Many Doctors have hesitated to raise their fees. Whether it was fear that lower priced competitors would take their potential patients or that they “could not raise fees in this economy”, fees have remained the same since 2009 for many practices. Other practices feel they should “maintain the status quo” because they will only take a bigger write off from an insurance plan.  Some doctors have gone so far as to  “negotiate” a lower fee with some patients, thinking that if they could get this patient and the case, it would fill the book. Somewhere in this belief is the idea that more patients will offset lower fees, and will lead to higher profitability.

We look at profitability numbers each month with our clients. Our busiest practices are not the most profitable, and the practices that do the most large fee cases are not as profitable either. Why is that? In a word, overhead. The more patients you see, the higher your overhead. The more large cases you do, the greater the likelihood of not pricing the case right for the amount of time it takes and more likelihood there is of providing one or more of those crowns in a multiple unit case, for only the lab fee.

Overhead has not stopped increasing because of the economy.  You and your team would like raises, the lab wants to be paid, supplies are costing more – you cannot not raise your fees.  We recommend raising fees on an annual basis.  Many teams struggle with raising fees because of the anticipated reaction from patients. We hope you are subscribed to Words Matter for some suggestions on how to handle this challenging topic.

Raising your fees is one of the best steps you can take to improve profitability.  The chart below shows the relationship between a specified percentage fee increase and the effect this increase will have on profitability.

% Fee Increase

		3%	5%	10%
	80%	15%	25%	50%
	75%	12%	20%	40%
Overhead	70%	10%	16.6%	33%
%	65%	8.6%	14.3%	28.6%
	60%	7.5%	12.5%	25%
	55%	6.7%	11.1%	22.2%
	50%	6%	10%	20

When is your next fee increase?