A Decree on Fees
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GARY GERBER, O.D.
A Decree on Fees
Enjoy seeing lots of patients with little return? By all means lower your fees.
I've often professed that optometric services are severely undervalued, which results in most practices having an anemic fee schedule. Having just paid a plumber $214 for four minutes of service (I timed him) and my son's tennis coach $100 for a half-hour lesson, I'm even more convinced.
The three main reasons proffered about why optometric fees are in their current sad state of affairs: competition with other O.D.s, overall fee depression from third-party payers and concerns that raising fees causes a loss of patients. The thinking that encompasses all these reasons often goes like this: "There is so much competition that if I raise my fees, patients will leave my practice. And, since I participate in a lot of third-party plans, any increase in fees is a virtual one, since the insurance company won't increase their payments to me. So, why bother?" Let's examine each of these three areas to see if lowering fees is beneficial.
Too many O.D.s?
Is there an oversupply of optometrists: maybe, maybe not. I think many optometrists get this impression because too many O.D.s do the same thing. In this case, they charge similar fees. One way for any business to differentiate itself from other businesses is on the basis of its' fees. Marketers make a credible case that practitioners who use a higher fee than the competition have a competitive edge, and this is not an impediment to growing a business. After all, they postulate, prospective patients will think, "If he's more expensive than everybody else, he must be better."
Still, lowering your fees could also give you a unique marketing position. A noticeable and highly advertised fee reduction will attract more patients, making you the "inexpensive doc," so you should certainly be much busier.
Patients will leave my practice
During my lectures I often ask the audience, "Do you remember how much you paid at your last dental visit?" Rarely do any hands go up. Similarly, in surveying our clients' patients, we see the same phenomenon. The majority of patients don't recall the dollar amount they spent at their last visit. Therefore, logic dictates that it's difficult to compare a new higher fee to a previous lower one.
However, if you still think high fees scare patients away, then low fees should attract new patients. So, you could lower your fees and see more patients.
Insurance fee schedules
Let's examine two subtopics here. First, if you're paid the full amount you submit to an insurance company, you're probably not charging enough. This isn't "working the system" or a deceptive practice. Rather, using the well- established and documented Resource-Based Relative Value Scale (RBRVS) system, the insurance company has determined that the specific services you provide are worth a specific fee. Why not collect what they say you're worth?
If you're already "writing-off" fees because you're charging beyond what insurance companies pay, then as above, consider charging less and becoming busier. Once word spreads amongst patients that you're the place to go for a "deal on fees," why wouldn't you be busier?
The bottom line: Yes, I'm being sarcastic in my above analyses. The truth is that lowering fees could make you busier, but it's not going to make you more profitable. Bottom-line profits and healthy practices come from high-net dollars, not necessarily from high-patient numbers. Keep that basic yet important premise in mind the next time you're stressing about raising — or lowering — your fees.OM
|DR. GERBER IS THE PRESIDENT OF THE POWER PRACTICE, A COMPANY SPECIALIZING IN MAKING OPTOMETRISTS MORE PROFITABLE. LEARN MORE AT WWW.POWERPRAC TICE.COM OR CALL DR. GERBER AT (800) 867-9303.|
Optometric Management, Issue: July 2007