Definition of average /ˈav(ə)rij/, noun

  • a number expressing the central or typical value in a set of data, in particular the mode, median, or (most commonly) the mean, which is calculated by dividing the sum of the values in the set by their number.

Why do you have a range of fees and a fee sheet that is four pages long single spaced? Why do you charge more for some cases than others? Before you start, I’m not talking about the outliers – don’t make policy based on outliers EVER! I’m talking about everything from a class I crowded case to impacted canines to surgery cases to Class II div 2 to phase I with an expander/functional/whatever and on and on. The stuff we see every single day. Before you answer, think about it. How much money will you collect if you have a range of fees vs. charging the average of your fees on every case? How much simpler would it be to market what you do if you had transparent, all inclusive pricing and financing? How much more attractive would your offering be? Would doing this differentiate your practice? Would you need to pay TC salaries, pay for the square footage of TC rooms or spend the hour plus per new patient that the TC driven practice model demands if you had one price?

Further, do you know what your actual fee really is? I’m talking about what you are paid (money that hits the bank) per contract in your office. It’s simple to find out – you think your fee is 5500 dollars but I’m betting if you divide the dollar amount you DEPOSITED in the bank in 2018 by the number of signed contracts in 2018 it will be much, much less than you’d like. By the time you give discounts to close a case (i.e. undercut your neighbor), insurance companies cut your price to be a provider and you give out all those family discounts, it’s surprising how low your collections per patient actually is. Sure there are some variables – like if you’re growing rapidly then your collection lags behind your production and the numbers will seem lower – but how many of you are growing rapidly (like doubling year over year) and if you are growing that fast then you should keep doing what you’re doing! Usually at this point orthodontists try to defend their low average collections per case number by saying “there are retainer only patients and phase I patients and that throws it off”. Of course this is why I say orthodontists don’t understand the word AVERAGE. If you’re making these arguments please scroll up and reread the definition.

AVERAGE IS AVERAGE!!!

Now, if you can handle and really consider this pricing model, the next step is to make your price attractive to more than just the top 10 percent of the population…

Related Reading:

Offering A Family Discount Is Dumb

Modulate Service to Fit Price

A New Face in Orthodontics: Meet Smiley Face

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