Associate Pay for Invisalign
This article addresses two factors related to Invisalign:
- Should I offer it in my general dentistry practice?
- How should I pay an associate that does Invisalign?
Should I offer Invisalign in my general dentistry practice?
Many of our general dentists are asking us about Invisalign. Should they introduce it into their practice? Our answer is this: Invisalign may be profitable for you. The answer is determined by how deep of a plunge you take with Invisalign, and whether it fits within your overall practice clinical philosophy.
If you’re already providing traditional bracket-based braces, you may be nervous about the increased labs for Invisalign. With comparable patient fees on both, it’s no secret that the related lab and hardware costs are much greater for Invisalign compared to traditional orthodontics. Those who are producing results with Invisalign, however, estimate a reduction in total case treatment time by approximately 50% for Invisalign. As I’ll discuss later in the article, the quantity of treatment you provide, and the related Invisalign discounts reached, is a key factor in determining whether or not to switch to Invisalign.
If you don’t offer orthodontic treatment, offering it will require a shift in your practice culture. To make this a worthwhile investment, your staff must be committed. Staff training and education will be important. Especially since change can be difficult for team members to accept.
The amount of Invisalign production you’re performing is going to have a direct impact on profit margins, specifically with regard to the Invisalign costs. Invisalign labs are offered at a discount that increases significantly as you meet each pre-determined volume benchmark. So, if you go Invisalign, then go in for the win. If you’re not receiving the max discounts (18% will not cut it), then the overhead costs, labs, and associate pay (if applicable), make Invisalign questionable. It’s key to target the higher discounted tiers. If you can’t achieve them, then we don’t recommend Invisalign for your practice. Instead, you should focus on your core treatments.
How should I pay an associate that does Invisalign?
Now let’s consider a scenario where you have an associate that is Invisalign certified and wants to do Invisalign. The compensation structure of your associate performing Invisalign is critical. We recommend that you update your employment agreement with your associate before he or she performs any Invisalign treatment. We recommend that your associate is compensated as a percentage of Invisalign collections, which should be spelled out in that agreement.
The following recommendations will help make Invisalign more profitable for your practice, and also properly incentive your associate:
- Collect 100% of the payment up front. Cash and check payments will be honored with a 5% discount. No discount should be given for any credit card payments.
- That said, flexible payment plan options (i.e. Care Credit or Lending Club) can be offered. If you do, limit the payment plan to 12 months, thereby reducing the discount to you.
- If paying your associate on collections is too complicated, we encourage clients to stagger their associate Invisalign pay at incremental points during the treatment period. Payment of 25% at the start, 25% at the estimated midway point, and 50% upon case completion is a reasonable methodology.
Below are two options based on the employment status of the associate:
- Option A: The associate is a W2 employee. The practice collects the patient fee and remits compensation to the associate.
- Option B: The associate is an independent contractor and collects the patient fee in his/her own bank account, then remits a portion of that fee back to the owner doctor.
I’ve used compensation rates from owner to associate, and from associate to owner, in the two scenarios to equalize the net profits to both owner doctor and associate. A few notes:
- In option A, you’re paying the associate 35% of the difference between the gross fee and the Invisalign lab.
- In option B, the associate is paying you 49% of the gross patient fee (no reduction for labs). This higher rate to you (than you pay the associate in Option A), is to account for the additional indirect overhead that you’re paying (assistant, front office, operatory space, and other fixed costs).
Most doctors will opt for Option A (perhaps even if the associate is paid as an independent contractor!). They don’t like the idea of the associate collecting the patient fee. However, we have seen some cases that follow Option B.
Also, notice that the Invisalign cost is 25% of the gross patient fee. It’s critical it be at that level or lower. Otherwise, offering Invisalign may not be a profitable proposition.