Orthotown October 2013 - (Page 37)
feature // practice management
by Roger K. Hill, MSK
The very word “overhead” brings fear and dread to most
doctors’ hearts. It is universally viewed as the impediment
between top-line income and bottom-line profit, something
never really tamed, simply an ongoing battle.
It does not have to be this way. Viewed from the proper
perspective, it can be a useful tool in 1) the delivery of care to
patients, 2) providing an income and 3) building wealth.
We need to consider the true purpose of overhead. The
purpose of overhead is to generate income. Consider this: Even
a doctor with the most excellent clinical skills and an endless
stream of patients will never realize the potential without
spending money on overhead. Imagine arriving at your office
on Monday morning to find a full schedule awaiting you.
However, the office is dark and the staff are missing. All the
potential for success exists, but it cannot be achieved without
spending money on overhead – in this case, staff salaries.
Another way to view overhead is that it is the mirror image
of profitability. In other words, all of the income received by a
practice will ultimately be divisible into one of the following
categories: normalized overhead or profit items/benefits. The
sum of the two (whether expressed in dollars or percentages)
equals all of the income.
We will discuss the concept of profitability and its relationship to overhead, but before getting to that, it is necessary to
define the term “normalized overhead.” Normalized overhead
is the amount of money that must be spent in order to generate the income before there is any financial benefit available to
the doctor (in the form of salary, pension contribution, discretionary expenses, debt services, etc.).
Doctors often believe their normalized overhead is a higher
percentage than is actually the case. Normalized overhead does
include staff salaries, rent, dental supplies, laboratory expenses
continued on page 38
orthotown.com \\ OCTOBER 2013
37
http://www.orthotown.com
Table of Contents for the Digital Edition of Orthotown October 2013
Wired for Success: New Patient Workflow in the Digital “Paperless” Office
Orthotown.com Highlights
Lean and Mean Ortho: Cost-saving Measures in an Orthodontic Practice
Phase I Expansion/Retention
Corporate Profile: Ortho Organizers
New Products
Continuing Education: Treatment by Twelves
A Common Sense Approach to Six Percent
Overhead – Friend or Foe?
Ad Index
In Memoriam: Tribute to Dr. Craig Andreiko
Orthotown October 2013
https://www.nxtbook.com/farran/orthotown/orthotown-april-2024
https://www.nxtbook.com/farran/orthotown/orthotown-march-24
https://www.nxtbook.com/farran/orthotown/orthotown-january-february-2024
https://www.nxtbook.com/farran/orthotown/orthotown-december-2023
https://www.nxtbook.com/farran/orthotown/orthotown-november-2023
https://www.nxtbook.com/farran/orthotown/orthotown-october-2023
https://www.nxtbook.com/farran/orthotown/orthotown-september-2023
https://www.nxtbook.com/farran/orthotown/orthotown-july-august-2023
https://www.nxtbook.com/farran/orthotown/orthotown-june-2023
https://www.nxtbook.com/farran/orthotown/orthotown-may-2023
https://www.nxtbook.com/farran/orthotown/orthotown-april-2023
https://www.nxtbook.com/farran/orthotown/orthotown-march-2023
https://www.nxtbook.com/farran/orthotown/orthotown-january-february-2023
https://www.nxtbook.com/farran/orthotown/orthotown-december-2022
https://www.nxtbook.com/farran/orthotown/orthotown-november-2022
https://www.nxtbook.com/farran/orthotown/orthotown-october-2022
https://www.nxtbook.com/farran/orthotown/orthotown-september-2022
https://www.nxtbook.com/farran/orthotown/orthotown-july-august-2022
https://www.nxtbook.com/farran/orthotown/orthotown-june-2022
https://www.nxtbook.com/farran/orthotown/orthotown-may-2022
https://www.nxtbook.com/farran/orthotown/orthotown-april-2022
https://www.nxtbook.com/farran/orthotown/orthotown-march-2022
https://www.nxtbook.com/farran/orthotown/orthotown-january-february-2022
https://www.nxtbook.com/farran/orthotown/orthotown-december-2021
https://www.nxtbook.com/farran/orthotown/orthotown-november-2021
https://www.nxtbook.com/farran/orthotown/orthotown-october-2021
https://www.nxtbook.com/farran/orthotown/orthotown-september-2021
https://www.nxtbook.com/farran/orthotown/orthotown-july-august-2021
https://www.nxtbook.com/farran/orthotown/orthotown-june-2021
https://www.nxtbook.com/farran/orthotown/orthotown-april-2021
https://www.nxtbook.com/farran/orthotown/orthotown-march-2021
https://www.nxtbook.com/farran/orthotown/2021JanuaryFebruary
https://www.nxtbook.com/farran/orthotown/December2020
https://www.nxtbook.com/farran/orthotown/2020November
https://www.nxtbook.com/farran/orthotown/2020October
https://www.nxtbook.com/farran/orthotown/2020September
https://www.nxtbook.com/farran/orthotown/2020JulyAugust
https://www.nxtbook.com/farran/orthotown/2020June
https://www.nxtbook.com/farran/orthotown/2020May
https://www.nxtbook.com/farran/orthotown/2020April
https://www.nxtbook.com/farran/orthotown/2020March
https://www.nxtbook.com/farran/orthotown/2020JanuaryFebruary
https://www.nxtbook.com/farran/orthotown/2019December
https://www.nxtbook.com/farran/orthotown/2019November
https://www.nxtbook.com/farran/orthotown/2019October
https://www.nxtbook.com/farran/orthotown/2019September
https://www.nxtbook.com/farran/orthotown/2019JulyAugust
https://www.nxtbook.com/farran/orthotown/2019June
https://www.nxtbook.com/farran/orthotown/2019May
https://www.nxtbook.com/farran/orthotown/2019April
https://www.nxtbook.com/farran/orthotown/2019March
https://www.nxtbook.com/farran/orthotown/2019JanFeb
https://www.nxtbook.com/farran/orthotown/2018December
https://www.nxtbook.com/farran/orthotown/2018November
https://www.nxtbook.com/farran/orthotown/2018October
https://www.nxtbook.com/farran/orthotown/2018September
https://www.nxtbook.com/farran/orthotown/2018August
https://www.nxtbook.com/farran/orthotown/2018June
https://www.nxtbook.com/farran/orthotown/2018May
https://www.nxtbook.com/farran/orthotown/2018April
https://www.nxtbook.com/farran/orthotown/2018March
https://www.nxtbook.com/farran/orthotown/2018February
https://www.nxtbook.com/farran/orthotown/2017December
https://www.nxtbook.com/farran/orthotown/2017November
https://www.nxtbook.com/farran/orthotown/2017October
https://www.nxtbook.com/farran/orthotown/2017September
https://www.nxtbook.com/farran/orthotown/August_2017
https://www.nxtbook.com/farran/orthotown/2017June
https://www.nxtbook.com/farran/orthotown/2017May
https://www.nxtbook.com/farran/orthotown/2017April
https://www.nxtbook.com/farran/orthotown/March2017
https://www.nxtbook.com/farran/orthotown/2017JanFeb
https://www.nxtbook.com/farran/orthotown/2016_December_Orthotown
https://www.nxtbook.com/farran/orthotown/2016November
https://www.nxtbook.com/farran/orthotown/2016October
https://www.nxtbook.com/farran/orthotown/2016september
https://www.nxtbook.com/farran/orthotown/2016august
https://www.nxtbook.com/farran/orthotown/2016june
https://www.nxtbook.com/farran/orthotown/2016may
https://www.nxtbook.com/farran/orthotown/2016april
https://www.nxtbook.com/farran/orthotown/2016march
https://www.nxtbook.com/farran/orthotown/2016february
https://www.nxtbook.com/farran/orthotown/2015december
https://www.nxtbook.com/farran/orthotown/2015november
https://www.nxtbook.com/farran/orthotown/2015october
https://www.nxtbook.com/farran/orthotown/2015september
https://www.nxtbook.com/farran/orthotown/2015august
https://www.nxtbook.com/farran/orthotown/2015june
https://www.nxtbook.com/farran/orthotown/2015may
https://www.nxtbook.com/farran/orthotown/2015april
https://www.nxtbook.com/farran/orthotown/2015march
https://www.nxtbook.com/farran/orthotown/2015february
https://www.nxtbook.com/farran/orthotown/2014december
https://www.nxtbook.com/farran/orthotown/2014november
https://www.nxtbook.com/farran/orthotown/2014october
https://www.nxtbook.com/farran/orthotown/2014september
https://www.nxtbook.com/farran/orthotown/2014august
https://www.nxtbook.com/farran/orthotown/2014june
https://www.nxtbook.com/farran/orthotown/2014may
https://www.nxtbook.com/farran/orthotown/2014april
https://www.nxtbook.com/farran/orthotown/march2014
https://www.nxtbook.com/farran/orthotown/2014february
https://www.nxtbook.com/farran/orthotown/2013december
https://www.nxtbook.com/farran/orthotown/2013november
https://www.nxtbook.com/farran/orthotown/2013october
https://www.nxtbook.com/farran/orthotown/2013september
https://www.nxtbook.com/farran/orthotown/2013august
https://www.nxtbook.com/farran/orthotown/2013june
https://www.nxtbook.com/farran/orthotown/2013may
https://www.nxtbook.com/farran/orthotown/2013april
https://www.nxtbook.com/farran/orthotown/2013march
https://www.nxtbook.com/farran/orthotown/2013janfeb
https://www.nxtbook.com/farran/orthotown/2012december
https://www.nxtbook.com/farran/orthotown/2012november
https://www.nxtbook.com/farran/orthotown/2012october
https://www.nxtbookmedia.com