Strategies to help off set inflation in your practice
We are going through one of the worse economic times in recent history. Interest rates are going up, and business expenses and supply costs are rising because of inflation. Staffing is also down as a result
of the bad economic situation. Consequently, these struggles can bring down an otherwise thriving practice.
Whether you’re a young OD who has just started their career or one with experience and established practice, don’t be afraid to raise your fee. The cash inflow will help you overcome these challenges and make your practice sustainable. You will eventually have to raise your fee for your
Why ODs Should Raise Their Fees
Every year, businesses face higher costs than the previous ones. These increases in costs are due to several factors. However, inflation remains the main one. For optometry entrepreneurs, their practices
experience an increase in the cost of materials, supplies, labor, equipment, service contracts, insurance,
If your optometry practice has patients with insurance plans, you will most likely experience lower reimbursements over time, which is not good for cash inflow. Hence, your expenses are going up, and your income might also be reduced. Raising your fees to overcome your practice’s rising costs and decreasing revenue is normal, and you shouldn’t be afraid to do so.
Don’t Be Afraid to Raise Fees
Many optometrist are concerned that they will lose patients if they increase their fees. If you are concerned your patients will leave you if you raise your fee, you should consider that most of your patients are unaware of your current rates.
Even recurring patients only know the rates of your most common services. You should consider raising the fees for these common
services more slowly.
However, you should raise the fees for the remaining services to meet the higher costs.
Do It Right
While raising your fees is important, you should do it on time and with careful consideration. An annual fee increase is perhaps the best way to approach this. It allows you to overcome inflation while
gradually increasing your practice’s profits over time.
Consider raising the fees of your uncommon services by at least the amount of the consumer product index (CPI). Changes in the measured CPI are a great way to assess inflation and the increasing costs of
doing business, allowing you to adjust your fees accurately and efficiently.
You should also conduct an annual fee analysis by assessing the overall profit margin of your practice. Analyzing your fees will prevent your practice from incurring losses and going under.
Don’t Let Fear or Inflation Get You
We often see relatively new practices that have not changed or raised their service fees for years. It can be for various reasons, like the fear of losing patients or not considering insurance reimbursement levels.
However, you shouldn’t let these reasons dictate your fees. Your regular patients will understand the changes because they know that inflation is a key factor in the cost of everything. Moreover, they won’t
leave you because you adjust your prices annually.
If you do it right, your patients will not go anywhere. In turn, your business will thrive because its revenue will overcome issues that eat into your margins, like inflation and insurance reimbursements.
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