Most doctors continued a policy of annual fee increases.
Most readers completed the questionnaires for the Dental Economics 2001 Fee Survey in April. At that time, the economy was already sputtering, but the September 11 terrorist attacks had not yet occurred.
Seventy-five percent of the 764 readers who responded to the survey indicated they would raise fees during 2001. The combination of the economy and the war on terrorists may have tempted some readers to change their minds. So Dental Economics asked dental consultants for an opinion.
"If a fee increase is warranted, do it! Base your fee increase on value, competitiveness with the market and profitability, and nothing else," said Amy Morgan, chief operating officer of the Pride Institute in San Francisco. "Therefore, the economic issues arising since September 11th warrant no change in pattern.
"If patients are affected by the potential recession, address the issue with a more flexible approach to financial arrangements, rather than by holding back on yearly fee increases. Flexibility in payment options will allow patients to get the dentistry they need and want in a financially less stressful manner."
Dr. Roger Levin, CEO of Maryland's Levin Group, said, "The fact is that dentistry, irrespective of terrorist attacks, has been less affected by the current recession than many other businesses. Although dentistry is certainly not recession-proof and some practices are starting to see a dropoff, patients still will visit dentists for necessary and other services. Based on this, the dental practice has a responsibility to increase fees in order to maintain profit margins.
"At the same time, it would be advisable to carefully analyze the amount of increased fees given the diminishing resources that many patients and families are experiencing today. It is also essential to increase the level of customer service and perceived value on the part of the patient so that patients do not leave specific practices in order to decrease costs in a less expensive office."
Dianne Glasscoe, CEO of Professional Dental Management in Lexington, N.C., adds, "Our economy was already showing signs of softening before the Sept. 11 disasters. It seems now that the initial shock is turning into an unprecedented determination to protect our freedoms and the capitalistic system that has made us great. That is encouraging."
She cautioned, however, that fee increases should be based on two factors. The first factor is the cost of doing business, and the second factor is the business owner's profit goals.
"Business owners have to use good judgment and planning when deciding how much a fee increase should be," Glasscoe said. "Doctors should have an idea about what their particular market area will bear. It may be too soon to tell, but my clients are not seeing any dramatic decreases in production or collections. That could change if company cutbacks continue and more people lose their jobs. I think we are all anxiously waiting to see how our economic situation will fare over the next six months."
Most of the doctors indicated that they raise fees annually (73 percent). States with 25 or more responses revealed the following regional patterns in regard to annually raising fees: Wisconsin (93 percent), Virginia (79 percent), Massachusetts (78 percent), Illinois (77 percent), Florida (73 percent), Missouri (72 percent), Ohio (69 percent), California (65 percent), Texas (64 percent), Pennsylvania (63 percent), and Michigan (54 percent).
• The statistics supported the concept of seeing fewer patients and charging more. Doctors who treat fewer than 40 patients a week (consisting of 33 percent of the responses) assessed higher fees than doctors who see more than 40 patients a week.
For example, doctors with a lighter workload typically charge $630 to $880 for a three-surface composite resin inlay. The fees for doctors with a heavier workload typically charge $550 to $620 for the same procedure. A labial porcelain laminate veneer will cost anywhere from $670 to $870 in a slower-paced office. A nearby practice emphasizing volume may charge in the neighborhood of $565 to $610.
• The experience level of doctors mattered very little, according to the survey. For example, doctors in practice for two to four years charge $136, on average, for a two-surface resin posterior restoration — $2 less than the average figure quoted by doctors with 30 to 34 years of experience. Patients visiting a doctor with five to nine years of experience for an anterior root canal are likely to be charged $417, $1 more than the veterans who have been at it for 25 to 29 years.
For most of the 18 services listed, doctors of all experience levels were close together in their fee ranges. There were some exceptions. For core buildup (including any pins), doctors with 30 to 34 years of experience charge $183, which is 15 percent higher than doctors with under 10 years of experience. The veterans also charged approximately 8 percent more for three other procedures: metallic inlays/onlays covering three surfaces; porcelain fused to high noble-metal crowns; and complete upper and lower dentures.
• Rural dentists (consisting of 25 percent of the respondents) still charge less than their urban and suburban counterparts.
Suburban dentists (half of the respondents) charge an average of $527 for a bicuspid root canal, while rural doctors charge an average of $437. In the suburbs, a three-surface composite resin inlay costs $619; out in the country, the average cost is $549.
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About who responded
• 53 percent have practiced between 15 and 30 years. 42 percent of this group see 41 to 75 patients a week. 73 percent indicated they raise fees "across the board" on an annual basis, and 77 percent anticipated fee increases in 2001.
• 26 percent have practiced under 15 years. 45 percent of this group see 31 to 50 patients a week. 75 percent indicated they raise fees "across the board" on an annual basis, and 71 percent anticipated fee increases in 2001.
• 21 percent have practiced more than 30 years. 25 percent of this group see 31 to 40 patients a week, and 21 percent see 51 to 75 patients a week. 67 percent indicated they raise fees "across the board" on an annual basis, and 72 percent anticipated fee increases in 2001.
• 20 percent of the responses were from three states — Massachusetts, Florida, and California.
Experts: Raise Fees Annually
"We definitely recommend assessing fees on a yearly basis. This is a sound business principle that is consistent and understandable to patients. They understand cost of living issues and yearly reassessments of prices, so this is not a shock to them.
"There used to be people who recommended bi-yearly incremental increases in fees. We don't agree. Most continuing care patients are on bi-yearly intervals, which would mean that every time they came into the office, the fees would be higher!"
Dr. Roger Levin
"Fees should be raised at least annually and more often as necessary. What many dentists do not realize is that inflation plays a significant role in undermining the real dollar value of collections each year. There are many practices that have the proper level of fees and they need to be raised annually in order to keep up with inflation.
"However, there are many practices that are significantly below current fee levels and may need to raise fees more often until they reach the proper fee level for services in their area. Some of this is determined by the level of profit margin per procedure and the overhead structure of the practice."
Professional Dental Management
"Depending on the practice, most dentists raise fees yearly across the board by a certain percentage. However, I have reviewed practices with fees that were so unbalanced that two annual increases were needed to bring the fee schedule more in line with the real costs of running the practice. Some doctors prefer to have two smaller increases rather than one large increase.
"Costs rise every year, so at least a yearly increase is necessary. When doctors fail to raise fees, the practice loses pace with rising costs. Then, doctors become disillusioned and discouraged with low profit margins and staff members frequently are not compensated adequately."