Fee lessons learned from building a new office

Since I think that the way we in dentistry determine our fees is so ridiculous, I always am curious about how other professions determine fees. I have learned a valuable lesson with the construction of our new Las Vegas Institute (LVI) facility. I was thinking that if we in dentistry applied our fees the same way that the construction industry does, how would it work? I`ll give you some background on our experience with the new building.

William G. Dickerson, DDS, FAACD

Since I think that the way we in dentistry determine our fees is so ridiculous, I always am curious about how other professions determine fees. I have learned a valuable lesson with the construction of our new Las Vegas Institute (LVI) facility. I was thinking that if we in dentistry applied our fees the same way that the construction industry does, how would it work? I`ll give you some background on our experience with the new building.

At first, we consulted an architectural firm and a contractor. The architectural firm bid the project based on the cost to build the building. The contractor, to get the bid, comes in with a low estimate of construction costs. They are at odds with each other. The contractor wants the bid to be low to get the job, but the architectural firm wants the bid to be high because it works off a percentage of that bid. Let`s first dissect the architect`s position.

What difference should it make if the architect designs a very expensive marble floor or a vinyl floor? It takes no longer for the architect to draw plans of the vinyl squares vs. the marble squares. It takes no longer for the architect to design a stucco wall than it does a granite wall. It does make a huge difference in the cost! Why should it? Even though I have pressed them for an explanation, they have yet to provide a satisfactory answer. Pure and simple, it`s because the architect can get it!

What about the builder? He gives us a quote per square foot, so we decide to use him. Then the truth comes out. "Oh, you want faucets with these sinks?" Although that may be a bit of an exaggeration, it`s not far from the truth. What they bid on is cheap stuff. So, you upgrade. Now, the cost is more. Can you imagine saying to a patient after quoting a fee for a procedure - "Oh, you want to be numbed? That will be much more!"

But the worst problem is the inability to be truthful about estimated costs. For example, we got started late. So, I asked the owner of the construction company how much it would be to have the workers go overtime and how much time it would save us. I was told that it would cost about $20,000 and we would save a month of the estimated five-month construction time. However, when we got down to starting construction, the estimated completion time increased to six months and even the overtime wouldn`t help. On top of that, the estimated cost of overtime would be $100,000. When we asked the company owner about this, he said that he gave the estimate before we enlarged the building. We added a few hundred square feet by moving one wall farther out. It made no difference in construction time or materials to move that wall out. The truth is, he gave us the estimate just a couple of months ago, long after we made the change.

Anyway, the point is that we need to understand all businesses so that we can improve ours. We learn from the bad things businesses do, as well as the good things they do. An experience such as mine should make you aware of how your patients would feel if you underestimate the cost of a procedure only to surprise them later with the true value. Instead of piece-mealing the restorative process, I think you should quote a price for the complete restorative process.

Some of you may be thinking that this high price will scare patients away; that it`s better to underestimate your fee to get them in and then surprise them when they have committed. You might be right, but just think of how you would feel if that were done to you. Would you rather have a practice of happy, committed patients or a practice full of disgruntled patients who think of you like I think of the construction industry?

On the other hand, unlike the architects, you should charge the same for an indirect resin restoration as for a gold or porcelain restoration (except for maybe the lab fee difference). Just as the floor covering makes no difference in the amount of time it takes to design it, the same applies to the material of choice to restore teeth. It takes no longer for you to prepare and seat a porcelain restoration than it does a composite, but I would bet that most of you charge more for porcelain. Why? You can get it! The truth is that we undercharge for the composite-type of restoration, not overcharge for the porcelain.

Think long and hard about this and do what is right. Set your fees the same per tooth, regardless of the size of the restoration or the material (except if the lab fee difference is significant). I strongly believe that your fee should be the same for any indirect restoration done on a tooth. It shouldn`t matter if it`s a crown, inlay, or veneer, since they all take about the same amount of chair time.

However, once you establish a reputation for providing superior dentistry, you can demand what you are worth. Don`t feel guilty, just as architects don`t feel guilty charging more when their bid is higher. The truth is that we dentists charge those who can afford it fees that poor people can afford. Therein lies our profession`s problem.

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