Preventive Orthodontics and Overhead

Many clinicians felt these procedures resulted in fewer extractions and reduced the severity of problems that remained to be treated later. Little concrete evidence was cited, however, with most respondents stating that their actions were based on "clinical impressions" or "serial records showing success."

Specific comments included:

• "Some patients, where space maintainers were not placed when indicated, end up with major problems."

What interceptive orthodontic procedures do you use, and at what ages?

Virtually all of the orthodontists reported using interceptive procedures, usually in the 7-to-10 age group. Correction of crossbites, both anterior and posterior, was by far the most frequently mentioned procedure. Other common interceptive techniques included reduction of severe overjets associated with Class II relationships and use of reverse-pull headgears or facemasks for Class III problems. Arch-length problems were addressed by a variety of methods, including serial extraction, lingual arches, and space-gaining appliances.

What percentage of your patients are in an interceptive phase?

The average response was 13%, with a range from 1% to 33% and a mode of 9%.

What evidence do you have that interceptive procedures eliminate a second stage of treatment or reduce the time required for a second stage of treatment?

Although many clinicians clearly felt that interceptive treatment reduced the time required for Phase II treatment, most had no direct evidence other than serial evaluation of their patients' records. Advantages such as better skeletal relationships, fewer extractions, diminished open bites, and reduced Phase II treatment times from 24 months to 12-15 months were commonly reported.

Some individual comments:

• "I tend to advocate an interceptive phase for moderate-to-severe dentoskeletal deformities where I feel that accomplishing all the treatment later in one phase may produce a less-than-desirable result, necessitate prolonged treatment time, demand too much cooperation from the patient, or relegate the patient to orthognathic surgery at an older age."
• "I don't have any evidence, but I like my results better, and I can reduce the number of extraction cases if we can start treatment prior to Es being lost."
• "Many patients end up with a satisfactory result and no need for future treatment."

What fee arrangements do you make for preventive treatment? for interceptive treatment?

Fee structures varied widely, with many offices giving only generalizations. Several practices charged for preventive care based on the laboratory fee and the estimated number of months that the patient would be seen; others charged a flat fee per visit. Interceptive treatment was charged at either one-third to one-half of the full treatment fee or a flat rate in the $1,000-$2,000 range, depending on the specific case.

One respondent said, "A fee is given for early treatment. Another fee is given for full treatment later that depends on the severity of the case at that time."

Do you monitor your expenses and look for ways to reduce or control overhead? If so, how often?

Fully 87% of the orthodontists reported monitoring their expenses; 58% did so monthly, 19% at least quarterly, and remaining 23% annually.

What is your current overhead rate?

The mean response was 56% and the mode 60%, with a range from 40% to 73% for a newly opened practice.

Do you have target figures for overall overhead rate and for categories such as staff, supplies, and rent?

Only 47% of the practices set any kinds of targets. The most commonly mentioned goal was to keep staff compensation within 19-23% of gross income. Another strategy was to set a target such as 55% for overall overhead.

Specific comments included:

• "Each staff member is responsible for an area of ordering and overhead. We regularly compare prices vs. service. We do not sacrifice quality in anything for price, so the target figure is not cast in stone. Our overhead rate is 45%."
• "I have used a firm that manages hundreds of professional practices in our geographic area. Their figures are helpful, as they know the market."
• "Assign each category a percentage of collections, and that's all that is spent without my approval."

What measures have you found most effective in controlling overhead?

Having the doctor keep a close eye on office expenses, including monitoring supply purchases and signing all checks, was by far the most common recommendation. The second most popular suggestion was to control the number of staff and their compensation, using cross-training and avoiding duplication of responsibilities. Other ideas included working hard to get the best discounts on purchases, keeping inventory low, and doing as much laboratory work in-house as possible. Several respondents said there were no particular measures that had worked for them.

Individual responses included:

• "It is difficult to control. We increase our fees accordingly."
• "I raise my fees every one to two years to keep up with inflation, and that helps to control overhead a lot."
• "Regular monitoring. Each staff member and I discuss their specific areas on an ongoing basis, not just once in a month."
• "I just run a 'plain vanilla' orthodontic practice. I don't buy every new thing that the journals advertise."
• "Don't have more staff than you really need, and cross-train them. Also, if I want to try something new, I only order small quantities despite the salesman's pitch to get a better price by ordering more."
• "Sharing space with a non-competitive specialist. Large purchase orders to achieve larger discounts."
• "I do not 'impulse buy' at meetings or when reps call. I personally review every bill that arrives in the office with my name on it. We do a monthly inventory of supplies and only buy what we need regardless of what's on 'special'."

What have been your biggest problems in controlling overhead?

Employee compensation, including both salaries and benefits, was considered by far the most difficult problem. Many offices said they were struggling to keep a dedicated, hard-working staff team while keeping the percentage of gross income allocated to employee compensation under control. The rapidly increasing cost of supplies--including OSHA-related expenses and the costs of starting a new office--was also frequently mentioned.

Some specific comments:

• "High-salary employees. I limit the number to two or three key full-time employees. The rest of the staff are part-time, and get less pay and fewer benefits."
• "Staff benefits--e.g., vacation time, health benefits, uniform allowance, pension contributions."
• "The cost of competent staff continues to increase at the same time as the revenue diminishes due to reduced fees from HMOs, PPOs, and increased competition, thus reducing the per-patient return."
• "Too much of an item ordered at one time, and staff thinking they should get 10% raises every year."
• "Reordering something we've ordered before and having the price jump--not going through a comparison pricing track with reorders as well as new items."

JCO would like to thank the following contributors to this month's column:
Dr. Steven A. Appel, Philadelphia, PA
Dr. George E. Black, Moses Lake, WA
Dr. Neil L. Blitz, Warwick, RI
Dr. William G. Davis, Chapel Hill, NC
Dr. Kevin W. Deeney, Watertown, NY
Dr. Thomas C. Francis, Burlington, IA
Dr. James W. Fanning, Albuquerque, NM
Dr. Duward T. Fulmer, Mauldin, SC
Drs. Anthony J. Furino and John M. Hamlin, New Hartford, NY
Drs. Frederick J. and Lisa M. Giarrusso, Worcester, MA
Dr. Myron S. Graff, New Port Richey, FL
Dr. Bruce S. Harris, Fountain Valley, CA
Drs. Christopher K. Kesling, Peter C. Kesling, and R. Thomas Rocke, Westville, IN
Dr. Gary W. Keyes, Cambridge, Ontario
Dr. Michael S. Klein, Kansas City, KS
Dr. William J. Koenig, Kirtland, OH
Dr. Paul H. Korne, Montreal, Quebec
Dr. David M. Lebsack, St. Joseph, MO
Dr. Maston R. McCorkle, Jr., Roanoke, VA
Dr. Don Miller, San Luis Obispo, CA
Dr. Vanessa A. Morenzi, Haddonfield, NJ
Dr. Richard D. Mulholland, Lakewood, CO
Drs. Stanley Pastor and Patrick D. Shannon, Tulsa, OK
Dr. O.H. Rigsbee III, Indianapolis, IN
Dr. Ralph N. Robbins, Niles, IL
Dr. William W. Robinson, Sherman, TX
Dr. Jerry L. Steinberg, Brooklyn, NY
Dr. Claude R. Stephens, Jr., De Soto, TX
Dr. Lennard Weiss, Toronto, Ontario
Dr. Robert B. Taylor, Asheville, NC
Dr. Joe F. Welch, Bartlesville, OK