Last year, we saw a significant increase in the number of offices leveraging our services and our wonderful talent to support sleep dentistry. As always, we want our offices and talent to succeed. So, we decided to talk to some industry experts and dive into the data surrounding sleep dentistry.
As offices increasingly offer this service, we wanted to know:
- Is it worth it?
- What are the real, tangible financials involved in starting sleep dentistry?
- Is it surefire (i.e., do most dental offices find value in it, or just a few?)
- What are the profit margins?
- And, most of all, what\’s the honest ROI?
So, let’s put it to the test. Here’s everything we\’ve learned about sleep dentistry. We’re an unbiased source, and we want to give you the honest truth.
The Truth Behind Procedure ROI
Before we even start, let’s take a moment to talk about something important: procedure ROI is insanely variable. In our experience, dentists that succeed look at monthly revenue, focus on keeping costs low, and spend time and energy increasing their capacity. The truth is: every dentist is different. Some are faster, some are more meticulous, etc.
In addition, we don’t ever recommend thinking of procedures on a per-cost basis. Instead, integrate high-revenue procedures into your office naturally, and provide the best possible experience to your patients. That’s what really grows offices.
Now, onto the meat.
A Look into Dental Sleep Medicine
Not to be confused with sleep dentistry, sleep medicine dentistry is focused on treating sleep-related conditions that involve the mouth (e.g., sleep apnea, snoring, xerostomia, hypersalivation, GERD, orofacial pain, etc.)
Truthfully, +90 percent of dental sleep medicine patients will have apnea. Part of this is due to the sheer prevalence of sleep apnea. According to the AASM, 26 percent of adults between the ages of 30 and 70 have sleep apnea. Around 80 percent are unaware of their diagnosis, and many (if not most) will never get a diagnosis from a physician.
The role of dentistry in the diagnosis and treatment of sleep apnea is an area of ongoing study. While CPAP machines remain the most common treatment for those with sleep apnea, many patients struggle to use these machines regularly, and a significant chunk of patients outright refuse to use CPAP or are not adequately assisted by these machines.
Dental appliances are increasingly important in the treatment of sleep apnea. These include mandibular advancement devices, mouth guards, tongue-retaining devices, and a variety of other dental appliances. Current research suggests that these devices are highly effective for mild to moderate sleep apnea, which accounts for the vast majority of apnea patients.
Importantly, dentists are playing an important role in the treatment of sleep apnea patients. Despite the vast majority of physicians recommending CPAP machines by default, millions of Americans are finding dental sleep medicine to be a gateway to relief without noisy and complicated machinery.
Now, let’s discuss the economics of these treatments. According to a Dental Economics interview, the net income for each device is around $3,000. Unfortunately, that same article interviewed a doctor (Dr. Jay Neuhaus), who noticed a $4,000 net return for dental sleep medicine device fits. This particular doctor only paid himself, his wife, and his assistant. He dedicated two days a month to his dental sleep medicine practice. So, it’s a relatively low-volume and low-cost operation. This $4,000 net ROI number has since been copied across dental articles. It’s not particularly accurate.
Most of you probably won’t hit that ROI. That said, the revenue is still fantastic. But there’s a real commitment as well. Dental Economics also interviewed a ton of dentists in the United States, and they have a chart that showcases the average reimbursement per device, and the expected revenue.
100 patients a month will net you a cool $3.6/million in revenue per year. But don’t get overly excited. There are plenty of costs that go into sleep dentistry. You’ll probably need to pay a sleep coordinator and provide training for both dentists and assistants/hygienists. In addition, most create a new LLC to provide the service, which comes with extra marketing costs, the cost of using operatory rooms, and taxes.
So, what do the financials of that look like?
The cost of employees
The average salary for a sleep coordinator in the United States is $51,118. In Canada, that cost is around $48,000. You’ll need this coordinator to assist in administering at-home sleep tests and recording patient sleep data.
In addition to this sleep coordinator, you’ll likely need an extra hygienist to help you with these patients. Unless you plan on doing this full-time, we highly recommend leveraging proactive staffing or temporary employees to handle your regular hygiene duties while you and a full-time hygienist focus on these new opportunities. If you do it this way, you won’t really lose any ROI. A good hygienist should produce around $1,800 a day (or around 2.5 to 5x the cost of the hygienist).
Most dentists get accredited through the AADSM. It’s $6,000 for AADSM certifications for Master Level 1 and Master Level 2. In general, US & Canadian dentists (AADSM accredits both) can expect to spend around $3,000 – $10,000 on accreditation and training — depending on how much you do.
Of course, those figures only involve the dentist. Staff will also need to be trained. While this cost is variable, you can expect around 2 full days of missed work per employee (opportunity cost). If we assume the average hygienist makes $1,800 per day, that number comes to around $2,600 for hygienist training. Assistant training will likely fall a little lower, probably around the $1,000 – $1,500 mark.
Proactive staffing can reduce some of these costs. But there’s also a hidden barrier here. To practice dental sleep medicine regularly, you’ll need a semi-dedicated hygienist, which will likely require a new hire. Given that we’re in the middle of the worst staffing shortage in history, finding one isn’t always easy.
This is a huge bucket. The average dental office spends anywhere from 2 to 5 percent of revenue on marketing. But the population that needs dental care and the population that wants sleep medicine are very, very different.
Let’s get this out of the way: doctors are not going to refer patients to your practice. They will likely always recommend a CPAP machine, regardless of circumstances or patient.
You will be responsible for seeking out potential patients. Easier said than done. These patients have to both have sleep apnea (80 percent don’t even know they have it), and they’ll have to be willing to try sleep dentistry. Despite robust research proving its effectiveness, most people still have no idea what sleep medicine dentistry is, or that it’s even an option for them.
Your marketing costs will be much higher than 4 to 5 percent of revenue. We would expect closer to 10 to 15 percent. These costs may go down over time (especially if you’re in a less competitive area). But we expect these costs to always remain a little higher than baseline dental costs. Not only are you going to pay more for ad targeting and clicks, but you’ll have to hustle to deliver targeted ads and materials to a unique population.
When you’re fitting a patient with a sleep device, you could be doing dentures or aesthetics instead. You’re not getting $3,000 per device. You’re getting $3,000 – costs – opportunity costs. If you could do a maxillary denture for $2,100 during this time instead, you’re only actually earning $900. Obviously, this gets more complicated (highly dependent on your population and patient needs). But it’s safe to assume you could earn at least 1/3rd of this fee during regular work hours.
In addition to the costs above, there will be some minor costs associated with:
- Setting up an LLC
- Creating logos and branding
- Doing additional taxes
So, where does this leave us?
As The Profitable Dentist puts it: “99% of dentists don’t make it in sleep medicine.” You have to put forward an investment. And it’s time-consuming. Dental sleep medicine can make very, very good money. But you have to approach it with a game plan. And don’t expect to just start making $3,000 pure profit per procedure.
WORKFORCE Gives You the Talent You Need to Tackle New Procedures
Looking to mix some new procedures into your office in 2022? We’ve got your back. WORKFORCE provides temporary and permanent dental talent to offices across Canada and the United States. Want to tackle new challenges with the right staff?