1. The Dental Practice: Business Foundations
Fee Policies in the Dental Office
Dr. Dave Willis
Dental Simulations

2. Fee Setting Issues Where you are in your practice cycle
What were the fees of the former dentist?
How much “insurance” do you do in the office?
How much do you want to maximize profit (vs. make “adequate” living)
How aggressive / sophisticated are you in your business practices?

3. Fee Setting Objectives
Market Skimming
Satisficing
Market Penetration

4. Fee Setting Methods Cost Based-Method Demand-Based Method
Competition-Based Method

5. Methods of Fee Determination
Cost Based Third party programs
Demand Based “Specialty” service
Profit maximization
Competition Based UCR

6. Elasticity of Demand
Question: Would you rather sell (do) 20 crowns a $1,000 each, or 33 crowns a $600 each?
Answer: It depends
1. Your practice growth phase
2. The size of your patient pool
3. Your practice philosophy
4. How much you enjoy crown and bridge procedures
5. Your insurance plan participation
6. Your practice’s cost structure

7. When and Why to Raise Fees
Annual (Jan 1 or July 1)
Every 6 months
Occasionally
Why
Raises profit
Keep up with inflation
Annual “regular” increases vs large “catch up” increases
Increases the value of the practice

8. How to Raise Fees Flat Percentage Fee Positioning
Median
Percentile
Frequency of Procedures
Third Party Determination

9. Fee Positioning Dr. A Dr. B Dr. C Fees 10 % Below Average 10% Above
Prophy
$45
$50
$55
- 10%
+ 10%
Gross OH
130,000
Net

10. Fee Positioning Dr. A Dr. B Dr. C Fees 10 % Below Average 10% Above
Prophy
$45
$50
$55
- 10%
+ 10%
Gross
180,000
200,000
220,000 OH
130,000
Net
50,000
70,000
90,000
- 29%
+ 29%

11. Louisville Fee Profile, HPC, LLC Dec 2009

12. Louisville Fee Profile, HPC, LLC Dec 2009

13. The Dental Practice: Business Foundations
Fee Policies in the Dental Office
Dr. Dave Willis
Dental Simulations