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 By Neil B. Gailmard, OD, MBA, FAAO, Editor July 26, 2006 - Tip #236 
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Jump-start Your Practice: Part 2

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Additional Information

This series on jump-starting your practice is based on the premise of making your practice appear to be the way you hope it will become. Act now as you mean to go. Visualize the practice you want to build and make your present office look and act like that in every way possible. This strategy involves doing things before they seem necessary. By emulating the high-level practice, your practice will become one. It's not hocus-pocus; high-powered practices have certain traits that generate more business. These traits may involve excellent customer service, an outstanding professional image or other competitive advantages.

Jump-start #2: Raise your exam fees

Once again, I'm advising taking an action that, on the surface, seems contrary to what you might do if a practice was not busy enough. Why would more patients come to your office if you raised fees? Most ODs worry that a fee increase will drive away the few loyal patients they have. Here is why a fee increase will help grow your practice.
  • There will be an immediate increase in profit. That extra cash should be reinvested in the practice in the form of more staff, a new instrument, a new logo and exterior sign, a remodeling job... whatever your practice needs the most. The new and improved service and physical facility justifies the higher exam fee and the higher exam fee pays for the improved service and facility. Which should come first? It doesn't matter - do them both at once.
  • A higher fee structure raises your confidence and your pride. Your vision of operating the best practice in the state immediately begins to take shape because the best practice in the state would have higher fees.
  • Your perception in the community just went up because people judge technical services they can't fully comprehend by the fee. If your fee is the highest, you must be the best.
How much to raise them

I have successfully raised fees in my own practice and in client's practices in fairly large increments. Very few patients really keep track of what your exam fee was last time they were in, and even if someone does, so what? Fees are like prices on anything - they go up! How much to increase exam fees depends upon how woefully off-base they are. I have known doctors who feel a 10% increase in fees is a very large increase, but they are charging $60 for an exam with refraction. That increase is a whopping $6 bucks! It will still help the bottom line, but it's a missed opportunity to do something that will really make a difference in the practice. That fee will likely not be raised again for over a year; maybe not for two or three years. Since you're raising it, why not raise it $25? At $85, the exam you are providing is still a great bargain! The vast majority of patients still won't notice and even those that do notice won't leave.

How to raise them

Just do it... with as little fanfare as possible. You are allowed to raise your fees without notice. What good would it do your practice to make some announcement? Sending a message that you and your staff are defensive about fees or that they may not be justified is the one action that will make a patient balk at the fee. Act as if it's business as usual and no one pays any attention.

Erase any feelings you may harbor that your services may not be worth a high fee and talk with your staff about it. After all, you provide the very best exam technology and patient care, don't you? And your customer service is second to none, right? If so, trust that there are many people willing to pay for that excellent care.

I strongly believe that the exam fee should be stated over the phone to every person who schedules an appointment, even if they don't ask. Your staff need not say that the fee went up, just say what it is and discuss if insurance will be accepted or if payment will be due at the time of the visit. If your fee structure is so complex that you can't quote the fee without seeing the patient first, I think that's a problem. Quoting the fee and explaining the payment policy in advance is a major step in achieving patient satisfaction. Patients want to know and they deserve to know.

On the day you raise the fees, you might tell your staff that if any patient responds by saying they were quoted a lower fee than what is being presented, the staff is empowered to explain that there was a fee increase, but that the office will substitute the old fee since that was quoted. I doubt that anyone will respond that way, but it's a good policy just in case. That policy can end after about two weeks.

But it will make no difference with vision plans

This may be the OD's favorite reason for not raising fees; it won't make any difference anyway. Well, if it won't make any difference then why not raise them? You certainly won't hurt anyone's feelings at the vision plan headquarters if your usual exam fee is much higher than their maximum payment. They won't complain or even notice. Most practices do have some private pay patients and the owner is worried about offending them, or thinks it would not be fair to charge so much more to this valuable patient group.

What about fairness to you? You probably believe that your professional judgment, your staff and your physical facility is worth much more than your current exam fee. Sure, the private patient is valuable, but why should he or she pay so much less than you are worth? I can see why a vision plan should get a discount on your fees (assuming they deliver patient volume or potential volume), but why should all private patients get a discount? You can't give everyone a discount.

The volume discount you grant to vision plans is a business decision that should not relate to your usual fee. Just because some vision plans pay ridiculously low fees and you accept them does not mean that is what your services are worth. It only means that you feel the volume of patients the plan delivers is of sufficient value that you are willing to accept a huge discount for that group. If you no longer feel that way then drop the plan.

My friend Jerry Hayes sums up fee levels in a very clever way as he makes the point that fees are not the most important criteria when patients choose an eye doctor. He starts by asking if there are any practices in your area that have lower fees than you. Generally the answer is yes, there are lower fee providers. He then asks "Why don't they have all your patients?"

Best wishes for continued success,

Read Past Tips Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week

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Send questions and comments to neil@gailmard.com.

Dr. Gailmard offers consulting services to eye care professionals through Prima Eye Group; information is available at www.primaeyegroup.com.

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