The secret to successful fee setting: dare to be different

Fees in UK private dentistry seem (to me) to be pretty much the same as they were 15 years ago. I understand the reasons for this (recession, more competition, principal fear) but low or modest private fees will be really squeezing your profits.

What do I mean by low or modest private fees? Fees set at something like £170-£210/hour or fees that produce an average daily gross per surgery of around £1,000/day.

I have yet to see any believable or sensible rationalisation for private dental fees, in reality they’re just made up! And, in most towns and cities (outside of west London) they’re all very similar.

Sometimes dentists tell me this is what the market will stand. Really? How do they know? Is there any research to back this up? No…

The most likely explanation is that practices copy all the other practices in their area so as not to stand out. (I’ve actually seen practice managers average a selection of local practice fees in order to set their own!)

So, where are the opportunities here?  Well, the last thing I would advise anyone to do is to charge the same as everybody else in town. I would want my practice to be either the cheapest or the most expensive, there’s no real point in getting lost in the middle.

Whether you want to be at the bottom or the top will depend on your:

  • Proposition (if you want to be an easyJet practice you will have to charge easyJet prices)
  • The needs of your target market (there are reasons why some towns don’t have a Porsche garage!)
  • Your positioning in the local market, whether you’re cheap and cheerful or bespoke — your fees have to echo this

And your fees will determine how long your appointments can be and how many folk you will need to see in a day. The cheaper the fees the more patient throughput you will need.

Here are some important fee setting dos and don’ts:

  • Don’t charge for time, charge for an item of treatment. If the patient needs two of the same items the fee is double (for a single half hour filling at £95 book half an hour; for two fillings bill £190 and book 45 minutes).
  • Don’t take the NHS way of charging for dentistry and simply change the NHS fees to private fees. (I know England and Wales are running the UDA system but many practices are still using the remnants of an old NHS fee scale with private fees added.)
  • Use your hourly rate as a guide to setting a fee for a treatment item, not as the only way to come up with the fee.
  • Have more than one hourly rate. For example, have two hygiene hourly rates, one for active treatment and one for maintenance, and two dentist hourly rates, one for basic treatment and one for advanced treatment.
  • Use time plus lab and calculate a mathematical bottom line fee. Then ask yourself, what will people pay for this item of treatment? If it’s a check-up they will want to pay less, if it’s a crown they will be willing to pay more. This is called the “emotional fee” and it’s the fee that patients are prepared to pay!
  • Have a range of fees for some items to give patients choice. (Think of the number of 3 series models BMW produce!) For example: premier crown £747; advanced crown £627; standard crown £507.
  • Don’t have pounds and pennies on your fees, it looks mad and amateur!
  • Don’t discount fees. If you are doing more than one of anything and you have to discount to close the treatment plan, offer a maximum of 7.5 per cent discount (if you are 35 per cent profitable as a practice a 7.5 per cent discount on a £627 crown means a profit reduction from £219 to £175, a 20 per cent reduction in profit!).
  • Don’t let your associates change the fees on your practice management software (Oasis lock their software I’m told).

From the patient’s perspective, they generally have little idea how much a crown will cost and whether they say yes or no to one will depend more on the quality of their relationship with the dentist than the actual fee. Your patients want to be sure that:

  • They are getting good value
  • Your fees are affordable (you have ways to make it easier for patients to pay — see JJF’s blog this week on finance)
  • They believe that it is the best solution for them

In terms of assessing the value of the item you really want to sell, the £747 premier crown, your patient is more likely to say yes if they know they can:

  • Have an appointment at a time to suit them and they can park easily
  • Enjoy the reception and patient lounge environment
  • Be impressed with the efficiency, friendliness and knowledge of your reception team
  • Know that you will be running on time
  • And that the appointment will be painless and comfortable
  • And that the solution they have chosen will look and feel great and last them for a very long time

If you would like some help with setting your private fees contact me for a chat.

m. 07770 430576



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