In December 2016, the Alberta Government announced that it was working with the Alberta Dental Association and College (ADA&C) on a fee guide. The purpose of this initiative was to reduce the fees in Alberta, Reportedly, the fees in Alberta are higher by 30% than the other provinces in the country. The media such as the CBC reported complaints by members of the public about the high fees in the province. CBC also reported complaints by the insurance companies as well. According to a Blue Cross survey, a typical annual checkup for an adult costs $357.43 in Alberta. The same visit costs on average $164.90 in B.C. and $192 in Saskatchewan.Most provinces have a fee guide in place.
A guide is a list of procedure and fees that are available to the public. However, a guide is not mandatory. In other words, it’s up to the dentists to adjust their fees accordingly. Alberta had a fee guide in the past until 1997, when the competition bureau deemed it was creating price fixing as all dentists were charging the fee guide rates.
After months of negotiations, the ADA&C presented a fee guide to the minister of health Sarah Hoffman in August 2017. The minister of health rejected the fee guide saying the price drop was in adequate and both parties are back at the negotiation table.
Most dentists are disgruntled with the minister’s approach. They believe that it disregards the fact that the cost of running a practice in Alberta is much higher than elsewhere in Canada. For example, staff are paid 50% more in Alberta than in Ontario. A more specific example would be an assistant average hourly rate is about $26 in Alberta versus $19 in Ontario according to data from pay scale.com.
In my opinion, the ADA&C will have no choice but to present a fee guide that offers at least a 15% reduction in fees for the minister and the public to accept it. Just like in the past, most practices fees will hover around the fee guide. This will drive down revenues and profit margins for most practices particularly those with higher than average fees.
Some dentists argue that they might be able to drive down the expenses to maintain the profit margins. I think that this is just not true. Overhead expensed are dictated by economic forces that are not controlled by dentists. For instance, there is only a couple of supply companies and limited training programs for staff. Besides there has been a substantial increase in competition due to the equivalency examination program that started in 2011.
Others are told by their sales reps that their loyal patients won’t leave them to see some one else across the street who offers lower fees. The reality though that they are not aware of is that the insurance companies will drop their payouts in accordance with the fee guide. This means a much higher copayment by the client. For example, say a dentist charges $110 for a complete exam. The client’s insurance Alberta Blue Cross fee is $100 for a complete exam and with 100% coverage, the patient pays $10 out of pocket. Let’s assume that according to the final fee guide, the fee for a complete exam is only $90. Alberta Blue Cross will update their fees and decrease their complete exam fee to $85. Now, if the dentist keeps their fees the same, that new patient will cough up $25 out of pocket instead of just $10. $15 is not little money in today’s economy and it adds up.
In the end, the fee guide and the liberal tax reforms are only the latest troubles for dentists in the province, adding insult to injury from the provincial recession and increased competition due to the skyrocketing number of new dentists entering the market. For more information on the new equivalency process, please refer to my blog titled: Oversupply of Dentists in Canada.