Editor: The Debate Over Price As More Important [to Patients] Than Relationship In Subscription Healthcare Models
Disclaimer. FOR EDUCATIONAL PURPOSES ONLY. No intended as Legal, Accounting or other Professional Advice as your individual situation may vary. The contents of this website, article, podcasts, etc., are intended to convey general educational and business information only and not to provide legal, financial or consultant advice or opinions. Please consult with your local legal expert, attorney and/or consultant or accountant concerning your individual situation and inquire with them about your state-specific laws and regulations.
Audio Version of This Story | The DocPreneur Leadership Podcast | April/May 2022
Episode 435. Price Shaming Has No Place In Peer-to-Peer Interactions
By Concierge Medicine Today, Editor-in-Chief, | The DPC Journal, Editor-in-Chief
Pricing a subscription-based program or Membership in a medical practice is often the most terrifying question facing Physicians entering this space.
However, more often than not, your fear gets a voice, not a vote. And, the skepticism you thought would separate you from your Patients is usually met with uncommon grace and even acceptance by your Patients and your local community.
So, what should you charge your patients?
A simple question, but for the new DocPreneur it’s often complicated and intimidating.
As a Patient and observer of this space now for over a decade and having interviewed countless Physicians about this topic, I’m often reminding Doctors that ‘If Concierge Medicine is about super-servanthood, you have nothing to apologize for …’
More often than you might realize, the fear of pricing a subscription-based program or membership today for Doctors is typically met with very little resistance from Patients. However, when there is a emotion or tension or resistance to these subscription-based healthcare delivery model innovations it is usually by a few of your peers, not Patients.
There is a reason why 8/10 Patients want a closer relationship in this membership economy with their Doctor. Patients crave and desire more time with their Physician. And, there’s a reason why 8/10 Physicians resist memberships in healthcare as a viable option for a sustainable career in medicine. On the Physician side of the coin, the professional medical community continues to bristle and resist such a desire to bring the Patient-Physician closer together and would much rather focuses on topics at medical conferences and blogs such as: touting the worsening Physician shortage; complaining about the ever-increasing bureaucracy; Nurse and PA jobs filling in coverage gaps; rural shortages, hospital bills, and the list goes on.
In 2014, a colleague of ours and writer/contributor, S.H., a Healthcare Business Innovator, Outcomes Advocate wrote a story entitled “Price Shaming”. She noted in the article the following … If you are a pet owner, you may have seen images on Facebook that show pictures of animals that have behaved in a way that causes their owner’s to shame them. Often times, the shame includes a piece of poster board with a brief description of the “crime” placed around the animal’s neck. The signs generally declare that the pet has chewed a hole in their owner’s sweater or eaten their owner’s favorite shoes or sometimes relieved themselves in the house. I own two dogs, who we have affectionately renamed the “Bumpuses” from A Christmas Story, so I find humor in these images. But lately, I have found myself referencing these “shaming” images when I participate in conversations that discuss the differences between Direct Primary Care (DPC) and Concierge Medicine.
Here’s a Q&A exercise that may help us establish the differences:
Q: Which model allows physicians to restore the doctor/ patient relationship?
A: DPC & Concierge Medicine
Q:Which model allows patients to communicate with their physician via telephone, email and text?
A: DPC & Concierge Medicine
Q:Which model asks patients to commit to their practice for a monthly fee?
A: DPC & Concierge Medicine
Q: Which model charges fees up to $100 a month for services?
A: DPC & Concierge Medicine (exceptions in both models)
Now for three of the major differences between the models:
The Role of Insurance: The perception that all concierge medical practices accept insurance is not accurate. In fact, there is a dynamic practice in the San Francisco Bay Area that fits this example and there are others. I don’t know of a concierge medicine practice in the country who enjoys the headaches of dealing with the third party payor system, but they do so as a convenience to their members. If you see the revenue collected vs. the cost to collect scenarios you may be surprised.
The Preventive Services: Both models offer services that can be deemed preventive. However, advanced labs and technology found their way into the Concierge Medicine model more than five years ago. These advances answered the questions for physicians who were interested in measuring improved patient outcomes and a value proposition that was more than 24/7 access.
The Price: It appears that the DPC model ranges in price from $5 – $99 a month, annual discounts are offered, I will apologize in advance if there are practices that charge more. Concierge Medical practices range in price from $50 – $300 a month, annual discounts are offered. There are practices that charge as much as $25,000 a year and there may be practices that charge even more, but they are the exception not the rule.
So where does the line exist between charging too much vs. not charging enough? Shouldn’t the line be drawn between how many practices stay open to deliver this this type of care and those that don’t? If we “zoom out” from this discussion and think about the long-term value of these models, the conversation needs to be broadened. Both models will benefit from continuous transparency, but think about the benefit to consumers if DPC & Concierge Medicine broaden the conversation to include measured disease regression.
As she clarifies for us (above), pricing is often subjective. And, it’s okay to be a Physician and make a living too. Why is it that in medical school that the sentiment of ‘Do No Harm’ is also accompanied by ‘So if you make no money, so be it … you’re job is serving the common good.’
Now, I’m not a Physician, but I am a Patient. So, I know what it is like to sit on the other side of you.
“What if Doctors could *scale* kindness? I think you can and it only costs $0.55 cents!” | Editor
It’s tough on this side of the exam room too.
What I wouldn’t give to have more time with my Doctor.
Why wouldn’t I pay more for their expertise and their time?
We often echo this phrase to Physicians … “Five words from my Doctor, mean more than 50 words about my Doctor.”
You see your prominent place in our community, albeit our lives, has inherent value.
Your position, your leadership and your words have power.
Not every Doctor can be a Concierge Doctor. Not every Doctor should be a DPC Doctor. But I believe that every Doctor can and should … do for one what they wish they could do for everyone.
And therein is your value proposition.
Please understand that it can take quite a bit of time to figure out your own individual “pricing conundrum” – but after countless discussions with physicians, hours of examination and a little investigation, here are two key things to consider.
Instead of Upselling: Offer Choices – Many membership medicine doctors are now incorporating a vast number of added-value services for patients to aid in enhancing patient satisfaction and retention.
Services have included: Heart burn and gastrointestinal disorders; B12 injections; Vitamin deficiencies; Hormone balancing therapies; Mole checks; Testosterone injections; Medically supervised fat loss programs and a diverse collection of other wellness-focused and anti-aging solutions.
“I give a lot of B12 injections and testosterone injections for those who need it,” says a Concierge Medicine Physician in Greenwich, CT. “I also do a lot of in-office procedures like mole checks and removal, trigger point injections … and then there is my Botox/fillers appointments too.”
“I’ve been working on adding new services as well,” adds another membership medicine Physician in Georgia. “One of the first things I did when I opened the office was to negotiate a very inexpensive fee schedule from a lab who would bill me for the tests. Most docs mark up the tests and make a profit off of it, but I do very little mark-up of the tests, instead offering things like a CBC for $4.50 and a TSH for $8.00. I am now working on doing the same thing with an x-ray facility, giving them the opportunity to get guaranteed cash up-front [reducing their overhead] while avoiding the many traps of compliance with Medicare billing [which forbids providers from giving discounts to other patients that they don’t give to Medicare patients].”
Some retainer-based and subscription-based medical delivery practices are built around visible, low priced services aimed to bring people up to their service window and generate higher unit sales. These communities and geographies generally attract a younger Patient population whereas the geriatric and senior aged patient population has more chronic conditions and desires more face time with their Physician.
Others medical offices we find also offer more personal services and sprinkle in some relational ingredients into their overall business plan which are aimed at meeting an experiential and relational need. Consequently, these memberships may add additional genetic testing, cancer and blood tests and are priced accordingly at a price that keeps patients coming back for more.
Editor: How to Write A Thank You Note To A Patient
Conversely, it is also important to remember that ‘Five words from a Doctor mean more than 50 words about a Doctor.’ So remember that you have value. Don’t race the retail clinics of your community in a pricing race to the bottom. Patients value your expertise. But, if you haven’t been available to them in this way for the past several years, they are going to need some time and TLC to trust you again.
Finally, keep your stable of services on pace with their needs.
Consider Raising Your Fee To Be Taken More Seriously – The problem with frequently lowering your prices and/or offering a low price, low cost membership or subscription is that your medical practice (eg. your medical opinion and expertise) may wind up in the eyes of your Patients as budget friendly advice that they can get elsewhere quicker and easier without a subscription.
Interviews with countless Physicians and industry sources over the years indicate that the average patient or consumer of concierge medicine and direct primary care (DPC) services can withstand a small annual premium increase of about $5 to $160 per year.
However, the problem with raising prices among concierge medicine and cash-only/direct-pay patients, especially in small medical offices and rural patient populated communities is that it causes patients to reassess how much they value the relationship and how much then use the care throughout the year. You and I both now that Patients today have a plethora of options to choose how they receive healthcare treatments and services in their local community.
Price and transparency used to be the most powerful marketing message in membership medicine, particularly to those in DPC. But today, Patients have price transparency in a lot of ways. Is it everywhere or is it perfectly clear? Of course not. But we don’t have a relationship with our Doctor either, so what are we to do?
For example, retail clinics during the pandemic cemented their place in our healthcare ecosystem as a viable alternative to receive healthcare. Whether you like it or not, they are not going away anytime soon.
“Instead of viewing the status quo PCP model as the center of the universe. Maybe we should take some plays from the Retail Clinic playbook before we become obsolete,” said one DPC Physician and CMT/DPC Journal Contributor/Writer from Georgia recently.
A New York Concierge Medicine Physician we spoke to also noted “We [Concierge Doctors] have to be prepared to be several steps ahead of the market.”
So be cognisant and aware that current patients are always keeping their eyes and ears open to new, easier and simpler ways to receive healthcare. If you’re relationship and experience isn’t good, your membership and patient retention will suffer. That’s just how life works. That’s how business works. They are always considering their monthly or quarterly familial cost commitments along with current health insurance premiums, grading past experiences with your office, your staff and even the traffic patterns.
“We must not be distracted from the four supreme objectives of any organization that wants to succeed: 1.Keep the customer. 2.Get new customers. 3.Encourage the customers to spend as much as possible!—but without sabotaging Objective Number One. 4.In all of the above, keep working toward more and more efficiency.” ― Horst Schulze, Excellence Wins: A No-Nonsense Guide to Becoming the Best in a World of Compromise
Today the most powerful marketing message for any Doctor in Concierge Medicine, Frictionless Primary Care, Direct Primary Care (DPC) or even telehealth primary care subscriptions is relationship and experience.
Don’t believe us? Ask your neighbor about the last time they went to see their Doctor. Listen to their story. My guess is it wasn’t good. At the root cause of their story was probably a litany or complaints and at the center was their malcontent for the Patient-Physician relationship.
So in summary, if you’re practice lives, breathes and relies on new patient referrals to grow membership, understand that relationship is more important than price.
“Happy Doctors Are Not Malfunctioning Physicians”
How do I know this?
Because I’m not a Physician, but I am a Patient so I know what it’s like to sit on the other side of you!
Remember, you are not selling a widget that can be easily bench-marked. You are selling your training, your expertise and your time. This has inherent value that isn’t easily quantified but is we lose great Physicians every week to the idea of fear, burnout and price shaming shouldn’t be on that list. If it continues to be, we will soon live and practice in a future reality that continues to devalue and degrade Physicians.
Where is the hope in that? Where is the future FOR DOCTORS in that?
In closing, it takes a lot of courage to enter into Concierge Medicine, start a subscription-based healthcare delivery practice such as those other models seen in telehealth subscription programs and even DPC.
These are all career lifelines FOR DOCTORS and healthcare delivery models that should be taken seriously by all Physicians. Price shaming and brand identity shaming between peers towards other Doctors needs to end. It is time for Doctors who mischaracterize this model to lean-in and learn not cross your arms and criticize.
After all, these models are already being taken seriously by Patients.
How do I know this?
Because I’m not a Physician, but I am a Patient so I know what it’s like to sit on the other side of you! And my challenge to every Doctor is the following … “It is no longer about being the best Doctor in the world anymore, it is about being the best Doctor FOR the world, FOR your Patients and FOR your local community.”
Who are you truly FOR?