Raising Prices Without Losing Patients

Filed under: Communication, Dental Practice

Dental practices around the country have been impacted financially in recent years thanks to factors such as a global pandemic, staffing shortages, and high inflation. While RAMP has provided advice to offset the revenue issues with tactics that include improved patient retention, increased treatment plan acceptance, and reducing no-shows or cancellations, it may be the right time to consider raising prices.

Increasing fees for your service is seldom popular with patients, but it’s often a necessary response to difficult economic times or simply to maintain the bottom line. There are several ways to determine the need for an increase, as well as ways to handle it in a patient-centric manner.

Evaluating Your Practice

First of all, determine which services clearly aren’t achieving an ideal return on their investment and adjust for the new year. Small incremental increases in certain areas may make a big difference on the books. Does any dental or office equipment need to be upgraded to meet the demands of today’s health care? New technology costs money before it provides value you can see.

Is continuing education required for you or your team members that will ultimately benefit your patients? Adding new services like sedation, aligners, or implants can be a profitable investment as well as the natural catalyst for rate increases.

Most importantly, evaluate the quality of your care. If your practice is staffed with a top-notch team, your offerings are in line with your business goals, and you have strong patient referrals and retention, then you can feel more confident in raising prices without fear of losing patients.

Moving Forward with Increases

Here are six ways to implement a hike in fees, practically and considerately:

  1. Increase fees incrementally over time rather than all at once. Dental practice consulting firm, Levin Group, recommends increasing fees by 1% every 90 days for a total overall hike of 5%. Smaller periodic increases are easier for patients to absorb, and research showed little reaction or attrition. Scaling up prices one dental code at a time is another way to increment a new fee schedule.
  2. Begin raising fees with new patients only. Consider a discounted rate or grandfather clause for existing patients for a set period of time (e.g. 6 months to 1 year) before the new fees kick in fully. This shows appreciation for your loyal patient base.
  3. Promote incentive programs like pay-in-full discounts or annual membership plans that can offset some of the fee increases. Even a one-time discount on a service when implementing the increase can strengthen patient loyalty.
  4. Many patients pay for dental care out of pocket or have high insurance deductibles. Consider offering payment options or third-party financing to assure patients that you want to work with them to continue providing quality, affordable care.
  5. Provide communication and transparency. Patients may not notice a bump in fees for crowns or root canals, but price increases for regular services should be communicated to patients a few months ahead of time so they can plan accordingly. Explain the breakdown of new fees and reasons for the increase, such as operating costs or new equipment purchases.
  6. New pricing may not affect your patients with dental insurance as much, but in order to get more impact on your bottom line, consider negotiating new reimbursement fees with your carriers. Do your homework ahead of time and present the reasons why an increase is necessary.

The key to making fee increases as fair and palatable as possible is through communication, phased rollouts, discounts for loyal patients, and overall value justification. Be open to feedback from team members as well as patients during the process. By taking a thoughtful, practical approach, you can help retain patients despite necessary fee adjustments.

At RAMP, we offer services such as patient reactivation and review generation that can complement these tough decisions in today’s economy. Contact us today and schedule a free strategic session.