SHALL I RAISE FEES IN
2017?
Answer—Yes. The rule of thumb: raise fees annually by about
double the inflation rate. The Consumer Price Index (CPI) increased 1.46% in
2016; hence, a fee increase of approximately 3% is recommended.
Why double? If you increase fees by the inflation rate only,
your practice is simply treading water rather than growing financially. The
extra gained by doubling the inflation rate can cover staff wage increases, other
jumps in overhead, or investments in capital improvements to equipment or
office facility. Additionally, this rate of increase can raise profit. Remember,
PROFIT is not a dirty word. One cannot give from empty pockets; and any
business, dental practices included, will close its doors if the profit level
does not stay healthy.
If yours is a practice with a significant number of patients
in managed care, raise fees anyway. Those patients not enrolled in managed care
will pay at the new fee level. Also, the fee increase raises the fee profile
for dental practices in your zip code; thereby, eventually raising the
reimbursement rate paid under managed care contracts. As you know, managed care
providers require participating dentists to submit fees for approval annually. If
you do not raise fees for several years, managed care companies will deny
larger increases down the road to compensate for those no-increase years.
In summary—yes—my recommendation is to increase your fees in
early 2017 by 3% if your fee schedule has been adjusted over the years to
compensate for inflation. If you have not kept up with the inflation rate, you
may need a more significant, but reasonable, increase. And, henceforth, make an
annual fee adjustment.
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