Now is the time to review your practice’s performance and set new goals. Adjusting your dental practice fees should be a top priority as part of this process.
Many dentists feel uneasy about raising fees, often worrying they’ll alienate patients. This apprehension is understandable—discussing treatment costs, insurance coverage, and out-of-pocket expenses can be uncomfortable. However, it’s vital to recognize that regular fee adjustments are essential for maintaining a healthy, profitable practice. Just as expenditures for rent, supplies, equipment, and salaries rise yearly, your fees must keep pace.
Why Raising Fees Is Essential
If your profit margins are around 35% of gross collections, it may be time to increase production, improve collections, or raise fees. According to recent data from Burkhart Dental’s 2024 report, most practices should consider annual fee increases of around 5%, although the final percentage may vary based on economic conditions.
How to Approach Fee Adjustments
- Focus on Key Procedure Codes
Start by balancing your fee schedule. About 30 procedure codes typically represent 90% of billable production in most practices. Ensuring these key codes are competitive and sustainable is critical.
- Use Reliable Data Sources
Look for accurate fee benchmarks within your geographic region. Dental supply dealers, insurance claim companies, or professional consultants can offer reliable data. Fair Health is one option, as it uses aggregated billing data from private practices across the country.
- Adopt a Unified Approach
Instead of adjusting individual fees based on patient or insurance perceptions, implement an across-the-board increase once a year. Incorporate this into your practice calendar to maintain consistency.
Communicating Fee Changes
Most patients are only familiar with hygiene fees or costs from recent treatments. Since fees for larger procedures might not have been top of mind for years, a modest annual increase usually goes unnoticed. However, large jumps—such as 10% or more—can unsettle patients. Small, steady adjustments ensure you remain competitive and cover rising costs without creating sticker shock.
Consequences of Delaying Fee Increases
Putting off fee increases can hurt your practice in several ways:
– Difficulty affording new equipment, software, or repairs.
– Inability to offer raises, benefits, or invest in updated technology.
– Risk of becoming the “cheapest dentist in town,” reducing the perceived value of your care.
Patients who value modern, high-quality dentistry will notice if your equipment appears outdated or if your practice lacks the latest technology. In cash-based practices, it’s especially important to emphasize added value, exceptional service, and state-of-the-art care to stand apart from the competition.
Aligning Fees with Financial Goals
If you’re not meeting your financial targets, that’s a clear indication your fees may need an update. Begin by setting realistic revenue goals for the coming year, then adjust fees to support those objectives. This proactive approach helps you stay on track with costs, grow your practice, and remain competitive in your market.
Moving Forward
Raising fees isn’t just about boosting revenue—it’s about sustaining a practice that’s well-equipped, profitable, and capable of delivering top-notch care. By taking time now to evaluate and adjust your fee schedule, you’ll position your practice for continued growth and success.
Schedule your fee adjustments, communicate them effectively to patients, and remain transparent about the value you provide. With a careful, consistent approach, you’ll maintain a thriving practice that patients trust and appreciate.