Wrong Pricing: What’s Sabotaging Your Clinic’s Profit?
- Admin
- Mar 25
- 4 min read
Discover the Most Common Pricing Mistakes and How to Fix Them to Ensure Profitability
If your clinic has a good volume of appointments but the profits don't reflect the effort and workload, your service pricing may be wrong. Charging inadequate prices can be one of the biggest obstacles to profitability in medical and dental clinics, whether due to undervaluation of procedures or hidden costs that weren’t properly accounted for.
But how can you set the right price for your services? How can you balance competitiveness with profitability? In this article, we’ll uncover the most common pricing mistakes and provide a step-by-step guide to calculating prices correctly, ensuring that your clinic remains financially sustainable without losing patients due to market-incompatible rates.
1. How Wrong Pricing Impacts Your Clinic
If your clinic’s service prices are not calculated correctly, losses can occur in various ways, such as:
Low profit margins → If operating costs aren’t factored in, services may be priced too low to cover expenses.
Loss of patients → If prices are too high without justification, the clinic may drive potential patients away.
Staff burnout → Poor pricing may lead to an excessive volume of appointments to compensate for the lack of profit, overloading dentists and doctors.
Delinquency and low conversion rates → If the clinic doesn’t offer payment options that match patient profiles, many may abandon treatment before completion.
Example:Imagine a dental clinic charges $240 for a root canal treatment. However, when calculating the costs, it finds that materials, staff, and fixed expenses consume $200 of the charged value. With such a low margin, any unforeseen expense could lead to a loss, showing that pricing needs to be adjusted.
2. Most Common Pricing Mistakes
2.1. Copying Competitors’ Prices
One of the most common mistakes is simply copying the prices of other clinics without analyzing your own costs. Each business has a different structure, so what works for a competitor may not be viable for you.
Solution:
Analyze your own fixed and variable costs before setting prices.
Compare market prices only as a reference, not as a rule.
📌 2.2. Failing to Include All Costs
Many clinic managers calculate prices based only on direct costs, such as materials and labor, but forget to account for fixed expenses like rent, marketing, taxes, and equipment maintenance.
Solution:
Include all operating costs in pricing, including hidden costs like credit card fees, utilities, and software licenses.
2.3. Setting Prices Based on "What Feels Right"
Pricing shouldn’t be based solely on personal perception or what seems like a reasonable value. Without structured calculation, prices may end up too low to cover costs and generate profit.
Solution:
Use strategic and mathematical methods to set prices, ensuring a balance between cost, margin, and perceived value.
2.4. Lack of Flexible Payment Options
Many clinics miss out on sales opportunities because they don’t make payment easier for patients. Not everyone can pay for a treatment upfront, and the lack of options may push them away.
Solution:
Offer strategic installment plans to increase conversion rates for higher-cost treatments.
Work with digital payment options and healthcare credit platforms.
3. How to Set the Right Prices
Now that you know the main mistakes, here's an efficient method for correctly pricing your clinic’s services.
3.1. Basic Pricing Formula
The simplest way to define prices considers costs, desired profit margin, and perceived value.
Formula:📊 Service Price = (Total Cost + Profit Margin) ÷ Number of Appointments
Total Cost: Includes all direct and indirect expenses.
Profit Margin: The percentage you want to earn on the service.
Number of Appointments: Monthly estimate to spread fixed costs.
Example:If a dental whitening service has a total cost of $60 and the clinic wants a 100% profit margin, the final price will be:
📊 (60 + 100%) = $120
However, if competitors are charging between $160 and $200, there may be room to increase the price — as long as the clinic offers differentiating factors like more personalized service.
3.2. Considering Perceived Value
Patients don’t always choose the cheapest service. Often, they pay more for quality, comfort, and credibility. Therefore, in addition to calculating costs, it’s essential to increase the perceived value of the service.
How to Add Value:
Provide differentiating factors, such as a modern environment and personalized care.
Use sales arguments, highlighting the benefits of the treatment.
Use patient testimonials to build trust.
Example:A clinic that charges slightly more for a dental implant can justify the higher price by showing that it uses high-quality materials, provides a comfortable environment, and offers personalized post-treatment care.
4. Monitoring and Adjusting Prices
Pricing isn’t static — values should be adjusted as the clinic grows, costs change, and the market evolves.
How to Monitor and Adjust Prices:
Review costs and revenue monthly to ensure profit margins are met.
Keep an eye on the competition, but don’t blindly follow their prices.
Collect patient feedback to understand if the price aligns with the value delivered.
Conclusion
If your clinic provides good service but profit isn’t growing, the problem may lie in pricing. Adjusting prices doesn’t simply mean increasing them — it means creating an efficient method that considers costs, market conditions, and perceived value.
With a solid pricing process, your clinic can increase profitability without losing patients, ensuring sustainable and financially healthy growth.