Fee schedule. Synonymous with gut punch. How patients react whenever you tell them the price of a crown.
Whenever I broach the subject… for you endo nerds… is like dumping a whole carp of hypo in your mouth. Such a distaste. Any consultant can tell you could produce more by telling you to raise your fee’s. That’s too easy.
What’s more important during an inflation filled year is to think ‘how much’.
CPI will easily creep over seven and a half percent this year. And if you’ve read any of my past episodes, I touched upon that this index is only an average. With Russia bullying Ukraine we’re seeing pumping gas almost double the price of a couple of years ago. A 100% increase.
This chart shows what an avg basket of goods will cost you from 1944 to 2022. What would’ve cost you $35 in 1944 will cost you $281 in 2022.
These higher creeping prices tax every one of your staff. What you thought of as a livable wage now looks like minimum wage. Target stores now offer in their most competitive markets a starting wage of $24/hr. Suddenly your $20/hr front desk gal is trading in free Invisalign trays for a retail discount.
And while we all get hit by inflation, dental insurances laugh in our faces, reducing fee schedules. The math works out to slim practice margins even more.
As private practice gets nipped and tucked by corporate and insurance companies, there is one natural way for us to curb the pain. Increase your fee schedule.
Unfortunately not a little this year. It’s going to need to be at minimum at the rate of CPI. A $65 periodic exam last year is going to come in at $70 or more. That’s to just let you offset the wage increases for staff, equipment investments and supplies.
Maybe there is a silver lining in all this inflation. Higher prices of everything, makes higher priced dentistry not look so bad in the overall market.
But as the Fed increases interest rates through the next few months, it makes getting loans hard to obtain. With less cash sloshing around, things tighten up. Businesses needing a loan find it hard to come by. Less hiring kicks in because of the cautious sentiment. This is the macro business environment.
More of my personal theory, because there is still a surplus of pent up pandemic euphoria to spend, we have a lot of cash on the sidelines. Dentistry is well positioned for the short and long term for patients. So much neglect from staying in and masking those yellow plaque glazed chompers leave some very self aware citizens as mandates lift. Anti Social Distancing behavior becomes more normal. You can now stand close enough to your friend to smell perio breath again.
Think twice on how much you’ll need to raise your fee’s. I think this year will be one of the highest as an overall percentage you’ll have ever seen.