You can buy a cup of coffee at 7-Eleven for $1.50 or you can buy a $4.00 cup at Timeless Coffee. One therapist charges $75/hr and another $400. As consumers we know there is a different in value but it isn’t always easy to explain it.
Take a Kia sports car and compare it to a Lamborghini. Few people would have a hard time distinguishing value and quality in that category.
However, healthcare has been bastardized. It’s been tainted by scrupulous middlepeople. Few can explain what good quality healthcare is.
Demonstrating value to patients is the only way to charge a fair price for providing clinical services. As a previous commenter said on this site, getting paid $23/patient on Teladoc isn’t a long-term winning strategy.
I need to figure out how to demonstrate value to patients so that I can charge a fair price for my services. Otherwise, I’ll be forever stuck in a model where I’ll be only judged by my medical license standing, instead of the clinical value I provide to patients.
Value vs Price
I’m obsessed with the topic of value vs price. And so I’ve talked about it from every angle possible. As in, being frugal means focusing on the value of things. While being cheap means obsessing over the price.
Price is so damn effective because it’s such a 1-dimensional way of communicating information. It’s a linear concept – the item being purchased is either expensive, cheap, or just right.
And price is numerically stated. We all learn some math, so it’s not too difficult to make sense of a price tag.
Value is multidimensional. There are so many damn things to consider, it’ll make your head spin.
A backpack for a newly minted high school graduated costing $500 would be considered absurd by many. You’d even be labeled as an elite rich person if you dare spend that kind of money on a bunch of leather and cloth.
But to assess the value of the bag one needs to consider the impact of the gift on the person receiving it, the sustainability factors considered when it was produced, its durability, and the buyer’s financial situation.
A physician household which earns $300k a year with a networth of $500k has no problem buying a boat for $25k, which the entire family can enjoy seasonally. Few would find anything wrong with that.
The billionaire who earns $150m a year and who buys a $18m yacht, however, that person is just wasteful. Most would agree.
Except that the billionaire spent far less of their net worth on that boat. And they employed a lot more people with the building of that boat. They created far more jobs than the factory stamped $25k boat.
I’m not arguing for one or the other. I don’t even own a car. I care more about resolving these two polar extremes in my bald head.
Demonstrating Value to Patients
All this talk about price and value is to perhaps convince myself that people can recognize and are willing to pay for value.
One person is fine taking their car to the gas station’s mechanic shop. Another won’t anyone but the specialized dealer turn a bolt on their car.
I, Dr. Mo, don’t have a Lexus logo stamped on my forehead. Nor do I have Dr. Gawande’s reputation. I’m just another Family Doc among 300,000 other Family Medicine doctors.
#1. Recognizing my Strengths
Each of you medical professionals has their own strengths. Some of you are only good at one thing – say, surgery. Others possess the whole spectrum of skills needed to deliver value to patients.
My strengths are that I’m good at communication. I’m also good at triaging a patient and recognizing when something requires further workup and when something needs the prescription of time.
I’m also fast. I would maybe even say that I’m efficient. Which can, unfortunately, sometimes give the impression of not being thorough enough.
#2. Highlighting the Added Value
A massive 100 ft yacht sort of speaks for itself. The Sennheiser logo on a gadget screams quality.
I don’t have any of that. I need to make extra effort to signal to my potential clients that I am offering exceptional value.
This is what branding accomplishes. I know, it’s a bit cheesy. But that’s all you have in the beginning. I need to let my clients know exactly why they are getting a higher value. Why they should pay more for my services.
#3. Proving the Added Value
The problem with Ikea furniture is that it looks the part of nice furniture. But it doesn’t play the part. It’s a use-it and toss-it quality. Nobody continues buying Ikea after college.
To prove value to clients – once I’ve got the client into the door – I need to offer the kind of service which traditional models don’t deliver.
When you put on Sennheiser headphones you hear the quality instantly. There is no mistaking it. For those who have hearing problems, think of the sleek appearance of an exotic car.
Clinical care has been dragged through the mud by medical education systems, hospital systems, lawyers, and politicians. In fact, it’s hard to recognize good care even for clinicians.
I figure I need to demonstrate my knowledge, be attentive, and empower the patient. I need to communicate like a lawyer and be as loving as a caretaker. I need to set very firm boundaries and offer heavy doses of hope.
#4. Finding the Value Seekers
So where are these wealthy value seekers to be found? We have to market to the right audience in order to find the right clients.
Just because someone is wealthy, it doesn’t mean that they can recognize value in healthcare delivery. ***********
Such individuals definitely exist, we’ve already proven that. Yet they may not be easily swayed by sexy advertising. They want to do their research. So, your website and your content better be airtight.
Which means, my Medical Health Coach brand might be too superficial. That I’m sharing a lot of knowledge but not really explaining why the information I offer is of value. And exactly how it stands out. How it will confer better health.
#5. Setting the Price
This is maybe the hardest part. We know, for sure, that the price of my office visit should be far, far higher than what the insurance company pays.
Let’s start with double. So, a Primary Care visit, performed by Dr. Mo, should cost at least $300. (A 99213 might fetch ya around $150).
But I can’t compare myself to only the insurance service. I have to also look at how much I’m saving the patient. So that if my thrice annual visits are extending the patient’s life by 5 years, preventing $200,000 in healthcare spending, while decreasing their suffering, I should maybe be charging $1,500/visit.
Still, this is paltry compared to what the clients gets to save. I need to consider how many clients I can find who recognize this kind of value. Not always easy.
As they say, your price should be as high as the market will bear. No more, no less. More is greedy, less is confusing.
What Would You Pay?
I ask myself, what would I pay for very good healthcare service? I payed $100/hr for my psychotherapist in medical school. I think I got exactly what I paid for – an average service which filled up the 60 minutes we had together.
What would you pay for the best hip surgeon in the world if you knew that you were going to be active on that artificial joint for the next 25 years? Or would you just take whichever surgeon you were assigned?
How well would you research your aesthetic dermatologist? Your pediatric psychiatrist? Your realtor?
If you are someone who places little emphasis on value then you may not be the right person to connect with the right clients.
Or, maybe, you don’t care much for paying more for value but can recognize it. That’s good. It means that you can probably play around in this field.