As inflation grows, it can reduce overall profitability if the practice does not take steps to implement change. Practices can implement strategies to lower practice overhead by 4% to 8%, which is essential from a business standpoint. Each practice must determine the best way to fight inflation and measure results.
Increase your fees annually. When economic times become challenging, many dentists are afraid to increase their fees. Although a percentage of most practices receive insurance reimbursements -- and these are not likely to increase anytime soon -- there are fees to patients in the practice that can be increased. We suggest making increases in slow increments. Either increase fees each year by 3% or 4%, or increase fees 1% every 90 days until you reach that level. Increasing fees is one of the most effective ways to offset inflation.
Don’t forget to eliminate waste. Wasted time means wasted money. There are many tasks being done by habit that either no longer need to be done or could be done much more efficiently. Each practice should examine its systems and establish a daily checklist for every team member. By working through a checklist, you’ll identify which steps and tasks are necessary and which ones are not. This practice frees the team to focus on higher-level activities. When the team is more efficient and effective, inflation is offset, because the team can perform at a higher level. This improves practice performance as well.
Dr. Roger P. Levin is CEO of Levin Group, a leading practice management and marketing consulting firm. To contact him or to join the 40,000 dental professionals who receive his Practice Production Tip of the Day, visit LevinGroup.com or email firstname.lastname@example.org.
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