10 steps to solid fees for your dental practice
There are a few practical steps that dentists can take in order to keep fees reasonable, yet make a profit for their practice.
Fee adjustments are a necessary part of running a high quality dental practice. If you’re hesitant to increase them, it’s important to ask yourself if you’re compromising quality for low fees.
Do you forego necessary investments in staff training? Do you bypass updated equipment and more efficient systems because you’re afraid you can’t afford more than the status quo? Are you compromising your own CE opportunities because of the impact on the budget? If so, being cheap is costing you a fortune in lost opportunities, production quality, staff efficiency, and probably your reputation.
I don’t need to tell you that the cost of running a dental practice increases every year. Establishing a sound fee scheduleallows you to be fair to your practice and improve patient care. There may still be lean years, but their impact will be less because you will have kept pace with the cost of doing business. Consider these 10 steps when establishing your fee schedule.
1. Know where you stand – Make sure you’re well aware of where fees stand in your area. Your fees should not be too far below or too high above the local marketplace. But that’s not the only consideration. Your fees need to reflect your business.
2. Establish a standard fee for each service – You need to consider what it’s costing you to actually deliver the dentistry. Base fees on your overhead, expenses, patient base, individual level of professional expertise, and debt.
3. Track your overhead expenses – Fees should line up according to the following benchmarks – laboratory - 10%; dental and office supplies - 7%; rent - 5%; employee salaries – 19%-22%; and payroll taxes and benefits - 3-5% of collections.
4. Recognize where you are on the skill continuum – For example, new dentists do not perform dentistry at the same speed as experienced doctors. For these doctors, what they don’t have in speed they can make up in building relationships. Similarly, for dentists establishing new practices, it can be particularly beneficial to hold off on hiring a hygienist right away. This allows the dentist to focus on building one-on-one relationships with patients. It will also help keep overhead down until production increases and the practice can handle a hygienist on the payroll.
5. Build relationships – Remember, when patients have a relationship with their dentist, they don’t question the fees. Building good relationships with patients has never been more important.
6. Avoid the “seesaw” fee structure – Don’t set fees too low for some services and too high for others. In the past, it was not uncommon for dentists to keep hygiene fees unrealistically low, and then make it up with much higher fees for other procedures, such as crowns.
7. Pay attention – Listen to what patients want and why they’re coming into the practice. Addressing the small issues and offering more conservative restoration options, provided that it’s in patients’ best interest, can be absolutely critical before recommending large and more extensive alternatives.
8. Avoid the fee ceiling – Don’t trap yourself by attempting to establish your office fee schedule based on what some third-party payer reimburses at 65% of the 85th percentile.
9. Establish goals – Identify specific production goals based on the number of days per week you will see patients, and the number of hours you will spend on treatment.
10. Plan for increases – Establish a solid fee for each service and plan to adjust your fees twice a year,2% and then 3%, for an annual increase of 5%. Even if you increase your fees only slightly, say $4 to $5 per procedure, this will make a huge difference in your bottom line.
Finally, never lose sight of your vision and goals. Step back and take a look at what you want to get out of your career, now and in the future. No matter what your personal and professional desires, they all have a price tag. The key is to determine how much your practice needs to produce and collect to achieve them. Remember that the most successful doctors are focused on providing the level of dentistry that achieves the greatest return for the patient. After all, patients are no different than the rest of us. They want to know they’re getting the most value their dollar.
Sally McKenzie is CEO of McKenzie Management, a nationwide dental management, practice development, and educational consulting firm. Working on-site with dentists since 1980, McKenzie Management provides knowledge, guidance, and personalized solutions that have propelled thousands of general and specialty practices to realize their potential. She can be reached at 877-777-6151 or email@example.com.