Running a successful dental or medical practice requires balancing exceptional patient care with sound financial management. One often-overlooked aspect of this balance is the need to periodically review and adjust your fee schedule. While some practitioners might feel hesitant to increase fees, especially in a competitive market, it's crucial to recognize that regular fee adjustments are necessary for the health of your practice and, ultimately, the quality of care you provide.
Cost of Living Adjustments: Not Enough
Many practices implement a basic cost of living adjustment (COLA) each year. While this approach accounts for inflation, it often falls short of covering the real financial needs of a practice. Here's why:
Rising Operational Costs Rent, utilities, medical supplies, and staff salaries tend to increase annually at a rate that can outpace standard inflation. If you rely solely on a COLA, your practice may struggle to cover these rising costs.
Technology and Training Staying competitive often requires investing in new technology, equipment, and ongoing training for your team. These expenses ensure you deliver cutting-edge care but require financial resources beyond a minimal fee adjustment.
Value of Expertise As you gain more experience and refine your skills, the value of your expertise increases. Regular fee adjustments reflect your growing proficiency and the premium service your patients receive.
The Strategic Approach to Fee Increases
To maintain the financial health of your practice, here’s a strategic approach to raising fees:
Annual Review Set aside time each year to review your fee schedule. Analyze your costs, industry benchmarks, and any changes in patient demographics or services offered.
Transparent Communication Patients value transparency. When notifying them of fee adjustments, frame it as part of your commitment to maintaining high standards of care and keeping up with advanced treatments.
Focus on Value Rather than simply increasing prices, consider enhancing patient experiences. This could include improved technology, additional amenities, or extended appointment availability, making the fee adjustment easier to accept.
The Consequences of Not Raising Fees
Failing to adjust your fees can have long-term repercussions. Over time, stagnant fees can erode your practice’s profitability, limiting your ability to invest in growth, attract top talent, and maintain quality care. Additionally, significant fee increases after years of inaction may cause patient dissatisfaction and attrition.
In conclusion, reviewing and raising your fees annually is not just about keeping up with inflation—it's about ensuring the sustainability and success of your practice. By taking a proactive approach, you can maintain financial health while continuing to provide exceptional care.
Running a successful dental or medical practice requires balancing exceptional patient care with sound financial management. One often-overlooked aspect of this balance is the need to periodically review and adjust your fee schedule. While some practitioners might feel hesitant to increase fees, especially in a competitive market, it's crucial to recognize that regular fee adjustments are necessary for the health of your practice and, ultimately, the quality of care you provide.
From your New Jersey and New York Dental CPA and Medical CPA, also serving clients Nationally.
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