What this practice
actually paid
to get paid

This is one statement out of 500.

The Dental Drilldown®: The Benchmark Study analyzed the 500 most recent merchant statements reviewed by Dental Card Services, representing more than $380 million in annualized credit card processing volume. For each one we calculated the effective rate, then compared it against a low-cost interchange cost-plus program. This case study is one practice pulled from that set. If you have not read the study, the figures below put this practice in context.

Where this practice fell.

Across all 500 statements, 99% had lower effective rates than this practice. Even among the 86 practices on the same surcharge program, 99% had lower effective rates than this practice.

The figures above are the share of practices with a lower effective rate than the practice in this case study. Practice rank is based on effective rate, with No. 1 being the highest.

It comes down to one number.

There is a high degree of variability in how credit card processing statements present their billing programs, rates, and fees, which at times can make analysis, let alone benchmarking, very difficult. The effective rate calculation provides that clarity by rising above the noise, as it is simply the total fees a practice was charged divided by its total credit card processing volume. This is precisely the logic we followed for the 500-statement benchmark. For this practice, it was 15.57%.

$2,424 in annualized savings is bigger than it looks.

These savings are pure profit, so they represent $2,424 in additional practice EBITDA (earnings before interest, taxes, depreciation, and amortization). What does that mean for your practice? How much dental production would it take to generate a comparable amount, and how much practice value does it create?

And as the practice grows, so do the savings.

The $2,424 is based on today's processing volume, and that volume rarely stands still. Most dental practices grow year over year. Insurance keeps covering a smaller share of each bill, leaving more for the patient to pay. And patients pay by card far more than cash or check, a share that keeps rising. Because the savings are a fixed share of credit card processing volume, all three trends push the annual figure higher. $2,424 is the floor, not the ceiling.

Year 1 is the measured savings of $2,424. Later years are illustrative, assuming annualized credit card processing volume grows about 6% a year from the three trends above. At that pace the annual savings reaches roughly $13,134 by year 30, more than five times where it started.

Invested over a career, those savings can grow past $390,000.

The savings does not have to sit idle. Routed into a tax-deferred plan each year, it compounds well into six figures over a thirty-year career.

About the Author

Alex Sadusky is the founder and CEO of Dental Card Services Alliance, LLC, the firm that publishes The Dental Drilldown. He founded the company in 2009 and has spent almost two decades in the dental industry, including leadership positions at Dentsply Sirona, and as co-founder and CEO of TruBlu Dental Management, which he grew into one of the largest platforms for independent dentists in the United States. Under his leadership, Dental Card Services has been the preferred credit card processor for the Academy of General Dentistry's Exclusive Benefits program for more than twelve years. He also serves on the Board of Directors of Fortune Management, the country's largest dental practice management coaching platform. Prior to founding Dental Card Services, Alex worked in venture capital, investment banking, private equity, and management consulting, including at McKinsey & Company. Through The Dental Drilldown, he translates complex financial and operational topics into clear, practical guidance for independent practices.