrated.
Dentist Compensation Model 2: Payment for Production
Here at Community Dental Partners, we pay dentists based on their billable production. Payment for production can be a great motivator to expand your skills and also allows your pay to increase naturally as you grow in the practice. With our compensation model, you’re paid your billable production, regardless of when or if the insurance or patient pays. It means you won’t be left waiting for compensation while the practice argues with insurance providers or chases payments. Doctors shouldn’t be expected to work for free, and at the end of the day, it’s the DSO’s job to handle collections. After all, that’s one of the main benefits of working with a dental service organization.
Pay for production sounds clear enough, but there can be some variation within this dental compensation model as well. As we will discuss later in this article, be clear about what procedures actually count toward your production, as many practices will not include certain treatment items in doctors’ pay. The exact percentage paid will also vary. Your proportion may even change based on the individual type of treatment provided. Be sure to get a full breakdown, so you know exactly what to expect.
Dentist Compensation Model 3: Set Salary
There are some practices that prefer to pay dentists a set salary. This is very common in corporate dental settings. However, be sure to read the fine print before agreeing to a set salary contract. Some practices will lure new dentists with plush salaries, but if your production does not cover the full amount, you may be expected to repay the difference. This can be especially harmful in situations where you have limited autonomy over your patient roster, treatment planning, or scheduling, as your compensation is left largely out of your hands.
Additionally, be sure you fully understand how pay raises are managed. If you plan to keep the position for a long time, you’ll want to be sure the practice has a clear path for pay increases; you don’t want to be stuck at the same pay for years on end. Not only does that mean less spending power over time as the cost of living continues to go up. It also means little reason to grow as a practitioner, and that’s not great for career longevity or enjoyment.
Deductions: What Costs of Practicing Will You Cover?
If a potential employer presents you with an appealing offer, keep reading. While the salary may look tempting, or the percentage paid looks especially favorable, those numbers may be slightly misleading. Many dentist compensation models contain hidden deductions that can eat away at your take-home pay.
One big potential pitfall is lab fees. Many practices expect their doctors to cover some percentage of the cost for any lab-created restorations. That means the full-mouth rehab case that should set you up for a great paycheck can end up paying out a fraction of what you expected after the deductions for all those porcelains are taken out. Even if the practice has in-office fabrication such as Cerec, dentists may have to cover some portion of materials fees. This may even include materials for fillings and other procedures.
Materials and lab fees are just the cost of doing business, or at least that’s the way we see it. That’s why CDP covers lab and material fees for our dentists. This preserves full compensation transparency for you and allows you to plan the best treatment for your patients. We believe that patients’ experiences come first. Rather than looking to minimize your lab fees by compromising on quality, we want our dentists to plan and execute the best possible treatments for their patients.
Another way compensation models can eat into your pay is by failing to include some procedures under the doctor’s production. X-rays, cleanings, and other treatment items may be left out of your line items. However, it’s the dentist who must read and interpret the x-rays and build a treatment plan based on the images. It’s the dentist who has to oversee hygiene treatment planning and implementation. So why shouldn’t those things count toward your production? Here at CDP, they do!
Beyond the Paycheck: Contract Details Matter
As you consider employment offers, look carefully at the contract details. Be sure you know what questions to ask to ensure you fully understand the dentist compensation model of the practice. For example, gain clarity as to whether you will be counted as a practice employee or an independent contractor. Dentists hired as independent contractors may see a higher initial salary, but they will not be eligible for benefits such as healthcare or 401(k) in most cases. Additionally, independent contractors are responsible for paying their own taxes at the end of the fiscal year. That means you’ll likely be on the hook come tax season. You’ll have to set aside tax savings to prepare for these tax payments.
On the other hand, employees have taxes taken out before they receive their paycheck. That means less stress about covering taxes and maybe even a refund in some instances! Employees are also frequently eligible for benefits. Ask whether the practice provides health insurance benefits, 401(k) or other retirement savings, student loan repayment options, or other benefits. Not only does Community Dental Partners provide a great benefits package to our dentists (who, yes, are employees!), but we also give benefits that many other practices do not. This includes Continuing Education credits to make it as easy as possible to maintain your license and expand your skills.
Here at CDP, we believe in open communication and full transparency, especially when it comes to important topics like compensation. We’re also proud to have built a generous and thoughtful compensation model that serves our doctors and patients alike. Download our Lifestyle and Compensation Guide to learn more about compensation at CDP!