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12.16.05 Issue #197  
Pull Fees out of the Deep Freeze

Sally McKenzie, CEO
The McKenzie Company

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There you sit in line at the drive-up window waiting for your morning mocha. With the arrival of 2006, the cost of your favorite cup of specialty joe will probably increase, but you have no plans to change your routine. Tuition is going up at the out-of-state university your daughter attends, but you won’t be insisting she enroll at the local community college. The fees are scheduled to increase at the state park you intend to visit with your family next summer, but you wouldn’t consider canceling the trip. A few of your favorite materials will be increasing in price, but these are quality products and you don’t plan to stop using them.

Salaries and benefits are going up, supplies are going up, equipment and maintenance are going up, personal expenses are going up. But what about your fees? 

When was the last time you examined, let alone raised, your fees? You value that cup of specialty coffee. You value the quality of education that is purportedly delivered at that expensive university. You value the materials and supplies you know work best for your procedures. You value the dentistry you provide your patients daily, but you fear that your patients don’t value you enough to continue investing in your care should you increase your fees. 

Fees are not just a fact of life and work, they are a statement of the quality of care provided. What message does it send patients when the charges for dental services seldom change? Is it your goal to be perceived as the cheapest dentist? What is the price of that monitor? For starters, you’re most likely attracting the cheapest patients who place very little importance on quality oral care.

What’s worse, if you’re compromising your fees, you’re most likely compromising other things as well – your salary, your retirement, continuing education, new equipment, etc. Establish a fee schedule that is a reflection of your values as a practitioner and is fair to both you and your patients.  Here’s how.

First, look at the realities of providing quality care. Evaluate how much time is needed for each procedure. Next, add up the fundamental expenses of the office. These would be fixed costs, rent, utilities, salaries/benefits, etc. and variable expenses such as supplies, lab fees, and income required per hour to compensate you, the dentist. 

Now take a good look at where your expenses are as compared to where they should be. It’s imperative that you establish a goal so that expenses come within striking distance of the following industry standards: laboratory 10%, dental/office supplies 5%, rent 5%, employees’ salaries 19-22%, payroll taxes and benefits 3-5%, miscellaneous 10%.

Next consider the value that you place on your time. How many hours do you want to spend at the office each week? How much money do you want to make each year?  Determine the number of days per week you will see patients and the number of hours you will spend on treatment. If your annual production goal is $950,000, you work 48 weeks a year, 36 hours per week, your hourly production goal is $550.

Next, take a look around the neighborhood. Study the fees of other dentists in your area as well as the income demographics of your patients. Consider your own practice – the quality of work you provide and the quality of your team, which may be far above the skills and quality of the practice down the street.

Now that you have real data and solid information, structure your fee schedule based on that, not gut feelings. And remember the fundamentals of fee psychology. Consumers/patients are more accepting of fees that end with the following: $1, $2, $3, $4, $6, $7, and $8.

Establish a plan to adjust your fees on a consistent schedule. In most cases, this will be 5% once a year. In some instances, you may prefer to break that down into two adjustments during the year, perhaps 3% in January and 2% in July.

Once you’ve established your fees, charge them! No backpedaling. Just because Mrs. Antonio likes to bring you pizzelles does not mean she’s entitled to discount dentistry.  She may well be the millionaire woman next door.

Next week, the value of your care doesn’t hinge on your fees.

If you are interested in having a comparative fee analysis detailing 216 of the most often performed procedures compared to your existing fee schedule compiled for your zip code.  Please email

Interested in having Sally speak to your dental society or study club? Click Here.

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McKenzie Management's Seminar Schedule
2006 Location Sponsor Information Topic Speaker
Jan. 26-28 Dallas, TX Dallas County Dental Society* 877-777-6151 Top Issues Sally McKenzie
Feb. 9-10 Santa Barbara, CA The Art of Endodontics 800-528-1590 Max. Prod. Sally McKenzie
Mar. 9 Vancouver, BC Pacific Dental Conference 604-736-3781 Overhead Sally McKenzie
Mar. 24 West Branch, MI Northland Dental Study Club 989-345-7750 Breakdown Sally McKenzie
Mar. 29 Long Island, NY Suffolk County Dental Society 312-440-2908 Breakdown Sally McKenzie
Mar. 31 Las Vegas, NV Dental Town Meeting 877-777-6151 TBA Sally McKenzie
* The McKenzie Company will be exhibiting at this location

McKenzie Management
A Division of The McKenzie Company, Inc.

3252 Holiday Court, Suite 110

La Jolla, CA 92037

For more information, email
or call 1-877-777-6151

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