Leslie Crowther and his 'Come on down' rallying call hit the nail on the head when he announced 'the price is right' and this adage is as applicable to dentistry as it is to any other business. But setting prices for a healthcare service and understanding how to provide patients with the right blend of treatments in the most efficient way possible requires accurate internal business information and an understanding of how to apply this to achieve the desired outcome.
The product you supply and the price you deliver it at are important and success ultimately depends not only on your ability to tell people about the treatments and services you offer, but also on your ability to meet patient expectations in terms of treatment offering, quality of care and treatment outcomes. Making sure you deliver all this at a price that is acceptable to your patients but also has regard to practice costs and the need for profitability completes the process.
To fully grasp how to provide patients with the right blend of treatments in the most efficient way, you need to have the relevant information at your fingertips. Being busy does not necessarily equate to being profitable and days spent on an endless routine of scale and polish will leave you clinically unchallenged and does not generate the requisite income to establish a successful, profitable practice.
Having greater insight and more in-depth understanding about the 'product' you are offering is important. Not all dental practices are the same and honing this offering so that it matches patient demands requires vision and planning. Understanding which procedures you perform most gives you the ability to look in greater detail at your provision and ensure that every aspect of the practice is running at its optimum efficiency.
Any practice management system worth its salt should be able to instantly run reports on the top 10 invoiced treatments in your practice. This data can then be interrogated further to provide you with information that can guide future decision making. Similarly you should be able to easily obtain information on the numbers of patients you refer and for which treatments, from this you can think seriously about opportunities for expansion or bringing specialists onto your own premises to provide complex work that you may not personally want to undertake. In this way you are able to incorporate specialist services within your practice 'brand', adding value and serving to enhance your reputation.
Price is sometimes considered a dirty word in the arena of dental treatment. Largely due to an historical allegiance to the NHS, many dentists find the prospect of talking money to patients very difficult – we only need look at the successful career of Ashley Latter as evidence. But price is important to every business and setting realistic, competitive prices that fully remunerate you for the care and treatment you are providing is essential for the overall health of the profession as well as the nation. Dentists often speak in terms of how much they 'gross', but this only tells half the story, particularly if this figures is based on gut feeling.
In economics, theorists talk about price elasticity of demand. Put simply this is how much you can increase (or decrease) a price before consumers will stop buying or seek alternative products elsewhere. An elastic price is one which can be 'stretched' because the product has 'value' which consumers are willing to pay for. As a dental practice you have certain unique qualities that cannot be filled by any other provider - you have patient loyalty and trust which is not easily substituted for a nearby competitor. Pricing must be realistic and defendable and you have a professional duty of care not to overcharge
There are a number of price comparison sites in dentistry which to my mind is a worrying development and one which takes little regard of the professional relationship between patient and practitioner. But in these times of economic austerity, dental tourism has become a common term and has even been recommended on consumer sites. In the face of this sort of competition it is unsurprising that some private practitioners have opted to cut prices and offer special deals on certain treatment and whilst this is fine as a short-term campaign, the ability to maintain a price structure below a level which ensures overall profitability is a strategy that simply cannot exist in the long term.
Just like the need to understand your patient base, you also need a clear understanding of the number of available hours within your practice and the number of planned treatments that need to be delivered to break even and achieve your profit target and this information, when combined with the your top 10 invoiced treatments, will start to give you an objective overview of the status of your practice.
No-one is asking dentists to lose sight of their professional commitment to provide the treatment needed to maintain good oral health and not to over prescribe treatments on the one hand or supervise neglect on the other. To have solid accurate up-to-date information about the running of your business is simply good business practice.
Although we all understand that promotion through glossy brochures and slick websites is the sexy part of marketing, getting your product and its pricing right is just as, if not more important, because treating patients when the price isn't right is no laughing matter.