How to Determine an Appropriate Fee Schedule

Gary Takacs: This is The Thriving Dentist Show with Gary Takacs, where we help you develop your ideal dental practice, one that provides personal, professional, and financial satisfaction.

Gary Takacs: Welcome to another episode of the Thriving Dentist Show. I’m Gary Takacs, the Thriving Dentist Show podcast founder and co-host, of the podcast. We have a great episode for you today, and this is an episode that we have never covered in all of the, 15 years of, producing the Thriving Dentist Show. And the title of this episode is How to Determine an Appropriate Fee Schedule. Well, I know that’s gonna be of keen interest to all of our listeners, and I’m looking forward to diving into this episode to give you some insights on, how to come up with the right fee schedule for your practice. But before we do a couple of announcements, first announcement, many of you, if you’re a regular listener to the Thriving Dentist Show know, that we periodically put on virtual events. And our next, virtual event, is a Thriving Dentist Virtual Summit, coming up on May 28th.

Gary Takacs: and this event is titled How Dental Practices Can Use AI to Increase Case Acceptance and Production in 2026 and Beyond. the date for that, it’s a three hour virtual event. It’s from, six to 9:00 PM Eastern Time. So go ahead and do the time translation for wherever you’re located, in the time zone. It’ll start at 6:00 PM Eastern, three hours. you’ll get three hours of CE credits. We’ll have some opening keynotes. We’ll have, panels, a panel discussions. we’ll have, experts that will weigh in on just what world’s going on with the, with AI and how it can increase case acceptance and production. I think this is something that you’ll benefit greatly from, no tuition. you attend as, a guest of ours in appreciation for your listenership. you do have to register, so go to thriving dentist.com, forward slash events, and grab your seat. You’ll get three hours of ce. The next announcement is, we have, my, co-host Naren Arulrajah with a thriving dentist marketing tip. And this marketing tip is the importance of Google Business profile and how you can master it. Very important. Very no further ado. Here’s an errand on the importance of Google Business Profile and how to master it.

Naren Arulrajah: Hello, everyone. This is Naren, the founder of Ekwa Marketing and co-host of the Thriving Dentist Podcast. In today’s tip, I wanna talk about the importance of Google Business profile and how you can master it. Working with 400 dental practices across the world, and mostly in the us, what I have realized is Google my business profile is really important. We are noticing, in some cases, 20, 30, 40, 50 new patients coming just from Google Business Profile. But if you wanna do well with Google My Business profile, you want to also do well with rest of Google search. What is that? A CEO as well as AI search. Some of the things, or many of the things that you do for one, will help you with the other. And two of the biggest mistakes I see practices making. One is not having human written content that is original, that meets Google standards.

Naren Arulrajah: So it’s a combination of the content has to be human written, and also, you have to link it correctly with your EEAT bios, E for experience, the other E for expertise, E for authority, and t for trustworthiness. I can do like a half an hour lecture on this. If you want to learn more, definitely ask us about it, and we’ll do a thorough review about how you’re doing with EEAT. The next thing besides EEAT and human written original content is what are you doing with regards to your reviews? Are you getting 10 or more five star paragraph reviews every month if you are not? And the key is paragraph reviews. And a lot of people use automated tools. And the problem with automated tools is they’re not asking people when they are the most excited, which is when they’re in the practice. So they end up with literally no reviews or, just tasks without any words to it.

Naren Arulrajah: And that’s the problem, because those practices that are not having these paragraph reviews don’t rank as much as the ones who have para paragraph reviews. For example, if you help somebody with dental implants, and some of the words in that review talks about dental implants and the C name, that’s a hugely advantageous thing. So Google knows, not only does its algorithm, the original content, all the other things you do on your website and outside your website, but also the specific reviews are talking about that service. So reviews, EAT, original content, those are my big tips. And last but not least, CR UX has become extremely important. Again, it helps with regular CEO AI search, as well as, Google My Business, rankings. Now, what that is all about is, cr UX is Chrome ux, and Google is looking at everything you do across the, in, across your website as a whole.

Naren Arulrajah: So, I know a lot of people used to just focus on one page or specific keywords. Those ideas are dead. Google’s thinking is you have to make your entire website extremely useful to people depending on whether they, whatever they’re looking for, if they’re looking for something specific, your website should give them that and should apply, comply with all of Google’s best practices from mobile usability to, how fast it loads. how easy is it to use, as well as how useful the information is and how the information is organized. So are you paying attention to these things? If you are, great. but if you want to do a thorough review to, just to make sure you’re on the right track, book a marketing strategy meeting. The link for that is ekwa.com/td.

Naren Arulrajah: Welcome back to the Thriving Dentist Podcast. This is Nareen, your co-host. I hope you enjoyed my tip, the importance of Google Business Profile. We see our clients getting almost one third, and in some cases, half their new patients from Google Business Profile today, Google AI search, Google Regular Search, and Google Business Profile, IE Google Maps, they’re all one and the same. If you do well in one, more than likely you’re gonna do well in the other ones. And we have clients who have seen thousands of times, their Google My Business profiles is seen thousands of times every single month. So if your Google Business profile is not optimized, you’re not getting a lot of new patients from it, book a marketing strategy meeting, go to ekwa.com, ekwa.com/td. We would love to review that and provide you, insights on how well you’re doing versus your competition.

Naren Arulrajah: And if you’re doing well, hey, why are you doing well? And so that way you can continue that. Or if you’re not what you need to change, today’s topic is a really important topic. And I still remember our very first conversation, Gary, where you talked about offering the service, this, fee readjustment service to all your clients at no extra cost, almost on an annual basis. And I still remember the ROI conversation we had around it, like, a practice that’s doing, let’s say a million dollars now, adjust their fees. if you’re doing it every year, maybe you are adjusting it three to 5%, but if you haven’t done it in 2, 3, 4, 5 years, you might even adjust it like 10 to 15%, right? So a million dollar practice can now make an extra $150,000. and without lifting a finger, without, having to train your team anything different just by making that decision.

Naren Arulrajah: And this directly goes to your bottom line. And, I know a lot of practices, especially after COVID, have not adjusted their fees, have not, done what they need to make things, fair for 2026. In other words, their costs have gone up 30, 40, 50%, but their fees haven’t. So I’m really looking forward to this conversation. I know you do this as part of, a benefit of being a client. So every single client gets this, experience and benefit, so their fees gets adjusted, so they’re not leaving any money on the table. So, do you feel, Gary, in your work, I know you work with new clients as well as existing clients with new clients who are coming in. Do you feel like in general they are up to date, or you think they’re behind at least a few years?

Gary Takacs: Dentists struggle to set their fees at an appropriate level. Mm-hmm . setting fees is not a one and done process. You don’t just set ’em and forget ’em. I talk to practice owners all the time who’ve not reviewed their fees in, you know, number of years. and in the time period that we’re in right now, a lot of ’em will say, well, I used to raise my fees regularly, but then COVID hit and things were kind of crazy, and I haven’t raised the fees since 2020. Wow. Yeah. At the time we’re recording, this is 2026. Right. So, in the meantime, especially now, lab costs are increasing, supply costs are increasing. We’ve got skyrocketing labor costs. They’ve all gone up. Yes. and so staying on top of the fees is isn’t an option. it’s a basic survival skill.

Gary Takacs: So today we’re gonna, we’re gonna talk about, how dentists can set, an appropriate, fee schedule with a really clear path that makes sense, for them. pricing in business has a lot to do with business success, right? You get the pricing right, and a whole lot of positive things can happen. You get pricing wrong, and you have to bear the consequences of that. so very important conversation. I had some really good foundational training on this back in the very early, stage of my career in the early 1980s. I worked for a large, dental practice management company, and we had a really good science around how to appropriately set your fees. now granted that was, 40 some years ago, but the science holds, and we’ll, we’ll unpack some of that today, but I think this will be a great conversation, and a great, podcast, to listen to. because many doctors just really struggle with it. They don’t, they don’t know what to do with the fees.

Naren Arulrajah: Absolutely. Gary. So as you were speaking, I was just thinking about, why is that, why do so many practices, you know, practice owners don’t raise their fees? I know, like most successful businesses that in my community, I’m thinking of restaurants, salons, all the businesses I go to, for my day-to-day life, they change their fees. at least once a year. like, it’s not a lot, like, let’s say a menu item, let’s say a salad is like $17, nine months later it’s $18, but you don’t notice it. But it keeps going up every year, and it’s just normal. but I don’t see that in my dental practices or my client’s dental practices. Why is that? I’m thinking, is it because dentists are so busy being dentists, they just don’t think about this? It’s just outta sight outta mind.

Gary Takacs: It’s way more fundamental there. It’s fear. They’re afraid.

Naren Arulrajah: Fear. Oh, okay. They’re afraid.

Gary Takacs: They’re afraid. If they raise their fees, they’re gonna lose all their patients. Wow. fear, you could look at the word fear. FEAR as an acronym. Yeah. False evidence appearing real.

Naren Arulrajah: Right? Right.

Gary Takacs: FEAR, false evidence appearing real. Mm-hmm . Dennis are afraid to raise their fes. Now, it’s, it’s kind of absurd because the public doesn’t really have awareness of dental fitness .

Naren Arulrajah: Exactly. Like, just like, I don’t remember whether my salad was $17 or $16. I don’t remember if my cleaning is, whatever, 2 49 or 2 59. I just don’t remember it. You

Gary Takacs: Don’t know. Yeah. I would, I would, maybe counterpoint that a little bit. And there’s one fee that, the public might have some awareness a, around in dentistry, and that would be, you know, the adult hygiene appointment. Mm. because that’s what they receive most regularly. that’s something, if they’re healthy, they have that done every six months. sometimes they need to be seen three or four times a year, but that’s the service they have most regularly. it’s, it’s kind of like, in the car repair business, what people have done most regularly is an oil change. You might have an idea of what an oil change costs, right? but, they don’t know how much does it cost to change a timing belt , you know, no one knows about that. They don’t know. one thing I will say that no matter what your fee is, when you present a fee to a patient, it’s usually sticker shock, no matter, yes, you could say the crown is $200, $200 for a crown, you know?

Gary Takacs: So whatever it is, it’s too much, for many patients. But here’s something that’s even more absurd in this fee discussion, Naren. and that is that, if you’re a PPO practice, you’ve given up the ability to set your fees, right? You keep it up, you turn it over to an insurance company to set your fees. Now, could there be anything more absurd than that? Now, imagine, Erin, that we’ll stick with the restaurant analogy. Imagine that you owned a restaurant, but there was some kind of restaurant board that set your menu prices, . Would you ever agree to that as a restaurant owner?

Naren Arulrajah: if I’m going to serve, let’s say, seafood, which is a lot more expensive than serving fries, right? As an example, right? I can’t charge the same fees. I would charge Gary, selling fries. I have to charge more, right? especially if I want high quality seafood, not just, the thing that they throw out in the garbage, but really high quality, whatever, right? So same thing. So it all depends on the quality, the training of the team that, let’s say if I have a, you know, Michelin star chef preparing it, versus I have a kid who’s 18 year olds, making that seafood course, it’s gonna be different

Gary Takacs: Short order cook, ? Yeah. Yeah. But that’s what dentists do when they, when they sign A-A-P-P-O contract, they agree to let the insurance company set their fees. Yeah. and that is absolutely idiotic. Yeah. it makes no sense. Why in the world would you let an entity set your fees that doesn’t care one bit about the quality of care you provide or your cost structure?

Naren Arulrajah: Even if they do care, why would I lose my independence? Because to me, like fee is who you are. Like, if you have 20 years of experience versus you have two months of experience, like that’s what shows the world. that I have 20 years of experience, what ? and I’m a specialist or whatever that I’m into, right?

Gary Takacs: So, well, there’s all kinds of, psychology around fees. Yeah. And you just hinted on some of ’em, in some cases, I think there, basically there are some good scientific method to set fees. how long does something take, right? What is the cost of the process of delivering this service? if you’re using outside labs, what is the lab cost? If you’re using hardware, like for implants, what is the cost of the ingredients, that go into components that go into delivering the care? That’s sort of the science of a fee setting. Yeah. and then there’s lots of that we can use, we can incorporate into this. but I just wanted to kinda lead off with the absurdity of allowing an assurance company to set your fee. Absolutely. Like, for example, if you’re a provider for X-Y-Z-P-P-O plant, you’ll get that same fee that a freshly minted dentist right outta school would get, for that fee.

Gary Takacs: And maybe you’re a, an experienced dentist has 25 years of experience, and you’ll, you’ll get that same fee. Is that fair? I’m, I’m gonna answer my own question and say, absolutely not, right? But first, the insurance company throws you all in the same bucket. so that’s, that’s, something that I’ll ask our listeners to think about. Does it make sense to participate with plans when, in order to do so, they now set your fees? And I will, state that, this isn’t a decision that you should make lightly, about going out of network. But, if that’s of interest to anyone, would love the opportunity to talk to you about that, because, getting your fees set have a lot to do with your profitability. the reason why overhead is so high today, the a DA says the average solo dentist overhead today, is 74%.

Gary Takacs: 74%, that’s before compensating the dentist. Right? Our goal with our clients, is ideally we want overhead for a solo dentist practice no more than, 60%, ideally at 55%, 55 is a whole lot better than 74. and if that’s of interest to you, schedule a coaching strategy, meeting with me, and we can talk about what it might look like to reduce your insurance dependent so you are in more control of your fees, I just go to thrivingdentist.com/csm be happy to meet with you to talk about that. But to answer your question very bluntly, Erin, why do Dennis avoid raising their fees? It’s because of fear,

Naren Arulrajah: Right? No, I, and I think it’s totally unfounded, and I love that acronym you shared with us, Gary. it’s, it’s, it’s, it’s false evidence appearing real. It’s not real. It’s just totally falls. But for the, in their mind, it seems real.

Gary Takacs: We project,

Naren Arulrajah: Yeah, we project, yeah.

Gary Takacs: And you project, and then you assume that applies to everyone. Yeah. And, I wanna be fair. I’m not suggesting outrageous fee schedules. I’m not suggesting that in the lease, I think we wanna have a fair fee schedule. Dr. Pankey had a great definition of a fair fee, and I’d like to introduce that here. Dr. Pankey said, A fair fee is the one that the patient’s willing to pay and the doctor’s willing to accept without either one, losing gratitude. Yes. That was Dr. Pankey’s definition of a fair fee, what the patient’s willing to pay, and what the doctor’s willing to accept without either one of them losing their gratitude. Now, that’s a, that is an awesome definition. I’m not, I’ve not found a better one. However, it’s a bit abstract , it doesn’t,

Naren Arulrajah: Yeah. like, for dentists who are detail oriented, they’re like, how do I do this? that’s probably what’s coming to their mind. That sounds, not very practical. So let me ask you a follow up question, Gary. I know one of the ways to think about this, even when you go to restaurants, like Google will say a hundred dollars plus, right? Versus 10 to $20 versus 30. So it gives you a range. It doesn’t tell you exactly how much a dish is, but at least you get a feeling that, oh, I’m going to a really good restaurant. That probably is very hard to get into, but it’s worth it because they charge a hundred dollars plus, we assume, higher the price, the better the outcome is, the better the experience is, whether it’s right or not wrong.

Naren Arulrajah: We all have been trained. like, you can buy a shoe for 50 bucks, or you can buy a shoe for three, 500 bucks. You, what ? Or you can buy a handbag for 50 bucks, or you can buy a handbag for 5,000 bucks. So we have this notion of associating quality with pricing. So I guess my question is, maybe one way dentists can get a handle on this is they can take their own area and look, benchmark. So, talk to me about how should an owner dentist benchmark their fees? In other words, look at, in the context of everybody else in my community, every other dentist, where do I stand?

Gary Takacs: Well, there’s so many variables. there’s many variables involved. but, essentially, we should look at what it costs you to deliver the quality of care that you provide. We should know what your baseline costs are. so one of the things we wanna know is, what is your cost of doing business? and that becomes a baseline. I will add that, discussing fees among your colleagues is really, not only delicate, but it’s not encouraged, and it could be illegal. Mm-hmm. Because of price fixing. Right? So it, there isn’t a good way, to do that, among your, now it goes on all the time, quietly, with colleagues. but there’s a lot of doctors that, you know, if you didn’t know a Dr. Wells, hey, let me see your fee schedule, that would be, very inappropriate, right? You do agree?

Naren Arulrajah: I agree, Eddie. Yes. It’s

Gary Takacs: Obscure. it’s obscure. You don’t have the information. and we have to be careful about violating antitrust and price fixing. You have to be very careful about that. That’s, that’s, that’s a line that you do not want to cross, by any way, shape, or form. But really, what is your cost? What do you have invested in your, in your facility? do you have a facility that looks like, linoleum on the floor, folding chairs in the reception room, and really sort of a lackluster appearance? Or have you invested in a facility that provides a comfortable environment for your patients? What’s your cost there? what about your teams? Is your goal to pay team members as little as you possibly need to, or pay as much as you can? Where and where are you in the middle? I’m personally on the ladder side. I wanna be able to pay team members as much as we possibly can so I can attract and keep quality team members. Now, that brings me a different cost structure. when it looks at the, at the materials that you use, you, for those of you that use outside labs, you can send lab work to a third world country, and it’s extremely cheap. Yeah. Do that. But would you put that in your mouth?

Naren Arulrajah: No.

Gary Takacs: And if you would, then I would question your quality. What about your credentials? Are you the doctor that takes the minimum number of CE hours a year to keep your license? Or do you take some multiple of that? You might be a doctor that takes 15 times the amount of CE that’s required. Now, does that mean your fee should be 15 times higher than another dentist? Not this, no. But it all goes into sort of the blender, what’s your cost? and you can actually reverse engineer it. If you wanted to get your overhead to, 60% or less, before paying the doctor you want, if you were a solo dentist, you wanted to get your over to 60% or less, then you could look at where your overhead is. Now, look at the difference and consider over time incorporating fee increases that’ll allow you to lower your overhead, setting fees has more to do with your profitability than anything else. Mm-hmm . If you’re in office, that is 85% PPO, and by the way, I didn’t just pull that number out of the hat here. Why did I use the number 85% PPO?

Naren Arulrajah: That’s very common. We see that in a lot of, mutual clients. Yeah.

Gary Takacs: That’s what we see on average in thriving dentist coaching is practices that are involved with PPOs don’t have a few PO, they’re 85% of the patients are PPO. That means you’re only setting your fees on the 15% that are not PPO patients. Right? So you’re only setting your fees on 15% of your patient fees. You’re letting, you’re, you’re letting the insurance company set your fees on 85% of your fees. Yeah. And it makes sense. Now, I know this is a very sensitive area for Dennis. Should they raise their fees on the 15%? ’cause that’s the only patients they can raise their fees on. Should they raise their fees on the 15% that are, quote, cash or uninsured patients. Doctors are very sensitive to that. because it doesn’t seem fair, it doesn’t seem fair to, it’s, it’s cost shifting. You’re shifting the cost to the 15% that you can set the fee on. Yeah. So would you wanna make up the difference just on that 15% of the fees? No.

Naren Arulrajah: It’s hard, right? Because you, how do you make up the difference on seven, like 15% versus 85 is like seven x, right? How do you make up the money you lose on seven times the number of patients on one patient?

Gary Takacs: So then maybe a strategy would be let’s start reducing insurance participation. You don’t have to go all the way notice. I call it reducing insurance dependence. I don’t call it going fee for service. because every time you successfully resign from a plan, you’ve improved your practice. it’s not my clients. If you wanna be fee for service, then I’ll be your biggest cheerleader, because that’s the way to get the most outta it. Maybe you work on going from 85% of your patient base being PPO to a lesser amount so that you have more control over your fees, so you can set them. But basically the way, the way a practice owner should, benchmark their fees is it should be have some kind of correlation to your cost of doing business.

Naren Arulrajah: Let me ask you this, Carrie. talking about cost of doing business, and talking about, fees. One way I like to think about it is in percentile, right? When you are studying to get into the, let’s say the top school, right? You should be in the top five or 10 percentile, right? When you are, when you are, even in your, even in your exams, right? There are a hundred kids. Are you in the top 5% or are you in the bottom 90%. So similarly, Gary, is percentile a good way to think about fee setting? Just to kind of put things in perspective, like I’m just, you, let’s take Dr. X. Dr. X has 20 years of experience. He’s ama he’s one of the top 5% doctors when it comes to c when it comes to his capabilities. and he has a brand. Everybody knows him, trusts him. Should he be like thinking that way? I’m just trying to understand, how would I simplify this

Gary Takacs: Completely Wrongheaded Naren. Okay. Completely wrongheaded. They have a doctorate. Ev every dentist has a postgraduate doctorate, right? Not what percent of the population has Google it. Erin, what percent of the population has a doctorate? Doctorate? Look it up right now. What percent?

Naren Arulrajah: probably like 3%. I’m thinking

Gary Takacs: I want an answer from Google. What percent Google, okay. Of the US population has a doctorate. What percent US population has a doctorate. It’s gonna be some absurdum

Naren Arulrajah: Low. It’s probably like, let me just find out. I wanna

Gary Takacs: Find out from Google. Yeah.

Naren Arulrajah: It’s, 0.24%.

Gary Takacs: So we’re already by virtue of all dentists are point

Naren Arulrajah: 0.24. Yeah. One in 400.

Gary Takacs: They’re all 0.24, right? Look at where the fees are. The fees are all over the map. So no, it doesn’t make any sense. No Right percentile. They’re already at the top of the class.

Naren Arulrajah: No. My question is, within all the fees, like, do you want to be in the top 10% of fees versus, you’re the lowest?

Gary Takacs: I think it’s not a guideline that makes any sense. Okay. Okay. We have to figure out a different way to do that. Right? I’m, I’m in favor. I’m often asked by my clients how often should I raise fees? Mm-hmm . and it depends. so often when I’m asked questions, the appropriate answer is depends. It depends what has been your history of that, right? . But there is a good data that suggests that an annual fee increase is generally appropriate, okay? Because your costs are going up every year. an annual fee increase, it was somewhere in that range. Makes sense, because again, your costs are going up every year. and I was taught, by Charles Blair, many of our listeners were, remember the named Charles Blair.

Gary Takacs: We engaged Dr. Blair to help us set our fee schedule and lifespans, way back when. And we asked that question, Dr. Blair, how often should we consider raising fees? And he said, well, most of my clients will raise them manual. And he said, you can use inflation as a guideline. If inflation is relatively low, you might wanna raise your fees 3%. If inflation is higher, it might be 5%. to raise fees as a way, as a hedge against inflation. but he also suggests having an initial benchmark. ’cause if you’re way off your fee, if you’re way low and all you’re doing is raising ’em 3%, you’re not gonna ever get where they need to be. So you might need to re-index them once, in the beginning to get where they need to be in your practice. how do most, how do most practice owners come up with their fee schedule? If they bought their practice? They most likely inherited the fee schedule from the previous debt,

Naren Arulrajah: And they never changed it. Like a lot of people,

Gary Takacs: Well, they may have changed it, but that was the baseline.

Naren Arulrajah: Baseline, yeah.

Gary Takacs: Baseline was inherited. And so you might wanna re-index that baseline. that’s why it’s, that’s, it’s a service that we do for all of our clients.

Naren Arulrajah: Yeah, I know you spent a lot of hours, you’d look at a lot of data. You look at all the surrounding practices, in the, in that neighborhood and so forth. So there is a big science to it, right? It’s not just, oh, let me, let me just make it up like it, there’s a lot of science signs,

Gary Takacs: There’s a sign and we wanna be fair. We want, we want it to be a fair fee. Yeah. But it also has to be fair for the doctor.

Naren Arulrajah: Yes. It has to be fair both sides. You don’t want it to be like, oh, not fair for the doctor or not fair for the patient.

Gary Takacs: Right.

Naren Arulrajah: Let me ask you a question again. I know we touched on PPO, but I wanna ask you a question related to PPO. If a practice is a PPO practice, is it, let’s say take the example of 85% of PPO patients, right? Is it still important to have an appropriate fee schedule since insurance is setting your fees for those 85% PPO patients?

Gary Takacs: Absolutely. And here’s why. Okay. This is a little known fact that will come as a surprise, to, I would hazard to guess almost every one of our listeners, if you set your fees below what the maximum allowed fee is by the insurance company, if you set it below that, they cannot raise your fee to the maximum amount that they would pay.

Naren Arulrajah: Oh, right. So for example, right. Let’s say if they’re gonna pay $600, and your fees, only will get you paid 400 because you haven’t set the maximum allowable fee,

Gary Takacs: They will pay you 400.

Naren Arulrajah: 400. Right? Here’s

Gary Takacs: Why they cannot set your fees. Only a dentist can set their fees.

Naren Arulrajah: Right?

Gary Takacs: So if it’s below, you’re leaving money on the table for the insurance company.

Naren Arulrajah: I see. I see.

Gary Takacs: And then they, now this is where percentile comes into play, Naren. Mm-hmm. This is the percentile previously was not relevant, but here it’s Right. The insurance company will set the fees at a certain percentile. And the percentile is based on what the premium that the employers paying. Mm. There are actually pretty good. there are, they’re rare, but there are good PPO fee schedules. There are good fee schedules because the employer is willing to pay more. Mm. So the insurance company has percentiles ranging from 20th to a hundred percentile. And let’s say the contract that the employer bought paid at the 50th percentile. Mm. That’s what I’m just making up an example. Sure. Paid at the 50th, but your fee is at the 20th. It’s gonna stay at the 20th because they can’t raise your fee from the 20th. Got it. Only the de skin. So many, we found this constantly. Many of our clients are leaving money on the table for the fat cats at the insurance company.

Naren Arulrajah: Wow.

Gary Takacs: That’s the last place in the world. We wanna leave money on the table.

Naren Arulrajah: Yeah. Yeah. And why you’re still providing the same service. Why do you want to be in the 28 percentile? Why not be in the eight percentile? You, what ?

Gary Takacs: Where you need to be. Exactly. Now

Naren Arulrajah: Exactly.

Gary Takacs: If you’re above the 50th mm-hmm . They’ll downgrade. They can downgrade your fee to the 50th. So if you’re at the 60th percentile, they’ll downgrade that fee to the 50th. That’s what the contract provides. Right. They can do that, but they can’t. These your so many times, I did an analysis for one of our clients recently. They were, they were leaving, six digits on the table. Wow. That they were, undercharging for, in terms of what the insurance company would pay if they had fees set at the right level.

Naren Arulrajah: So you’re just saying is insurance company sets the ceiling, but you can set the flow. If you don’t adjust your fee, your flow could be really too low and you could be leaving a lot of money on the table. Yeah. That’s awesome, Gary. So your advice is, doesn’t matter whether you’re a PPO practice or not, A PPO practice set your fee and adjusted at least once a year. Correct.

Gary Takacs: And that doesn’t mean it’s gonna get acknowledged by the insurance company, remember that.

Naren Arulrajah: Right. Then you may have to negotiate with them and that’s a totally separate you a ball of wax. Like you’re kind of,

Gary Takacs: But yeah, I think we need to have a good baseline for where we have our fees, how often we’re increasing them. Mm-hmm . Your you’re ever fluid cost of doing business. ’cause it is fluid, it does change Right now, wage inflation is extreme right. And more need than ever to be doing that. Raise my fees.

Naren Arulrajah: Now, lemme ask you this. How do you communicate the fee increase to patients? Or should you even not quote unquote say, Hey, I increased my fees not communicated, and just say, here is my fees.

Gary Takacs: yeah, this is, something that I work on individually with clients. I’m, I’m a very transparent person. I believe in transparency. and yet, there’s not a requirement to announce a fee increase. so,

Naren Arulrajah: Like a restaurant doesn’t announce a fee increase. They didn’t say, oh, you showed up seven months ago. And like, they don’t even know when the last time I showed up. They’re like, here’s our menu of visa here,

Gary Takacs: Here’s where it comes into play. Yeah. If you have, this is how I feel is a good way to handle it. If you have treatment plans where there’s been, a case fee

Naren Arulrajah: Mm-hmm

Gary Takacs: . and you, for a certain period of time you wanna honor that case speed that you’ve presented, that’s where we can talk to the patient and, say something like, Rin we, you know, I know Doctor has suggested that treatment for you. and hey, we’d like to get this taken care of if you have some interest in that. just a heads up, like most practices, we have to raise our fees periodically to reflect our cost of business. however we’re willing to honor that fee, for you over the next three months at that current fee schedule. as a courtesy to you that’s how I would handle any discussion about fee increases to your patients, I would, meaning

Naren Arulrajah: Like you talked to a patient and you said it’s gonna cost you $2,000. Now it’s 2,500. So those cases, because they already expecting 2000, so you can tell them, yeah, as long as you get this done in the next three months

Gary Takacs: Full time, next three months, we will honor that fee as a courtesy to you. Yeah. Yeah. and a after that it won’t be valid, but we’ll honor that within a So

Naren Arulrajah: As long as there’s no conversations like that has taken place and you don’t need to announce it. Right. It is what it is.

Gary Takacs: Yeah. And we certainly aren’t gonna put signage up on the outside. ,

Naren Arulrajah: We increased our fees.

Gary Takacs: Yeah. Yeah. like I said, no other,

Naren Arulrajah: No other business does it. Nobody announces their, a lawyer doesn’t announce their fee increase. Like, this is my only rate. It doesn’t say, oh, I only raised it two minutes ago. Like,

Gary Takacs: , our manufacturers don’t say, Hey, yeah, we raised our

Naren Arulrajah: McDonald’s doesn’t say we did a fee increase, like nobody does. Right. like,

Gary Takacs: Just so really, how do you communicate your fee increases to patients? generally it’s not something that we do with the exception of existing treatment plans, where we can use that as encouragement for them, to move forward with a pred fee. Makes sense. Yeah.

Naren Arulrajah: Lemme bring this a close by asking a question, Gary. And, I know the world is changing, right? AI is coming in and, doing more and more of things that humans can do. But there was a time, and perhaps there still is a time where we have this concept called value pricing, right? In other words, your fee is a function of the benefit people get. Now, does this apply in dentistry? Like for example, I’m just, cosmetic, right? you give somebody a beautiful smile for the next 20 years and this is the person who didn’t even smile because they were ashamed of their smile. So what do you think about value pricing, Gary, as you think about, oh,

Gary Takacs: What value pricing can have a place? Absolutely. for example, if you’re an office that really believes in fluoride, that the scientific evidence says that fluoride can do a great job of protecting, people from, getting carriers, you might wanna value price fluoride. You might wanna do that at cost, so you do more of it. whitening,

Naren Arulrajah: Sorry, help me understand what you mean by value price. You mean like,

Gary Takacs: Make it cheap.

Naren Arulrajah: Make it cheap. Oh, okay. So you’re not, you’re not talking about value price, meaning it’s worth more to me, so charge me more. Okay. Got it. Make it cheap. Make it cheap. Okay.

Gary Takacs: I do like the idea of value pricing whitening.

Naren Arulrajah: Got it.

Gary Takacs: And you’re welcome to disagree with me guys, but I like to value price whitening. so the reason I like to value price whitening, people want white teeth. Let’s give it to ’em and let’s make it affordable because it leads, it’s a gateway service that leads to so many other things. so, for example, you might, choose to, have value priced whitening because you want something, that people want, you want that to be very affordable and have different whitening options. It could be just about, fit any budget. For example, you could have a chairside whitening option, like chairside zoom. You could make custom trays, and people do it at home. Or you could have an over the counter product, like go, like ultra dense go. clients have asked me, what if I was to have those three options, chairside zoom custom trays, where they do it at home or, go, that’s an over the counter product only available in dental office.

Gary Takacs: What would value pricing look like? Here’s what I say. Why not make your, zoom priced at 2 95, 2 95, which includes the custom trays so they can continue to use whitening at home. If you’re gonna do just custom trays without the chair side, make that 1 95. 195. and if you’re gonna offer the box of go, it comes in a box of 10 price that at $80. Now those are ch that’s inexpensive there. Now I’ve got from 2 95 on the high side to $80 on the low side for whitening. I don’t know that fits everyone’s budget, but I think I’m getting most people there. Wouldn’t you think?

Naren Arulrajah: Yes. Yes. Gary, you are.

Gary Takacs: So there’s an, there’s a, an application for value pricing, making it affordable.

Naren Arulrajah: Yes. Yes.

Gary Takacs: I certainly wouldn’t value price, more complex services like rounds or fillings or Right. Smiles or, implants. Yeah. A lot of times the value pricing that you’ll see billboards, in cities that say dental implants in a little tiny fine print that you’d have to get a magnifying glass to read on the billboard from 9 99.

Naren Arulrajah: Yes. Yes.

Gary Takacs: It’s a gimmick. it’s, it’s a gimmick. but, I do like the idea of value pricing, things that you wanna do more of.

Naren Arulrajah: Speaking of making it affordable, another way to make it affordable is to provide financing options, right? Yeah. Especially for your high end services. Like,

Gary Takacs: Make it easy. Yeah. Provide financing options. Because when someone says, Hey, I’d like to have it done, but I can’t afford it. Yeah. Have some options available that work for the patient and work for you. Hmm. I love CareCredit. I love their interest free option. I only suggest going to, 12 months on interest free with CareCredit, because of the discount rate you pay for that. You’re funding that, you are funding that. So do 12 month interest free. I like proceed. P-R-O-C-E-D proceed is a great option. ’cause they’ll go up to 96 months. and that can bring the payment down. so there’s some options there. Well, ne this has been a fun discussion. and I, hopefully we’ve, we’ve provided some information. Give our listeners the things to think about. Hey, if you’d like to talk to me about, fees and what might make sense in your practice, schedule a coaching strategy meeting. if your issue is that you want more new patients schedule a marketing strategy meeting, what’s the url? Lead schedule a marketing strategy meet?

Naren Arulrajah: Yes. The URL is ekwa.com. ekwa.com/td thriving dentist. And for coaching strategy meeting, once again, it’s thrivingdentist.com/csm.

Gary Takacs: Yeah. just to bring this full circle, you know, when you’ve, you’ve set your fees properly and you feel good about where they are, and they’re set based on your costs of doing business, your cost of every different component relative to that, you’re gonna go a long way to getting the profitability where you need to be in your practice. pricing has a lot to do with that. again, if you’d like to talk to me about that, just go to thrivingdentist.com/csm, and we can talk, very specifically to your practice about that. well, Naren, this has been fun. wanna take a minute and thank our listeners. We appreciate each and every one of you. Hope we’ve shared some useful information for you today on this Thriving Dentist Show, and Narron. I look forward to connect with you on the next Thriving Dentist Show.