It’s important to have an appropriate fee structure that suits the needs of your practice and your patient base.
You want to make sure you’re profitable enough to provide patients with the best care, invest in the right equipment, hire and train qualified staff.
And as recent years have shown us, you also need to build in a bit of a buffer so that if market conditions change or emergencies arise, you have the cash flow necessary to keep the practice afloat. Reviewing your fee structure regularly is just part of good business practices.
Your fees are a direct reflection of your costs; rent, staff, interest rates on loans, equipment, etc.
Because your costs and the economic environment in which you operate changes so often, you need to review your fees periodically.
Sometimes people go years without reviewing their fees which is a huge mistake.
If you don’t review your fees for several years then one day you take a look at your costs and realise you need to increase your fees by a lot, then you’ll probably have to make a pretty noticeable increase.
This kind of big jump can be tricky, awkward, and even alienate patients. So, as a preventative, you want to review your fees often and the increase will be a lot smaller.
If you are in the position where you do need to make a big jump, your best bet is to break it into smaller increments over time.
Our first hand experience shows that patients aren’t too fussed about this and rarely notice at all.
Of course, practice owners biggest fear is that a patient will complain or challenge the fee increase.
It’s important to know that in our decades of industry experience, this rarely ever happens and shouldn’t deter you from increasing the fees as necessary to cover the costs of the practice.
In the rare occasion this does happen, a good verbal skill to navigate it is:
“You’re right, we’ve been able to absorb certain costs in the background and haven’t increased fees in XYZ years. But we’ve gotten to a point where we can’t absorb those costs any longer and we’ve had to pass some back to the patient.”
As you can see, that’s a totally reasonable response that gives the patient a bit more context about the cost involved in running a dental practice, why the increase is happening now of all times, and reinforces the goodwill of the practice.
So, if you haven’t reviewed your fees in a while, maybe this is your sign to go ahead and do that now… but the problem is every business is raising prices which then increases inflationary pressure which hastens or contributes to recessionary forces.
During a recession, a couple of things typically happen.
- patients will delay what they perceive as elective treatment.
- so that means the practices left doing bread and butter dentistry, low end low margin type of treatment,
- Greatly reduce profitable high end cosmetic elective procedures.
Equally what can happen is that the normal fixed monthly recall can get blown out to nine months or even 12 months and the consequence of that for the patient is that their teeth aren’t being examined as regular as they ordinarily would be.
So small problems can become bigger problems that become more time consuming and more costly to fix. And so it’s really important that that regular care is maintained from a preventive point of view.
Because if it’s not, as I said, the patients end up spending more money and more time than they want to on the teeth, and then what happens if that’s compounded with the recession, then they’ll be choosing options that are potentially substandard, cheap options, rather than the best options.
So you get into this vicious cycle. But it’s not just the patients…
All those forces with the patients delaying the treatments, electives, or early treatment or maybe delaying their regular checkups is also set against the backdrop of team members asking for pay rises.
Thus, your revenue is impacted but of course, your cost base is impacted as well because now you’ve got your wages going up against that same force. Which means staff wages have to go up if you want to retain your best staff and we know that it’s really difficult to recruit people. So it’s this kind of perfect storm as well.
So what I did was create an online training event specifically to address how to recession-proof your practice. Where I’ll not only show you how to keep your chairs full during economic downturns so people are paying those higher fees, but also how to find new opportunities to actually grow, plus how to improve your systems and teams to handle that growth better. By the time the recession is over your practice will be thriving instead of dying.
If you’d like to see more head over to our registration page https://savvydentist.com/recession-proof-your-dental-practice-webinar-sign-up/