I was with a group of doctors recently here on the Spear campus for an Occlusion in Clinical Practice workshop and we were working in one of the operatories. As you may be aware, in addition to the Spear hands-on workshops held here, cerecdoctors.com also offers courses on the use and implementation of CEREC CAD-CAM technology into the practice.

cerec cad cam roi

We have many CEREC machines in the lab and clinic. With so many around, it’s hard not to have some conversation about them regardless of the course.

I found a recent comment particularly interesting: “I’m not going to buy that thing, they try to sell it to you by implying that you can eliminate lab costs and that’s a lie. You just pay them, and it’s more than you would pay the lab. What a rip.”

Before I talk about my reply, I’d like to take a business moment, not something most of us were well-trained for. Return on investment (ROI), is a foundational principle in business; failure to pay attention to this reduces the profitability of the business and robs owners and employees of income and of opportunities to re-invest in the business.

​Understanding variable expenses and unit costs

When I speak with owners of CEREC machines I occasionally hear the statement, “I eliminated my lab cost” as one of the reasons for acquiring the technology and investing in learning how to use it well. That statement is technically correct; you aren’t sending a check to your technician for that restoration But it is financially incorrect; the cost has not been eliminated, it has been shifted.

Checks written to the technician are a variable expense. The amount varies depending on the number of units completed; it's a per unit cost. Complete one unit and your lab cost is “X,” complete 100 and it’s “100X.” When you invest in a CEREC machine, parts of that variable expense remain: the cost of the blocks, the diamond burs and the machine maintenance.

For our discussion, let’s say the block is $30, burs $10, and powder and distilled water $2, for a total of $42 per unit. (I’ve left out the costs of increased chair time and the potential for increased doctor time depending on how you complete design and fabrication as well as the savings on impression materials so we can do an easy example.)

The cost of using the machine to the business is a variable expense. It will increase (vary) as the use of the machine increases. The cost of having the CEREC machine and the subscription plan is a fixed expense. It will remain the same as the use of the machine increases. When you do more dentistry, your fixed expenses are reduced as a percentage of the whole, while your variable expenses rise as a percentage of that whole.

​Doing the math

If your CEREC machine payment is $2,000 per month and you do one unit with it, the cost of that unit of dentistry is equal to 100 percent of the variable expense ($42 in our example), and 100 percent of the fixed expense, for a total “Lab Fee” of $2,042 ($42+$2,000) for that unit.

The second unit you do that month changes the cost for each unit to $42+$1,000 (50 percent of the fixed expense) for a unit total of $1,042. Do 20 units and it’s $42+$100 (5 percent of the fixed expense) for $142. Do 40 units and, well, you can do the arithmetic. Pay off the machine and the only fixed expense to add to your variable expense is the subscription plan divided by the total number of units. When you upgrade to the BlueCam, like most of us did, we start the process over again.

​What does this mean for you and your practice?

It’s this calculation that determines whether or not a CAD-CAM system makes sense for your office. If you are not going to do enough with it to bring the unit fee equal to or less than the lab fee for your technician, it may not make sense; and I have seen some people come to that conclusion. This very simple example does not consider the benefits of single-appointment dentistry or the impression of being state-of-the-art that comes with CAD-CAM dentistry in the office. It is meant to help you see that ROI, return on investment, can only be calculated when you understand and apply some general accounting principals to your consideration.

The CEREC machine does NOT eliminate “lab fees!” What it does is create a situation in which you have the tools in place to reduce the lab fee per unit as you make use of the machine by shifting part of the lab fee to a fixed expense that is reduced over time as the debt is retired and the machine depreciated. I love having and using it!

(Click this link for more dentistry articles by Dr. Gary DeWood.)

Gary DeWood, D.D.S., M.S., Spear Faculty and Contributing Author


Comments

Sameer
July 24th, 2012
Great post Gary. As your office mate as well as one of the instructors for CEREC, your analysis is a great one. The only thing I would add is that in the financial calculations, you have to figure in the savings that are accomplished when you factor in the things that you eliminate with a CEREC appointment. Impression material can cost $25+ for an impression when you figure in the tray, impression material, mixing tip etc. A provisional can cost $15+ when you figure in the preop impression, the bisacryl, time to fabricate the provisional. You also can factor in the cost of no second appointment which can run $50+ just to seat the patient when you figure in overhead, supplies, time of office staff, insurance etc. Bottom line is that there are many ways to figure out if the financial commitment of CAD CAM is worth it, but the most important item is will you enjoy the procedures that you do more? Time savings for you and your patients and the opportunity to provide a great service can be important factor in deciding whether or not to invest in CAD CAM. Great post and glad you are enjoying using the CEREC systems we have at the Center.
John Sweeney
July 24th, 2012
Nice post Gary, I'm not sure if you would consider this a ROI but I think using the CEREC pushes you to become a better dentist. And that in turn, can pay big dividends when you consider remakes, chair time, etc. And what I mean by this is that it doesn't allow you to cheat. You see your preparations on the large flat screen in great detail. You see exactly how much clearance you have and if or where your restoration will be compromised. It really humbled me when I first began using it because I thought I was cutting nice preps. However, when you see your first couple on the CEREC, you soon realize you have some work to do on refining your preparations. At least it was that way for me initially. The cary over from using this machine has greatly influenced the way I prepare teeth in regard to both design and clearance, even when I'm sending the crowns to the lab. Lastly, I think when you fully embrace this technology, it gets you excited and sparks your interest to learn and grow in dentistry beyond CEREC. And, although the ROI can't be calculated in numbers for that, I'm sure it is huge in the grand scheme of things as you push yourself beyond your comfort zone.....
Gary DeWood
July 25th, 2012
EXCELLENT points Sam and John ....... Thanks! More reasons for thinking about how it fits into your practice now rather than later. As I just said to a Restorative Design workshop, "If you are planning to practice another 10 years you WILL have CAD-CAM in your office - the force behind that statement is my daughter Katie. She's a third year dental student, and CAD-CAM dentistry is there. Heck, in the preclinical lab, she scanned the first preps she attempted - to judge reduction and margins. In the clinic they have access to machines and are expected to plan several cases for them. (They don't have one for every student - yet.) For her, it will be a normal part of what she does, of what dentists do. As always - some of us are arriving later than others, but we'll all arrive.
Jon Smart
July 26th, 2012
I just had my blue cam delivered Tuesday, and I'm pretty excited! I had always thought that the Cerec prep was different than the non-Cerec prep. After learning what the recommended reductions guidelines really are (think Restorative Design) I realized I was wrong. Now, a month later, I'm working on my first CAD/CAM cases---I've been converted.
Gary DeWood
July 27th, 2012
Have fun and take pictures!
Walter S.tipton D.d.s.
February 19th, 2014
trying to sign up for 6 months digital learning for cerec.
Fairfax
August 27th, 2014
Hello all, Very helpful read. I just did a meticulous analysis of our Cerec experience so far (financially only) and here are our results: After ordering 1,143 Cerec blocks (E.Max only), our costs are $30 per block and $13.30 for everything else (burs, lube, filters, glazing sprays, pre-oven prep). So $43.30 for each Cerec crown. Using the ROI calculation method described in this post, we do about 90 crowns a month, so $22.22 for the machine cost and $43.30 per crown cost, for a total of $65.52 per crown. I'm pleased with the financial impact of Cerec ($66 per crown is better than the lab cost of $130!) and our assistants are happy that they are not doing temps and impressions, and our schedulers are happy that there is not a second appointment. I will say that I have to block out 120 to 150 minutes per Cerec appointment, which is higher than the suggested 90 minutes. So in place of a second appointment, more time is taken up by a Cerec appointment. Cutting through all the discussion, it seems to me that if you are doing about 1 crown per day, you will technically break even, but you won't really enjoy it. If you are doing 2 crowns per day (alone or with a partner / colleague / associate) then you will truly enjoy and value having switched to Cerec.
Greg
January 21st, 2015
All very interesting. As a dentist your time is very expensive. As an ethical person you need to balance what is right (the best you can do), with what is good for your pocket. A good restoration takes time no matter what tools you use to make it with. A good lab tech will always meet or beat a machine by itself. The ideal way is to combine a good dentist with good lab skills or good lab tech, with the use of the best tools. To only look to eliminate your local is a financial/ethical mistake. If you don't really care then join the ranks of dentists who outsource to cheap labs in third world countries, with workers who earn about $3.00/day. Your short term costs will be about $30/crown incuding shipping. Your long term costs, well what is the price of your ethics and continued destruction of the US lab profession?