Trends | National | Pricing | Concierge Medicine | Direct Primary Care
Be Advised, “Set the Right Price for Your Healthcare Service.” Don’t go too high or too low, or patients won’t buy what you’re offering.
MAY 1, 2015 – Free Market healthcare delivery is alive and well today across America. On one side of the free market umbrella is Membership Medicine models and on the other, Convenient Care Clinics — making this modern-day revolution in healthcare, approximately 12k strong combined. Not only is it [free marketing healthcare options] spreading in consumer awareness, causing more employers to rethink their healthcare benefit package options, it’s also putting more people into the drivers seat and causing them to analyze what options are available to them for healthcare in their local neighborhoods.
As we objectively observe the national marketplace, we see that there is a definite rising trend in consumer cost-shopping going on in healthcare. And now that more and more free market delivery model variations are on the rise, very soon, and particularly among the Millennial patient-base — more people are going to start “clinic-hopping.” Meaning, that these people (typically age 18-45) are shopping around and jumping around from one clinic to the next with no brand or relational loyalty — strictly making what they believe is a good buying decision based on price.
The problem we’re hearing, particularly from suburban and rural offices is that low monthly direct-pay clinics (typically priced under $80-$90/mo.) have already reported that this “clinic-hopping” is happening. When prices become too low, people are inherently going to shop around for services (i.e. soon to be their next doctor) like we shop for groceries. While wide-spread popularity of this trend is at a starting point, it’s important to note that when setting your prices you must make sure that the price and sales levels you set will allow your practice to be profitable. You must also take note of where your service stands when compared with your competition.
“It’s a lot easier to overprice your services and offer discounts to your clients–that way, the patients perceive that they are getting a deal, and you are still getting a market rate for your services–than it is to under-price your services in the hopes of increasing them later once the patients are established on your way of doing things,” notes one business advisor at The DocPreneur Institute based in Atlanta, GA.
Which Demographic Is Starting to “Clinic Hop?”
First, realize that the problem isn’t you … it’s our surroundings. While there are certainly many healthcare offices that need to do a better job conveying “value” and delivering great service to their patients, we need to understand what’s happening around us.
First, the 55-plus isn’t “clinic hopping” and most likely never will. The reason being that the advertising aimed at them is simply aimed at maintaining brand loyalty and establishing that the products/services they love are still good and still work and maybe are being improved. But you will not see advertising aimed at those people that’s designed to get them to switch brands.
Conversely, the advertising aimed at the 18-45 market is all about switching brands and cost-comparing. We merely need to look at the grocery store advertising and the price of chicken from one store to the next each week. By nature, this demographic has not established a “brand loyalty” … yet. They will, but it will take years for it to mature. Today, any show that’s targeting the 25-54 demographic, you will learn what those people think is cool, hip, and where our culture is.
And, by the way, not every advertising agency or business-savvy consultant knows this. That’s why some agencies are better than others.
Last, if you are still not convinced that this is a rising trend … ask the Concierge Doctor you see next about his/her chronic pain patients and how frequently they visit various clinics.