Doctor compensation

Doctor compensation is what the practice pays the dentist for clinical work, and it behaves differently depending on who is being paid. An associate is typically paid a percentage of their own production or collections, so their pay rises and falls with the schedule in a given day or month. An owner-dentist who takes a distribution from what is left over after expenses is being paid differently again, from profit rather than a fixed percentage, which is why owner pay does not belong in the same line as an associate's percentage-based pay when comparing practices.

This is also the line owners most often mis-file when they try to calculate break-even themselves. Doctor compensation looks fixed because a check goes out on a schedule, but for a percentage-based associate it moves with production exactly like supplies and lab do, which makes it a variable cost in the contribution-margin model, not a fixed one. Get that wrong and the break-even number comes out too low.

For an owner comparing their own take-home against the market, doctor compensation as a share of collections is also the cleanest way to see whether the practice is genuinely supporting the owner's income or whether growth is being financed by underpaying the doctor.