Management

The Truth About Your Fees

Dentistry Today September 1, 200212 Mins read2.5k Views

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Let me begin by elucidating the fact that I haven’t any degrees in business administration. I cannot place an MBA or a PhD in economics after my name. In fact, I don’t even have one of those certificates of completion that you get after a 3-day management course. However, what I do have is a decent grasp on the reality of a high “fee-for-service” practice in “average Home Town, USA.” This article is dedicated to those practitioners who have struggled for years with their fees…struggled with the questions of how much they should charge; how costly their fee increase is to patient flow; how you get from $650 to $1,100 for a crown; and how long it takes to make a change.

My intent is not to suggest that anyone “price gouge” their respective communities. Rather, it will become clear that your fee schedule should be commensurate with your commitment to excellence. If your clinical care is average, then your fees should follow. If they are mediocre, well…you get the picture. The bigger question is, “How do you know?” How can you be objective about how “good” you are? This article will offer a myriad of avenues to objectively evaluate these critical questions. And if you are one of those offices that has evolved to a model of excellence, ethics, and distinction, then indeed I believe you should “get paid.” My answers are based on experience (20 years of it), not theory.

Figure 1. Weekly Performance Monitor

Week of- ___________

Productivity

Production _____________________________ Collections_____________________________

How Much Down Time? _________________________________________________________

Performance

Number of New Patients: _________________________________________________________

Number of Patients Seen: _________________________________________________________

Number of LATE Seating: ________________________________________________________

Number of Compliments: _________________________________________________________

Number of Complaints: ___________________________________________________________

Hygiene Production for Week: _____________________________________________________
(Average Production per hour)

Quality

Number of Clinical Procedures Repeated: ___________________________________________
(Additional impressions, Shade, Bite, etc.)

Number of Remakes Necessary: ___________________________________________________
(Identified in Hygiene)

Team Contentment

Sick Days: ______________________________________________________________________

Lateness / Tardiness: ______________________________________________________________

Terminations: ____________________________________________________________________

Figure 2. How Are We Doing?

1. Did we answer the telephone pleasantly and promptly?	Yes	No
2. Were you pleasantly greeted within a few minutes of entering our reception room?	Yes	No
3. Was your visit in the reception room reasonably short?	Yes	No
4. Was the reception area clean and comfortable?	Yes	No
5. Was your treatment in our office pleasant?	Yes	No
6. Was your bill what we stated it would be?	Yes	No
7. Did we explain your needed dental treatment and fees to your satisfaction?	Yes	No
8. Was the clinical staff pleasant and helpful to you during treatment?	Yes	No

9. What did you like MOST about our office?________________________________________________________

10. What did you like LEAST about our office?______________________________________________________

Since we are continually trying to improve our service to you, our valued patient, please let us know anything we can do to make your visit more pleasant!

Thanks so much! Dr. Steven L. Rasner

TRUTH NO. 1
Your fees should be based on your commitment to clinical excellence and customer service. Nothing else. Not where you live. Not on your UCR. Just on your level of excellence. I am acutely aware that this popular theory is vague. How do you translate a commitment to excellence into fees?

Someone reading this deep in the heart of Louisiana might be thinking, “If I lived in L.A. or New York, I’d get twice my crown fee.” And you’re right. If you are as good as practitioners in those areas of the country, then what are you waiting for? Just remember, the clinicians that are “really” good have paid dues. So, start by asking some tough questions:

(1) How up-to-date is your continuing education? Twenty hours per year doesn’t warrant a raise.
(2) How much of a command of restorative materials do you have? Do you really feel confident about when to treatment plan a veneer? What about Empress, Procera, or a PFM? How about occlusion? Do too many of your restorations fracture or debond? Do you struggle with removable prosthetics? Do you not recommend implants because they are not in your armamentarium?

At some point you have to be honest. You must look in the mirror and ask, “Have I done anything to earn an increase?”

Figure 3. Suggested Areas of Study for Staff

Office Department	Recommended Education
Front Desk	Software training, insurance clinics, productive scheduling, time management, positive attitude.
Chairside Assistants	Provisionals, lab skills, bleaching, emergency medicine, legal documentation, restorative materials.
Hygiene	Soft tissue management, pharmacology,home care technology, various co-therapeutic technology, oral lesions identification, restorative materials.
Doctor	Occlusion, restorative materials, and pain management.

TRUTH NO. 2
Raising fees will equal losing patients. End of story. Prepare to have your feelings hurt, your ego deflated. Brace yourself, because the patient you lose might be that exceptional veneer case you did years ago, or the patient you got out of pain on a Sunday (in the snow). It might even be your golfing buddy or the friends that helped your wife with your 40th surprise birthday party. It doesn’t matter. Some patients are cost-based, and if you raise your fees, they’ll leave you.

Now that you’re over that, let me tell you the good news. If you’ve trained for excellence, and can walk your talk, there will always be a market for your skills. This isn’t theory. It’s a fact. And the people who will pay $1,000 for a crown often socialize with others who will do the same. Just be realistic. Success with a high fee-for-service practice takes considerable time.

The largest truth I can give you from 20 years of this is that you will never be everything to everyone. It might help to get past the fear of the “lost patient” with the following: Think about the fact that you have a choice. You can keep your fees “middle-of-the-road” or “preferably low”; in fact, real low. Charge $450 for a crown and do the prophy for $40. What the heck: gratis the exam and x-rays. Perhaps you could accept the insurance assignment on larger procedures so the patient doesn’t have to pay anything. It is noteworthy that this constitutes insurance fraud. That’s right, this part of your plan would in fact be illegal. If this is your choice, what you do is find a $49/unit lab and the cheapest cotton rolls, impression materials, and staff out there. This ought to solve some of your patient flow issues.

The other choice is far more difficult. It requires organization, discipline, and abundant courage. It will have you and the staff attending “planned” (not random) continuing education courses. It will have you “measuring” your improvements. It will have you increasing fees at a 10% rate per year until you reach the 95th+ percentile. The results will yield significant increased income, reduced overhead, improved morale, and fewer patients per day. Think about it. More time per patient. Calm. Order. Definite joy.

There really is no other choice. Once you sleep on a great mattress, once you wear a fine suit, once you feel the daily rewards of the investment in excellence, there simply is no other choice.

But how do you address the rate of increase? A 10% across-the-board raise for 5 consecutive years with the commitment aforementioned will not “rock” anyone’s community. This will take your crown fee from $600 to approximately $960, and your scaling and root planing from $150 to $230. According to Dr. Charles Blair, a 10% increase across the board yields a 26% increase in net (for the same services). And that’s the first year.

The rewards include increased cash flow, reduced stress (paying bills on time can do that), and improved morale. I presume you will invest in office morale-boosting ideas that perhaps were out of the last budget. An extra handpiece, a new assistant stool, some new mirror heads, improved software, or a new terminal can do big things for office morale!

Yes, the price for this will be some lost patients. There will be no exceptions. Part of your “fee increase meetings” (see Truth No. 3) will include an analysis of the insurance plans you now accept. The beauty of a 5-year plan is you don’t have to dump insurance plans all at once. In fact, you may end up keeping one or two plans, depending on how close they remain to your fees. For example, I have kept one insurance plan over the years. They pay $890 on a $1,100 crown. It’s 5% of my practice. And the makeup of this group has been a stable source of returning patients over 20 years. You see, if you’re willing to put the drill down for a few insightful meetings you can make informed decisions.

The prospect of a 5-year plan won’t excite some of you. You understandably want change immediately. However, there simply doesn’t exist an enduring successful enterprise that hasn’t paid dues. You are going to have to tighten your belt, keep a close eye on the budget, and constantly set short-term goals during the transition. It ain’t pretty. It’s a war. But you will win it. You know why more offices don’t take the challenge? Even as frenetic and week-to-week as they exist, it’s easier and more comfortable than change.

TRUTH NO. 3
A high fee-for-service practice takes time. Don’t let anyone tell you otherwise. Don’t fall for that “double-your-fees-and-you-won’t-lose-half-your-patients” story. Forget for a moment the various management guru theories. Think about the world you live in…the best clothing stores, restaurants, or furniture stores. Did you ever hear of one of them doubling their fees over 1 year, let alone overnight? You’ve got to lay out a plan. You’ve got to know how good you are now, and what you aspire to be. Here’s one way to do it. Set up three staff meetings, 60 days apart, dedicated only to fees.

MEETING 1: SELF-EXAMINATION
Where are you now as an organization? Is there a constant leak of nonreturning patients? How’s your “on time” record? Are there numerous complaints or misunderstandings about patients’ bills? How is the attitude of the staff to the patients? How about to each other? Is this place happy? What about your office environment? It doesn’t have to be a $200,000 renovation job. New rugs, wallpaper, and a clean waiting room go a long way toward improving morale for both staff and patients. So meeting number one might hurt some feelings. It needs to be honest. Chances are you won’t have all the answers, so take 2 months and survey (Figures 1 and 2).

Note that Figure 1 is a Weekly Performance Monitor and is broken down into the following:

Productivity: Every practice needs a bottom-line productivity to stay profitable. A conflict between productivity and excellence doesn’t exsist if you don’t allow it. However, the only way to keep them in balance is to track the data. A great week that yields on-time appointments, great care, and a happy staff, but is unprofitable, is no better than the frenetic week with the multitude of problems that come from running late from room to room, with substandard care and yet immense profitability. Without exception, the most successful practices find balance.
Performance: This section leaves nothing to chance. Go ahead. Ask your staff next week how the office has been doing lately. Have we been on time? Any complaints? How was the hygiene department last week? Guess what? Nobody will really know. No one can remember without tracking it. Assign the front desk “exit receptionist” to track complaints or compliments. The assistants can keep a chart on any seating that was 15 minutes late or more. In fact, everyone should share the responsibility of tracking how you are doing. At first it will seem like a lot of work. Eventually, it will just be a part of how you exist.
Quality: This is for the clinical portion of the staff. The very act of tracking repeated clinical procedures such as a newly needed impression, a wrong shade, an inaccurate centric record, or even caries diagnosed on a bite-wing under a crown you did a year ago (I know, never happens to you) will inspire you to get it right the first time. You can’t guess on this stuff—you have to track to see if your course with Dr. Dawson yields less insertion adjustments, or that your mastery of ceramics enables you to select appropriate materials (Empress vs Spinell vs Captek, etc) that result in outstanding aesthetics without a return to the lab four times. Tracking requires work. It is tedious, but positive reinforcement will provide confidence to stand tall behind that yearly 10% raise you have justly earned.
Team Contentment: Staff members that always seem to get sick on Mondays or can’t figure out how to be at the morning meeting on time are not content. They just don’t care as much as those who do in fact make a responsible commitment. It is demoralizing to other team members when you look the other way. Part of the reason you look away is because you don’t remember. They couldn’t possibly have missed seven Mondays last year, could they? You need to be fair. You need to remember. You need to track team contentment.

Figure 2 reflects one patient “exit interview” you might use. It takes all of 5 minutes. In the morning meeting, choose one or two patients who might be completing treatment to be interviewed. Keep your results in a large three-ring notebook. Implore your patients to be honest. Assign one staff member (usually the new patient coordinator) to review the results before your monthly meeting. Delete or add questions relevant to your office. However, asking questions about how long they waited or if their bill was what we said it would be goes a long way toward “prevention.” Don’t brush this off. Don’t pay someone else to do it. Successful, high-fee organizations care more. Part of caring more is taking the time and energy to see where you are. Once you have a measure of where you are, address the areas that will warrant a fee increase.

MEETING 2: HOW WILL WE IMPROVE?
Drs. Frank Spear, John Kois, and Carl Misch don’t get their fees because of where they live. They get them because they’ve paid big-time dues. Education, research, sweat, and contributions to the profession have given them their fees. OK, so you’re not one of them. But anyone can elevate their present skills to warrant a fee increase. Here’s one way to do it:

•Hold two annual meetings (in February and August) to select courses for the calendar year. Establish a goal of two for the clinical staff and one per quarter for the doctor. Start four notebooks labeled “Front Desk,” “Hygiene,” “Assistants,” and “Doctor.” Save all course information. Areas of study that we encourage can be reviewed in Figure 3.

It is imperative that everyone spend time prior to the meeting reviewing potential courses. The purpose of the meeting is to finalize selections and make a budget adjustment. If I’m taking a $5,000 course 6 months from now, we simply put away $1,000 each month. It really works and feels good when I don’t have to take a $5,000 hunk out of the budget the week of the course.

It also is an excellent time to prepare for office coverage. If I know in February that my hygiene team is taking 3 days off in June, I’ve got a much better shot at some coverage that week instead of shutting down that department. Do we ever take a course together? Sure—and just like everything else, we plan 6 months ahead and budget accordingly.

Is this an investment? You bet, and there will be times when you’ll be scared. But if you commit to even 1 year, what you’ll find is a galvanized team with new ideas, a sense of purpose, and new goals and higher levels of care that they can achieve. This ain’t bull. It’s real but it requires courage. Courage to be open to change. Courage to invest in a staff that might not be here tomorrow. So what? What’s your alternative—to stay in the horizontal envelope of nongrowth?

As the doctor, you will witness increased case acceptance based on increased confidence, whether it is deserved or not. Chances are it will be deserved. More education will result in less vulnerability to “fad” restorations or redos, because of your increased knowledge of restorative materials, occlusion, and treatment planning.

There is simply no way that you won’t experience exponential growth in your clinical care when you dedicate to the lifetime educational commitment required by a high fee-for-service practice.

MEETING 3: MEASURE YOUR PROGRESS

This meeting, as well as subsequent meetings, will serve as the yardstick. They can be a short portion of your monthly meeting. Set aside 20 minutes. This is when you review the results of your surveys. Find out if you are earning the privilege of a high fee-for-service practice.

Again, this “wet-fingered clinician” understands that your plate could be full, and the thought of surveys or getting staff to do more is unnerving. I have to go back to the beginning! Do you want to get paid? If you increased your income to $750,000 over 3 years with the same work that provided $500,000 this year, would that be worth rallying the troops to make sure you’re earning it? I think it would.

CONCLUSION
Let’s be honest. Not all offices embrace the same commitment over the course of a career. A wide range of roads can be taken. Often, our professional interest takes a back seat to other “stuff.” Hobbies, sports, or secondary careers predominate. The result is a lack of continued education, and sometimes, a lack of excellence. Flourishing in a high fee-for-service practice has infinite rewards, the greatest of which will be the satisfaction of success on a—pardon the cliché—“road less traveled.” The truth is that mediocrity is far less challenging. It doesn’t require any systems. The truth is that a high fee-for-service practice has a price that will not be worthwhile to some. However, if the present snapshot of your practice includes a spiraling, lost-in-space organization bound by the “handcuffs” of stagnation, the “truth” could set you free.

Dr. Rasner is a general practitioner from Bridgeton, NJ. Despite practicing in one of the more economically challenged areas in the country, his practice has evolved as a model of enduring success. Combining clinical excellence, extraordinary customer service, and visionary leadership, he has created the “dream” practice on which he lectures both nationally and internationally. He can be reached at (800) 337-8435.