Is it Time to Raise Fees?
According to Kiplinger, consumers are spending again. The most recent adjusted rate shows a 2.6% increase, the largest since 2006.
Yes, consumers are buying and retailers are charging. Case in point, McDonalds Corp. plans to raise prices next year. It will be the first time in more than a year. Company officials say they are cautiously optimistic about the slowly improving economy. Not to mention the fact that they anticipate commodity prices will be going up next year as well. You can also expect to pay more for your designer duds in 2011 as the price of cotton is predicted to increase too. Certainly during the last several months, many retailers and service providers have been understandably reticent to raise prices, but the tide appears to be shifting.
For dentists, the decision to adjust fee schedules can be agonizing in the best of times. Determining if the time is right to increase fees, particularly if you’ve avoided it for several months because of the economy, is a decision that should be carefully considered.
In most cases, I recommend that fees be adjusted each year - if you have chosen to maintain your current fee schedule the past couple of years, I hope you told your patients. They can’t possibly appreciate what you did for them if you didn’t inform them. That being said, it’s probable that for some dentists, if not many, it’s time to adjust fees. Like other businesses, costs are increasing on many fronts. But, before you make the decision to raise your fees, take time to consider a few key factors.
#1 - Your Market
Consider the message your fees send current and prospective patients. If your fees are the lowest in the area, are you attracting quality patients that appreciate and value your care, or is your practice a magnet for price shoppers? Similarly, if your fees are the highest, do you want to be known as the most expensive dentist in town? Do you offer a patient experience and results that warrant the higher rate? Are you seeking to work with a smaller patient base?
#2 - Logic, Not Fear, Is Your Guide
The dentist down the street may be charging in the 90th percentile and may be thriving, but many doctors convince themselves that they simply couldn’t charge that because patients will leave or the doctor feels guilty for increasing fees. Yet ours is a culture in which people associate quality with cost. In other words, you get what you pay for, and like it or not, cheap is often equated with low quality.
As compassionate as you may be as a healthcare provider, providing the best care comes at a price. Fee adjustments are a necessary part of running a high quality dental practice. Are you compromising quality for low fees?
#3 - Establish A Realistic Fee Schedule
Institute a fee schedule that has a standard for each service. Evaluate the time required for each procedure, the fixed expenses necessary to run the office, variable expenses including supplies and lab fees, and income required per hour to compensate you, the dentist.
Next week, while you’re evaluating fees, it’s time to revisit your financial goals.
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