In the first edition of our newsletter each year, we include an article about fees because in survey after survey it is reported that dentists, in Florida and nationwide, do not routinely increase them. Not only is this damaging the long-term future of your fee schedule (by missing the annual compounding of increases), the decision not to raise fees is an inherent resignation to a comparatively higher overhead and lower profits when looking at previous years.

Annually, we offer localized NDAS fee reports to allow for a rational basis for setting fees. We often look at practices for valuation and transition data only to find fees far below the area norm. Not only have these low fees  cost the practice revenue year after year (on a compounding basis), but they also  negatively impact the purchaser of the practice who wants to bring fees in line with the local norms as quickly as possible. Unfortunately, the new practice owner is handicapped in the ability to normalize the fees, and may face patient reluctance  by increasing fees immediately after taking over the practice.

Our recommendation is to select a fee schedule that accurately reflects the quality of care provided in your practice. All fees for services, once set, should be increased at the same rate across the board. Many doctors waste time and energy trying to adjust individual procedure fees based on the perception of patient and insurance company reactions. The increase of at least three percent (3%) each year is recommended. If that seems drastic, note that the majority of survey respondents generally report fee increases of up to five percent (5%). If you only stay in lock-step with Consumer Price Indexes (CPI), which is currently at one percent (1%), this doesn’t reflect the specific increases in your expenses which are not tied to CPI, which are most likely much higher than 1%.

It is important to remember that it is  doctors who do not incrementally increase their fees annually will rarely catch up or make up for the lost years when they did not  increase their fees simply by having g large fee increases in any one year.

Doctors should consider that their primary business goal is to operate their office at optimal capacity doing the type of dentistry they want to do. In addition to conservative fee increases this year, extending more liberal credit terms to patients may be necessary to help increase treatment acceptance and build goodwill with patients.

As we all know, economies are cyclical and just as they have turned down in the past, all indications are that they are now turning back up. Now is the time to comprehensively evaluate how your practice is positioned and make plans for this New Year. Your practice budget is vital for the ongoing success and health of your business. A little time now will save stress, and dollars, throughout the year.