Why market prices are not enough
Looking at what other clinics charge is a sensible starting point. But their rent, staffing, equipment and utilisation are not yours. Two practices can charge the same price for the same treatment – and one makes a profit while the other quietly subsidises it.
Full-cost pricing answers a simple question: what does one treatment cost your practice once every cost is fairly allocated? Only then can you decide whether a market price works for you, needs a premium – or whether the treatment belongs in a package rather than on its own.
The four cost blocks
- Room and overheads per hour. All fixed costs that are not doctor time – staff, rent, utilities, software, insurance, marketing, accounting – divided by the hours your treatment rooms can actually be booked in a year.
- Doctor time per hour. What an hour of the treating doctor must earn: for an employed doctor, salary plus employer costs; for the owner, a realistic salary for comparable work.
- Materials. Everything used up per treatment: products, consumables, disposables, lab costs.
- Equipment per use. Purchase price, servicing and financing of the device, spread over the number of treatments you realistically perform during its life.
The common mistake: dividing fixed costs by all opening hours instead of the hours that are actually booked. That makes every treatment look cheaper than it is.
Sample calculation: a 45-minute laser treatment
A practice with two treatment rooms has €360,000 in fixed costs a year (excluding doctor salaries). Each room can be booked for 1,500 hours a year, so 3,000 hours in total. The doctor hour is valued at €100. The treatment takes 45 minutes of room time and 30 minutes of doctor time.
SAMPLE CALCULATION
Sample calculation with assumed values, not client data.
All figures in euros. The logic works in any currency.
At today’s price of €190, the treatment earns €20 – a margin of just over 10 percent. Now look at what happens when utilisation falls:
| Booked hours per room | Room cost per hour | Full cost | Result at €190 |
|---|---|---|---|
| 1,500 (fully booked) | €120 | €170 | +€20 |
| 1,200 (80%) | €150 | €192.50 | −€2.50 |
| 900 (60%) | €200 | €230 | −€40 |
The treatment has not changed – only the calendar has. That is why price decisions and utilisation always belong together.
From full cost to price
- Set a target margin. A common approach: price = full cost ÷ (1 − target margin). With a 25 percent margin, €170 becomes about €227.
- Check against the market. If your price is well above comparable clinics, look at your cost blocks first: utilisation, room time per treatment, materials.
- Use packages deliberately. A treatment that does not cover its full cost on its own can still make sense in a package – if the package as a whole does.
- Review regularly. Once a year as a minimum, and whenever rent, wages, product prices or utilisation change noticeably.
This page explains the business and financial context. It is not a substitute for tax, legal or medical-regulatory advice in your country.