Many patients are concerned with the high cost of dental care. Unfortunately high costs are a result of the healthcare system that we have in place in the United States today. We undoubtedly have the highest quality dental care in the world, but that also comes with some of the highest dental costs in the world. The good news is that over the course of several year our initial investment in quality dental care is much cheaper than continually reinvesting in cheap, poor-quality dental care.
So how do dentists determine fees? Most people think the fees in dentistry are set like in a retail store: there is a product with a certain cost, a certain markup is applied to that cost, and the fee is set to be cost plus markup. In reality, fee setting in dentistry is a complex process and involves many factors.
The cost to the dentist to perform any given dental procedure is nearly impossible to determine. For example, some one surface fillings may take ten minutes and some may take thirty. Some might require one cartridge of filling material and some might require two. Sometimes a filling procedure might use five gauze pieces and sometimes it might use ten. Determining the true cost would required detailed accounting of every minute and every bit of supplies used.
So instead of directly determining costs, dentist estimate costs by examining the total average costs over a long time period (months) compared to the procedures done over that time period.
Fees are generally set using a regional fee report. Dentists look at average fees for other dentists in the area and decide if they want to have fees that are average, above average, or below average. Over time the dentist often refines the fees based on the average cost analysis that I mentioned earlier.
If you have insurance (PPO type), maximum fees are actually set by your insurance. These maximum fees are quite low; so most of the time the dentist charges the maximum fee. Therefore with PPO insurance, fees charged will vary none or only a very slight amount from one in-network dentist to the next.
So why are some procedures much more expensive than others. There are two reasons: The first is perceived level of service, and the second is time involved in completing the procedure.
Perceived level of service can best be explained by an analogy. A steakhouse might charge $25 for a sirloin steak and $40 for a filet mingon, but if you buy the steaks at the butcher the filet only costs $5 more. Both steaks take about the same amount of time to prepare and serve. The $15 difference in price is much more than the difference in cost plus markup. So why is the filet so much more. The answer is because it is seen as being the best.
In dentistry, certain procedures have high fees because they are perceived as being the best. For example, dental implants and dental implant restorations tend to be very expensive. This is because they are the highest level of service for persons with missing teeth. Costs are high for dental implant treatments, but at typical fees they are also the most profitable procedures.
The final reasons some treatments are expensive is practitioner time. Some procedures are tedious and time consuming. These procedures, like root canals, veneers and bonding, require the practitioner to dedicate a lot of time to one patient. A premium is added to the fee to pay for the practitioner to devote so much time to one person, which takes away from the ability to see several other patients.
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