Copyright © 2010 Chick Cowan
Medical gas is a standard expense item in most dental practices. What most dental practitioners do not know is that there are wide variances in pricing depending on the source - perhaps as much as 30% to 40%.
Are you purchasing from a local industrial gas supplier? Or are you buying from a major medical gas distributor? Does your supplier manufacturer the gas they are providing or are they a reseller? Most dentists have not evaluated the source of their medical gas in relation to its expense.
Since the average dental office spends $1,200 to $1,600 annually on medical gas, Oxygen and Nitrous Oxide primarily, a practice would be well served to evaluate this expense. With a proper assessment of your business requirements, annual savings of $400 or more can be developed depending on your volume.
There are many factors that must be evaluated for an accurate assessment since some of the expense is variable and other portions are static.
The factors that influence medical gas expense are:
Product Cost
If you are a high volume user, then the product replacement expense and fees associated with delivery will be more important. Low volume users will find that tank rental charges can become the more significant variable depending on how many tanks you have and what the sizes are.
There are two sizes of tanks used in dentistry for both Oxygen and Nitrous Oxide. There is the small cylinder, called an E-cylinder, and there is a larger tank called an H-cylinder. The smaller cylinders are wheeled from chair to chair on an as needed basis. The larger cylinders are generally grouped in a storage room and the medical gas is piped to each patient location. The cost of product refill is proportionally higher with the smaller tanks because of economies of scale associated with the cylinder re-charging.
Small cylinders are best suited for dental practices with low volume requirements. Since delivery fees and often tank rental fees are constant with service for both small and large tanks it is more economical to utilize large tanks if the volume of gas usage is high. Also the cost of the product refill becomes more important with large volume users as price differences are multiplied.
Tank Rental
A monthly tank rental is charged when the supplier retains ownership of the tanks.
Medical gas suppliers like to rent tanks to their customers because there is very good profit in rental. Retail prices vary widely but a large H-cylinder tank can be purchased for somewhere between $160 and $250. And some dentists do purchase their tanks to avoid the rental fees that will often pay for a tank in 2-4 years.
Delivery Fees
Fees with delivery can vary widely. All suppliers charge a delivery fee. Many charge a hazardous material handling fee (not really necessary for dentists), an administrative fee, a gasoline surcharge, product surcharges (when their product expense rises) and many other creative charges. These delivery fees should be examined and even challenged if not necessary because they can quickly become a large percentage of your expense.
Service Requirements
Last, but not least, service must be considered. Is the source for your medical gas reliable and dependable? Do they promptly respond when your gas inventory gets low? Better yet, do they check with your office on a regular basis to see if you need service?
About the Author:
Written by Chick Cowan. Becoming a United Dental Alliance Member is quick and painless, with no cost to join. Save up-to 40 percent on over 40,000 dental products. More information can be found at http://www.theuda.com/
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