12.8.17 Issue #822 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter
 

Steps to Ensure You’re Not Undercharging Patients
By Sally McKenzie, CEO

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Attracting new patients to a dental practice can be challenging, and is a lot more work (and more expensive) than keeping the ones you already have. With that in mind, you do your best to ensure your current patients stay happy – and that includes never increasing your fees.

Many dentists think that keeping their fees low will also help them attract those elusive new patients, giving them another reason to hold prices steady. While that might be true, low fees won’t bring in the patients you really want. You’ll treat a lot of people who are just looking for the best deal, and who have no intention of becoming a permanent part of your patient base.

And of course, if you never raise fees, you likely won’t be able to invest in the types of technologies and practice updates that attract new patients and keep current patients coming back, which ultimately costs your practice money and will likely put a damper on team morale.

Raising fees isn’t something to fear; it’s an essential part of running your business. If you keep your prices fair and representative of what your practice offers, you won’t have to worry about losing loyal patients to a competitor. Patients expect you to raise your fees from time to time, and understand that any updates you make to the practice - which in turn enhance patient care - aren’t free.

Still, I understand the thought of increasing fees might make you more than a little uneasy. Don’t worry. I can help. Follow these six tips to implement a solid fee structure in your practice that both you and your patients can be happy with.

1. Set goals. Before you make any changes to your practice fees, it’s important to first determine how much money you need to bring in each month to pay the bills, make practice upgrades, save for retirement, and fund the lifestyle you’d like to lead. Then consider how many hours you’re willing to work each week to get there. Once you have that figured out, you can determine daily production goals. The goals you establish should guide you as you establish or adjust your fees.

2. Put together a fee schedule for every service you offer. To get started, determine how much it costs to perform the dentistry. Then factor in real practice data, such as your patient base, overhead, expenses, debt and your experience. When you’re determining how much you’re going to charge for services, don’t forget to consider the level of care you provide and the overall experience patients can expect at your practice.

3. Take the time to do your research. Find out what other dentists in your community charge. Remember, you don’t want to be the highest or the lowest. If you’re the highest, it could deter patients from making an appointment at your practice. If you’re the lowest, patients might think your practice isn’t as up-to-date as it should be.

4. Track your overhead expenses. These costs should be in-line with industry benchmarks. Here’s the breakdown:

Laboratory: 10%
Dental and office supplies: 7%
Rent: 5%
Employee salaries: 19-22%
Payroll taxes and benefits: 3-5% of collections

Are your expenses above these benchmarks? If they are, you’re likely dealing with broken systems and it’s probably time to make some significant changes in your practice.

5. Make fee increases part of your plan. Establishing a solid fee for each service is important, but don’t stop there. Put a plan in place to ensure you adjust your fees twice a year: 2% the first time and 3% the second time, for a total of 5%. Your patients will barely notice the increases, but they will do wonders for your bottom line.

6. Don’t fall into the fee ceiling trap. What does that mean, exactly? Don’t attempt to establish your office fee schedule based on what some third-party payer reimburses at 65% of the 85th percentile. Instead, base fees on practice data and the goals you’ve established.

Where you set your fees is very important to the success of your practice. Many dentists opt to keep their fees the same year after year because they’re afraid of losing patients to a dentist with cheaper services. But if you never raise your fees, it makes it difficult to invest in the latest and greatest technologies that enhance the patient experience – and that means the quality of care you provide will likely suffer and you’ll end up losing patients anyway.

If you’re ready to finally raise your fees but need more guidance, feel free to contact me. As always, I’m here to help.

For additional information on this topic and more, visit my blog: The Lighter Side

Interested in speaking to me about your practice concerns? Email sallymck@mckenziemgmt.com
Interested in having McKenzie Management Seminars speak to your dental society or study club? Click here.
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