Is it fair to blame the economy? Depends on why you’re asking. But the question of when your dental practice should raise its fees seems appropriate.
Inflation, the COVID-19 pandemic, salaries, team benefits, supply costs, and an increase in supply demand (e.g. PPE) all factor into the discussion.
Still, the question lingers: what about dental fee increases?
Fee-fears are real
When was the last time you raised your fees? Not to be too confrontational but your answer reflects consistency or it reveals procrastination (perhaps out of fear).
It’s easy to understand procrastination. A fee increase can prompt fear that your patients will seek a “cheaper” provider.
But here’s a fee increase confidence booster:
”While this seems like a good way to encourage patient loyalty, keeping your fees the same year after year might actually have the opposite effect. Think about it. If you never raise your fees, how can you afford to invest in the latest technology or make upgrades to your practice? Keeping your fees steady holds back your practice, and that ultimately hurts the overall patient experience. When patients don’t have a positive experience, that’s when they start looking for a new dental home.” [1]
Granted, patients might think otherwise. Although the ROI could tip a fee increase in your favor.
There are other reasons to increase fees. Some, of course, are necessities given the above-mentioned economic conditions.
Either way, you can proceed with a needed fee increase knowing that ultimately your patients will benefit.
How to know when a fee increase is an advantage to you and your patients
Again, you might not have considered that a fee increase has a positive impact on your patient. Remember, we’re taking a big picture perspective.
It’s about the patient experience that a fresh financial surge can have on your care standards. Patient data also factors in—and that’s the general consensus surrounding fee increase timing (apart from the economy).
Watch the competition
First, you’re all about patient health. So, any use of the term “competition” isn’t intended to create animosity.
It does pay to know what other area or regional providers are charging for treatment. Being on the low end of the fee scale might appear to keep you busy.
But not so fast…
Low fees can actually skew patient perspective. Dental promotions advertising rock-bottom fees for services often triggers the value-shoppers—those looking for a good “deal” rather than a quality dentist.
Patient loyalty can equate to a higher-quality patient. It’s desirable to be competitive on something other than price.
- Research the local dental “market.” Know what your fellow dentists are charging.
- Increase your fees when you trend to the lower end of the local fee scale.
- Know your demographics. What services appeal to your practice’s demographic data? When have your fees caused hesitancy or “push-back” from patients? Is a patient’s cost issue about fees or is it insurance coverage, payment options, etc.?
Stay consistent across your services
True, some services require higher fees for good reason. The issue of consistency has more to do with an all-over-the-map fee scope that doesn’t reflect the service or its patient benefit.
A gradual increase is better than a drastic one. Wisdom applies.
“Even if you find your fees are way out of whack you can’t jump from 40% of market to 80% overnight without turning off a lot of patients. Gradually increase 10-20% over a 2-3 year period to mitigate any negative perceptions.” [2]
- Avoid frustrating your patients with an inconsistent fee structure.
- Trust your practice growth goals, your patient demographics relative to treatment, and the general demographics of your area.
Meet your financial goals
Delaying a fee increase could be what’s kept you from a positive revenue cycle in your dental practice. Your financial status determines your ability to scale your services and provide new and/or improved treatment solutions.
Remember that being profitable is good business. Some circumstances call for flexibility (and a dose of generosity). But overall it’s essential to keep your fee schedule aligned with the practice growth initiatives that best serve your patients.
- Create and monitor your dental practice fee schedule.
- Build in annual fee increases. Consider breaking your fee increases into two parts. Start with a 2% increase add 3% later in the year for a total of 5% [3]
- Use fee increases (when possible) to expand your services and upgrade your patient experience. Deliver value and your patients will likely not wince at small, incremental fee increases.
Your dental practice success relies on the bigger financial picture – monitoring operational costs, making wise investments, and adjusting your fees on a consistent basis.
Give some attention to these relevant financial resources:
Keep the Operating Costs of Your Private Dental Practice Healthy
Re-Boot Your Momentum with a Dental Practice Cash-Flow Strategy
The ROI-Boosting Revenue Cycle Management Module of Your Dental Practice Management Software
Financials and cost monitoring at-your-fingertips
The financial management capabilities of your software platform help keep an eye on your fees, maximize your working capital, and analyze those metrics that improve your bottom-line.
Consider a cloud-based solution and accurately monitor and measure your dental practice financials
You might find the cloud solution like Denticon to be a more efficient report gathering platform to monitor and drive your overall dental practice or dental organization’s performance.
Aside from its financial management capacity, the Denticon platform also provides:
- A predictable, monthly subscription rate
- Data hosted in the cloud that’s remotely and securely accessible
- Savings that compared with a “legacy” system can total an average of 40%
It makes sense to look below the surface and see the massive potential of upgrading to a cloud-based dental practice management solution with a more advanced operational cost monitoring capability.
Thinking about or ready to update your dental practice management software? Contact us or request a demo of the Denticon platform to see the benefits yourself!
[1] https://www.dentistryiq.com/practice-management/fees/article/16366282/is-it-time-to-raise-the-fees-in-your-dental-practice-how-to-tell
[2] https://www.cainwatters.com/digitalblogs/how-to-raise-fees-increase-profitability-and-keep-patients/
[3] https://www.dentistryiq.com/practice-management/fees/article/16366282/is-it-time-to-raise-the-fees-in-your-dental-practice-how-to-tell