By Mary Osborne
Everyone has an opinion about what a fair fee is in dentistry today. Patients think they know what it should be (usually less than what it is.) Insurance companies have their opinions about what our care, skill, and judgment is worth. Consultants and other experts have statistics, comparisons, and formulas that promise to provide the right answer. In my conversations with dentists and their teams I hear their concern about a changing health care model and changing economic model. They see that systems and structures of the past may be less relevant in the future. As I look at an emerging and evolving health care model I have been working with what I think of as a formula for health: the health and well being of our patients, and the financial health and viability of our practices.
CSJ + PO + FF + MOP = Health
Care, Skill and Judgment + Preferred Outcomes + a Fair Fee + the Method of Payment = Health
As I said in earlier articles on this formula, the first part of the equation is the only part completely within our control. Our care, skill, and judgment represent what we bring to the equation. The next part, the Preferred Outcome, has to do with the values our patients bring to the process. The next part, a Fair Fee is where the two intersect. There are two primary models that have traditionally been used in dentistry:
1. What the market will bear. Many offices rely on comparisons with other practices to determine their fees: Conversations with other dentist; reports from local and national surveys; fee schedules from insurance companies. All provide information about what others are charging for various procedures and offer insights into what patients are accustomed to paying. If practices agree to be preferred providers in a given plan they accept the fees stated in their agreement as fair for those patients. For other patients practices can set their fees either higher or lower depending on where they choose to position their practice in the marketplace.
2. Overhead and profitability. Another method for determining fees is to assess what it costs to run the business, add the profit you want to make, then figure out the average amount you need to generate per hour to achieve that. Once you know the amount you need to generate per hour you can base your fees on how much time it takes to provide each service.
Both of the above methods have been used with some success for many years and will continue to have some relevance, but they are inadequate in mapping the future. A more philosophical definition of a fair fee — a fee that allows the dentist to feel well rewarded, and that the patient is happy to pay — seems more appropriate. This definition can include the other two methods, but requires greater and greater creativity as we move into new models of health care.
Creative Communication: Our patients’ ability to find value in our services is directly related to our ability to show them how what we offer can alleviate their fears and meet their hopes and dreams. As decisions about how to pay for health insurance moves from employers to patients, they will become more savvy consumers. Some will base their choices only on cost, and some will become more discerning. We have an opportunity to help them become more discerning. Where is the potential in your practice to help patients who already value your practice become more discerning?
Creative use of Resources: New models for providing services are emerging in every sector of the economy. Convenient scheduling, use of technology, and personalization of service are increasing in value. Patients and health care providers alike desire flexibility and efficient use of time. The time is ripe with opportunities to make our work more enjoyable and more rewarding in every way. How could you alter your current model to make better use of your facility, your time, or your energy?
Creative Staffing: What are the aspects of care that must be done by a dentist or hygienist, and what ways can others provide a high level of care?. The traditional positioning of administration, hygiene and assisting can open up to a more flexible, innovative model. Hiring takes on new dimensions. As we look for ways to be more efficient we can also find ways for work to be more fulfilling for highly skilled and talented employees. Look at your current staffing model. Ask yourself if there is one team member whose skills could be better used somewhere else in the practice. How could you use those gifts and talents more productively someplace else?
Creative Mix of Services: I already see practices developing all inclusive plans for patients that are not dependent on insurance codes. As rigid structures and systems become less relevant opportunities open up for attention to what really enhances health; comprehensive fees that focus on results more than on procedures. Where can you begin to develop one fee for a service that falls outside of the traditional model? Learn to communicate one values based fee to hone your skills for models of the future.
The level of each practice’s care, skill, and judgment determines the fee we deserve to receive, but it does not mean that we are entitled to any given fee. We are responsible for how we use our resources; for how we structure our mix of services; and for how we choose, utilize, and grow our team. The more confident we are in our ability to manage those variables, the more likely we are to help our patients see the value of our care. Regardless of the model of practice we choose, it will always be our responsibility to convince enough people to choose enough of what we have to offer to allow our practices to thrive.