There are few things that chiropractors sweat more than raising their fees. Despite your biggest fears, it is a necessary element to running a profitable practice. Here are some good ways to go about this (and a few to avoid):
1. Don’t raise all your fees the same amounts across the board – for better for for worse, it’s likely you set your fee schedule at random. Therefore, some of your fees may be right on target, while others may be either too high or too low. So raising all your fees may set off the alarm bells to your patients. Furthermore, patients are more sensitive to some fees than others. For example, adjustments are something that you charge for (hopefully) every visit. So patients tend to notice when that price goes up. On the other extreme, a new patient exam occurs exactly once (or to be more accurate in terms of coding, an established patient that hasn’t come in for at least three years is considered a new patient again). Either way, patients are a lot less likely to notice a fee raise for exams and other items that occur infrequently.
2. Don’t raise your fees more than 25% at one time.
For example, if you bill an adjustment currently at $48 for 98941, don’t let your new fee exceed $62. If you are that low in comparison to the fees for your region, you are better off raising fees a little bit, and then again, a bit more 6-9 months later. (If you have no idea what fees should be for your area, see #7.)
3. Announce your fee increases by posting a sign in the waiting room and/or at your billing desk. Raising fees without letting patients know is setting your staff up for a difficult time collecting. The sign need not be complex, nor does it need to encompass all of your fees. However, it should make patients aware of fees that directly affect their co-pay or cash price.
4. Be prepared to explain any fee increases, but don’t apologize.
Keep your explanations simple and don’t negotiate. Using statements such as “It’s been 5 years since we raised our fees” is enough. People understand that you are a business and need to make a profit. If your patients object or try to bargain you into accepting the old fee, don’t give in. If you do, that will signal your fee increase is not essential, but optional and can be misconstrued as greed. Finally, don’t feel guilty or apologize for your fee increase. Every industry and profession has cost of living increases. Grocery prices increase, but no one stops buying. Your fee increases will never reach the same proportion as gas stations, so you have no need to be defensive.
5. Mark up products at 2x wholesale value, but don’t gauge your patients. I have seen offices that sell supplements for 4x wholesale value or pillows for 6x the wholesale price. Remember, your primary income should be from providing chiropractic services, not vitamins, pillows, or pain relief creams. Patients expect some markup, but really they can get those products most anywhere. What is unique is your adjustment.
6. Don’t set your fees based on what the insurance will pay.
This is a potential disaster for several reasons. First, you are letting the insurance dictate your fees; you have lost control of your own practice. Second, you will settle for less than you are worth – every time. Finally, if all DC’s set fees this way, the insurance companies would continually lower fees until they pay virtually nothing and DC’s drop their plan. Good news is you’ll be one of the few DC’s taking insurance; bad news is the fee will be so low you will understand why all the other DC’s left.
7. Set your fees for profit FIRST, then based on regional averages. This could be the most important item in this article. I have consulted with too many clients who set their fees with absolutely no rhyme, reason or research. First, make sure your fees will enable you to operate profitably based on your overhead, expenses, patient base and individual level of expertise. Once you know what fees allow you to operate at a profit, then use a generally accepted, defensible, consistent method of “fee balancing” for your geographic area. With a “balanced” fee schedule, you can defend your bills. DC’s whose fees were set by random guess or by calling a few offices in their town have no rationale to provide payers for accepting their charges. Worse yet, their fees may not even allow them to make a profit!
8. Don’t Let Your Neighbors Dictate Your Fees — sadly, price wars among chiropractors are common. They spread quickly and are difficult to stop. After all, if you are charging $40 for a visit and the DC down the street starts charging $38, you’re going to lose out right? WRONG! You will only lose the price war game IF you choose to compete. And fair warning, if you compete, you will likely lose either way — the other guy will outbargain you or your prices will be at a point that you can’t make a profit. Instead of competing on price which is pure nonsense, you should be differentiating yourself from the rest of the pack. That way, IF a patient happens to compare you (and by the way, research shows that only 8% of patients choose doctors based on price), then you simply distinguish yourself from the other DC by stating that your expertise, training, protocols, etc are very different than theirs. Argument over. Sure, chiropractors seem similar “on the surface” but if you’re going to go with surface level comparisons, then I guess airplanes and automobiles are similar too. After all, they both get you from point A to point B. But even your dullest patient understands it’s generally going to cost a lot more to purchase a plane than a car. You should be able to position yourself and your practice so that it is unique enough to be immune to price wars.
9. Raise Fees Regularly — Perhaps the biggest mistake chiropractors make in raising their fees is that they just don’t do it often enough. And by the time they do, their fees are so far off the mark, they feel both compelled to raise them significantly and anxious about doing just that. The simple solution is raise your fees routinely. Each year is ideal.
10. Just do it! Having advised, cajoled and maybe even coerced chiropractic coaching clients over the years into raising their fees, one thing never ceases to amaze me. As a rule, chiropractors overanalyze and anticipate way more trouble regarding their fee raises than the reality of the situation. In fact, I can even predict with a high degree of accuracy what will happen WHEN you raise your fees as the response almost always falls into the following four groups:
a) The biggest percentage of your patients won’t say anything. They love you and they know you’re worth it. (this is typically the response from 50% or more of your patients)
b) A significant won’t notice or don’t care. They are focused on getting better and they either acknowledge that increasing fees are a fact of life and/or that your small increase isn’t going to effect them much. (This is usually another 20-30% of patients)
c) A small portion of patients will be mildly uncomfortable with your fee raise. Most won’t complain. A few will. But none in this group are irritated enough to actually leave your practice over the matter (This is usually 5-10%)
d) Another small portion of your patients will actually respond POSITIVELY to your fee raise and either congratulate you or give some sort of smirking acknowledgement that your fees were pretty low, but of course they would never complain about that (this is usually 5% or so of patients; if it’s more, your fees were WAY to low or it’s been WAY too long since you raise them).
e) A very small minority of patients will verbally complain about your fees, whine and act like it’s going to be a great inconvenience. They will huff and puff and make your life miserable BUT…they will stick around anyway. You know these patients. They are the same ones who probably complain that you don’t serve enough donuts along with your complimentary coffee, they whine when you are late (but miss their appointments routinely) and they are the most likely patients to monopolize your time with a litany of complaints. You could use this as your opportunity to invite them to try the chiropractor down the street OR you can just learn to love them anyway and be thankful that they are (begrudgingly) helping you pay your bills.
f) Finally, yes a few patients may leave. Interestingly enough, they rarely make a big stink on their way out (unless they owe you money already). Mostly, they silently disappear looking for a better “bargain” elsewhere. Likely, it has less do to with the money than the fact that they just didn’t connect with you, that their expectations weren’t being met in other ways or that you’re just not the super-power you think you are and (occasionally, very occasionally) you don’t get everyone well in the timeframe they are willing to tolerate. If you re-read this paragraph, you’ll discover most of the reasons these patients are leaving aren’t because of money.
In short, you are worth every penny you charge and more. Raise your fees to a respectable level SOON so you don’t needlessly suffer the consequences! (And you can thank me later when virtually no one complains or leaves)