Continuing the Back9 Explainer
More Practices.
But More Profit?
What Would Prove the Operations Actually Improved?
Here's the distinction.
A dental group can report higher earnings simply by buying more
practices. To see whether operations improved, compare the same
practices over comparable periods, including the costs of shared
support and making those improvements.
Follow the example below to see what stronger operating evidence
looks like, and what it still leaves unproven.
Follow the improvement
A bigger dental group is only the start.
To test the operating story, follow a change inside the practices through to its measurable results, its costs, and what remains.
-
01
Same practices
Start with the same locations across comparable periods. Separate newly acquired practices from the comparison.
-
02
What changed?
Identify what was implemented: shared call handling, in-office crown production, or better billing and follow-up.
-
03
Measured results
Look for completed treatments, lab costs, and collection rates. More appointments alone do not establish more profit.
-
04
Costs included
Account for people, equipment, systems, and shared support. Separate one-time implementation costs from ongoing expenses.
-
05
What remains?
Compare earnings after those costs. Keep cash collections separate from accounting revenue so improvements are not counted twice.
-
06
Evidence you can test
Ask for consistent definitions, supporting records, and reporting dates. Check whether the improvement persists.
Hypothetical example only
Revenue rose. How much improvement remained?
The same practices, compared across two full years. No newly acquired locations are included. All figures below are invented to illustrate the comparison.
| Annual operating results | Before | After |
|---|---|---|
| Revenue | $800,000 | $840,000 |
| Practice operating costs | −$600,000 | −$610,000 |
| Ongoing shared-support costs | −$40,000 | −$55,000 |
| Operating earnings before one-time implementation costs | $160,000 | $175,000 |
Revenue increased by $40,000. But ongoing costs increased by $25,000. The improvement remaining after those ongoing costs is $15,000.
Now include the cost of getting there. If the second year also includes $8,000 in one-time implementation expenses, its operating earnings fall to $167,000. The improvement for that year is $7,000.
What this comparison can show
Whether the same practices generated more operating earnings after costs. Supporting records are still needed to establish how much came from the stated improvements rather than pricing, patient mix, or other changes.
What it does not establish
Whether those gains will continue, or what investors receive. Debt, fees, capital needs, and distribution terms still affect the investor outcome.
These figures are not industry averages, forecasts, or actual practice results. The simplified example excludes financing costs, taxes, and investor distributions. Practice operating costs and shared-support costs are separate categories here; implementation expenses are shown separately. This is an earnings comparison, not a cash-flow statement.
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