The question of fees will often come up with my conversations with Decompression Marketing Elite clients. How much should I charge? How do I keep fees competitive in my area?
These questions do not just pertain to practices with decompression tables. All of us, no matter what services we have in our offices, should be asking this question on a yearly basis.
How you answer this question can either ‘make you or break you’ in terms of business success. You may be the best doctor, the best adjuster, the most well-liked person in a 30 mile radius, but if you fail to set your prices correctly you’ll be out of business with a matter of time.
Most practices set their fees either based on insurance schedules or local competition. Neither of these is a smart way to do business. Let me explain…
Insurance companies are notorious for cutting what they will pay down to the lowest possible fee schedule. They are a “for profit” business, and expect to pay out a lower amount than what is regularly charged in your area. Using extensive research to justify they’re fees, they have calculated the lowest amount payable to you. So if you are setting your fees to match an insurance companies schedule, they are much too low. And if your fees are below the insurance fee schedule, you’ve been too low for a very long time. Not because you could have gotten more from the insurance company, but because you have been selling yourself short for a long time now.
Remember, not all patients are insurance patients. Many of you see a combination of PI, Work Comp, cash and other types of cases. To set your fee schedule based on one or two insurance companies reduced rates is hurting you all across the board.
The other common way to set your fee schedule by finding out what your competitors charge and trying to beat them with lower prices. Unless you’re running a non-profit clinic, this is the wrong way to set your fees. What if all your competitors are much lower than they should be? What if they still have the original prices they opened with 20 years ago? Maybe they do a ton of therapy, making their adjustment fees artificially low?
It is important to know what your local market is charging, but not so you can undercut their fees. You want to know the range of your competitor’s prices so you can set yours near the high end. That’s right, you don’t want to be the lowest in your area, but the highest. What other professional service is praised for their low fees? Do you go to the lowest priced dentist in town? How about sending your mother to the cheapest surgeon? Would you use cheapest attorney to represent you in a court case?
Here’s a case scenario. The highest price for a chiropractic adjustment in your area is $55, the lowest is $35 and the average is $45. What are your fees going to be for an adjustment? At least $55. But there’s not enough information here to effectively price your services.
Additional questions must be answered like…
- what other services will you be doing on an average visit
- how much will you be charging for these other visits
- how much time will be spent doing all the services a typical patient needs
- how many people do you have on staff and how much do you pay them
- what is your overhead
- and most importantly, how good is your marketing
If you’re marketing is good, you can charge a higher fee because you have plenty of new patients coming in. One person leaving because they are “shopping for a deal” won’t affect your business at all if you’ve got 30 more new patients waiting to get in this week. And this is fair, as prices are somewhat based on supply and demand.
The only exception to this rule of being at the top of your market’s price range is when you make a special offer. When running an ad in the paper with a special offer, for example, don’t try to have the most expensive exam and x-rays in town. This will only deter people from responding to the ad. Without seeing your office, meeting you and your staff, having their problem explained to them, etc., prices will speak loudly. So be sure to give them a good special offer to come, but make sure they understand it is a special price and this isn’t what all your fees will be like in the future.