Cut your prices and your throat

Moving away from the NHS doesn’t mean practices need to embrace ‘low hanging fruit’ and a race to the bottom, Alun Rees says.

The standard (rough) way of setting fees is to decide how much you want to earn before tax every year (X), add the running costs of your business (Y) and then decide how many hours you want to work (Z).

Add X and Y and divide by Z to discover the gross income per hour you need to generate.

Depending upon how long you take to do certain procedures you know how much to charge per hour or per procedure.

‘Simples’ as the cute little carnivore said.

All is well as long as you stay in control of costs.

This system will not work for an NHS fixed contract, where the sums are different and simpler, in some ways.

Another growing exception is the race to the bottom that some ‘clear aligners’, are becoming.

Here I have observed ‘suggested’ fees, promotions plus increasing competition.

By attending an open-day a patient will be offered a price perhaps £1,000 lower than ‘normal’.

Some have even embraced the slippery slope of Groupon.

Swings and roundabouts

I have seen some practices quoting a set fee to include aligners and post-treatment whitening but taking no account of the difficulty of a case.

Encouragement, so I was told, comes from the suggestion that there will be ‘swings and roundabouts’.

Those with medium length memories will recall that phrase from the sales pitch for the 2006 NHS contract.

It needs courage and confidence in your product, service and value to ask the going price, it takes self-belief to take yourself out of the clutches of fixed price dentistry.

It’s ironic how in searching for ‘independence’ from the NHS and fixed fees comes an embrace of the ‘low hanging fruit’ of free enterprise and a race to the bottom.

But corporations don’t do irony, only bottom line and shareholder value.

Read more from Alun Rees:

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