On the up

18 February 2022

A look at the benefits increasing fees offers private practices.

A look at the benefits increasing fees offers private practices.

As a profession, dentists tend to be averse to money talk, a trait described in an article in the British Dental Journal in 1994 as “the mental-fiscal drag”. Loosely explained, this is when a dentist knows the fee they should quote based on their hourly rate, but find themselves asking for a lower amount to please the patient.

If it is difficult discussing fee increases when times are good, how much harder is it during a pandemic? While it might seem counter-intuitive, dental practices in the UK should still be increasing their private fees, that is the view of Ross Brooke Dental, a specialist business firm led by dental accountants Linda Giles and Nathan Poole.

It’s natural for practice-owners to worry that increasing fees up could add yet another barrier and reduce attendance. Financially, everyone is having to dig a bit deeper and patients might instinctively be concerned about going to the dentist. But Linda and Nathan encourage private practices to banish those fears. If the practice is appreciated by its patients, they argue, they will understand the pressures facing a small business.

They have always schooled their clients to maintain a policy of annual price increases. At the annual review meeting with clients, they encourage them to plan their next price increase.

Linda said, “After establishing their hourly rate – likely to be between £240 and £360 – we check that it is being applied consistently. We can quickly identify practices where there is ‘leakage’. By this we mean the hourly rate is being undermined, perhaps because there are clinicians on the team who are not sticking to time or to the price list or, quite simply, the very common ‘mental-fiscal drag’.”

Pragmatic fee-setting
Nathan recommends that his clients price tactically, considering some of the appointment fees as part of their marketing strategy. For instance, first appointments are usually an opportunity to get to know the patient and it is worth setting a lower hourly rate to encourage the patient across the threshold in the first place, while charging more for treatment items to balance things up.

He explained, “If it’s your strategy to move as many private patients as possible onto a plan, both because it’s good for them and good for the practice, keep their fee competitive but realistic. We have had to help dentists who have been too generous to their plan patients and ended up being overworked and underpaid. We can help you sort out these issues but it’s better to plan to stick to an annual fee increase rather than find yourself in difficulty.”

Ross Brooke Dental recommends all the clinicians should be involved in discussions about fees. Linda said, “Everyone should understand the practice running costs so they are motivated to stick to the set charges. Your associates may be very surprised. It’s important for the whole team to appreciate that maintaining an efficient book, keeping all clinicians busy and collecting the fees charged is the engine that makes the practice finance work.”

Dentists’ earnings post pandemic
There have been two helpful surveys which shine a light on dentists’ earnings in relation to the pandemic, said Nathan. The first was in 2020 and was commissioned by the General Dental Council. The research was undertaken to get a clear overview of the implications of the pandemic both for the profession and for its patients.

On the issue of dentists’ earnings, the survey found that the economic impact of Covid-19 had been overwhelmingly adverse. Over three quarters of the dentists who responded said they expected that their income would decrease compared to the year prior to lockdown.

There were outliers bucking this trend, however; a small number of dental business owners – two per cent – reported that their income had increased or they expected it to increase by five per cent over the coming year. These were predominantly private practices.

Then in 2021, a survey by a commercial dental sales agency found that the dental market had made a good recovery with 35 per cent of those interviewed saying they had a higher revenue than pre-Covid in 2019.

Nathan commented, “What both surveys show is that successful private practices with loyal patients, many in a plan, can both survive and thrive despite dire economic challenges. Hopefully this will inspire business confidence in the future.”

Paul Hustler, a principal of Corn Street Dental Practice, a private practice in Witney, Oxfordshire, says that in the past he was guilty of mental fiscal drag. “You knew that you should charge £100 but when you open your mouth to give the patient the cost of the treatment, you say £50. It’s true, dentists don’t like talking to patients about money, especially when it’s time to put costs up but Linda has schooled me over the years. Every year we work out our hourly rate. We take inflation into account as well as any other differentiating factors, so we charge what we need to cover the practice costs as well as our own salaries.”

Dental inflation is a major issue, he says, because the costs of equipment and materials are high and everything is constantly going up. “Gloves became much harder to source, for instance and now cost 10 per cent more than they did. There are substantial items you must have and they are going up by more than the cost of living.”

Implementing small annual increases has paid off, however, for Paul whose practice has around 1,300 patients, of which around half are with Denplan. Satisfied patients keep coming back and there is a steady flow of new ones. “We have been inundated with new patients. Normally we get about 250 new patients a year. Last year we had 650 new patients.”

Practice-owner Donna Hill, principal of Trinity Dental Centre, Barnstaple, North Devon, says the issue of pricing is an annual discussion point with Linda. “She will remind me to put my prices up, I will resist and then always take her advice. We put our prices up by a small amount each year, sometimes in January and sometimes in April. We have never had any resistance from our patients.”

She continued, “I remember the biggest hurdle for me was putting the price of a filling up to £100. I felt I could not do this. Once I had sent the letter out I waited for patients to ring up and cancel their plan, but they didn’t.”

She says that the practice had to review prices in 2020 to help cover the cost of PPE. “We raised the fee for a check-up by £1 and all treatments by £10. One patient was surprised that we were not asking for a bigger increase. They value us and were just happy that we were open again.”

In summary, it’s a confidence-boost for practice-owners to learn their services are appreciated. Nathan explained, “Patients are expressing how much they value their dental teams by accepting fee increases. Dentistry is in high demand and with all your basic costs going up, this must be reflected in your pricing.”

References available on request.