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Make Sure You Don’t Undercharge: A Simple Formula To Set Your Dental Procedures Cost

Simple Formula To Set Your Dental Procedures Cost - Infographic

Determining the cost to charge patients for dental procedures can be a challenging process because there is so much variance from state to state and from office to office. Luckily, there are certain ways that you can calculate your actual dental costs and then set your prices in a manner that is fair to customers while still netting you a profit. The procedure to calculate these dental costs is below.

Determine the Per-Procedure Cost

The first step to figuring out your dental procedures cost is to calculate the total for how your office has to pay for each procedure. This is more than just a matter of figuring out items like dental tools and waste disposal. It needs to also include the expected time of each procedure and how many members of your staff need to be engaged in order for that procedure. You should come up with a per-person hourly rate and apply that when determining the cost of labor. This will give you a rough estimate as to how much your time and the time of each of your employees, up to and including receptionists and administrative staff, really amounts to.

Determine the Cost of Doing Business

Once you have your per-procedure cost set, you need to consider the cost of doing business on a daily basis. How much does leasing your office space cost? What is the cost of the electric bill? What about office and waiting room supplies? These can sometimes be considered hidden costs because they don’t pertain directly to a specific procedure, but they are essential for the office to function at all. While doing this, you should also look into ways to reduce your costs. For example, you can eliminate the charge on credit checks and financing by using SimplePay, which gives your patients an easy way to finance their treatment without requiring you to pay any of the costs to set up a line of credit.

Decide on Your Profit Margin

Businesses, even ones that provide essential medical treatment, operate in order to turn a profit. Your dental office needs to function in the same manner if you expect to remain in business for long. When you have worked out an hourly rate per procedure and figured out what each hour of operation costs you in your office, you have a baseline price for a given procedure. This is the amount that, if you were to charge it, would pay for the essentials of the procedure and nothing else. From there, you can determine how much of a profit you should add to that total. This number is largely set by the competition in your area, but should also take into account the frequency with which your office performs a procedure and the overall level of expertise you have to offer.

The formula to set up a good cost schedule for dental procedures comes down to your tools + staff + cost of doing business + desired level of profit. This can change based on your area of operation and the competition around you, but it serves as a good baseline to begin from.