Calculating physician fees requires market knowledge and flexibility

Physicians just starting out may not be certain of how to calculate fees for their medical services. While it is tempting to charge large fees in order to resolve debts and build a savings quickly, new physicians probably will not attract enough patients to sustain a clinic if their rates are too high. Conversely, setting your fees too low puts your clinic at risk of not covering expenses and going into further debt.

“I was the first subspecialist in my community and pegged my fees at 150 percent of what the internists were charging,” says Sanjay Kalra, MD, DM, consultant and head of the Bharti Research Institute of Diabetes and Endocrinology at Bharti Hospital. “Given another chance, I would begin at a higher rate.”

Key Point: Calculating your fees requires a careful consideration of your personal financial goals, competitors’ rates, and your patients’ resources.

When calculating fees for your clinic, consider the following recommendations from experienced physicians:

  • Study what other clinics or private hospitals are charging in your area for comparable services and base your fees accordingly.
  • Do not overcharge, but setting fees too low may affect patients’ perception of your quality.
  • Patient feedback regarding fees can be helpful, but do not let it compromise your clinic’s financial health.
  • Reassess fees every year or two, then adjust for inflation and changes in the market.

“A 10 to 20 percent increase once in two years is not a huge increase when you look at the starting point and inflation in India, which is 6 to 8 percent per year.”
—Thomas Alexander, MD, DM, FACC, FICC, FCSI, interventional cardiologist and head of the Division of Cardiology at Kovai Medical Center and Hospital in Coimbatore and a member of mdCurrent-India’s Editorial Advisory Board.

Study the market

What other clinics and private hospitals are charging is not protected information or difficult to discover, says Thomas Alexander, MD, DM, FACC, FICC, FCSI, an interventional cardiologist and head of the Division of Cardiology at Kovai Medical Center and Hospital in Coimbatore.

Every couple of years, the hospital revises its charges—including...

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