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Justifying Your Hourly Rate in Medicine

Some physicians are comfortable setting their hourly rate and don’t look back at it. Some of you have difficulty justifying your hourly rate unless you see others doing the same.

In a healthy economy, prices evolve naturally based on the flow of goods and demand. When something is in high demand, prices go up, attracting more service providers or creators, and stabilizing prices.

I have set my healthcare consulting prices at $300 per 1/2 hour after a lot of fine-tuning. I was perpetually afraid of taking it up past $150 per hour.

Healthcare is a manipulated marketplace. It’s heavily regulated and also subsidized. The regulators who should have the health consumer’s best interest in mind are often paid off or promised higher-paid positions in their careers.

My Virtual Telemedicine Practice

My Digital Nomad Health practice is a virtual telemedicine practice that I have been building up slowly. I am charging $150 per hour to iron out kinks in the practice.

The goal is to get to $200 per half-hour and $600 for 1-hour visits.

I am happy to work 40 hours per week, but it can’t be purely patient-care in medicine. I need time to read about the business side of medicine, read clinical articles, and learn how to help patients overcome their personal hurdles.

Setting your hourly rate at $600 must have built into it the cost of everything necessary to offer patients the health value they deserve.

As my partner, she knows how many hours I spend reading about different diets and alternative views on oncology and cardiovascular health. I spend $5k at a time on Functional Nutrition courses and Physical Rehab courses.

How Much Would You Pay for Care?

Forget health insurance for a minute because the lack of transparency due to health insurance laws is why we have so many problems with our healthcare system. Imagine you have to pay cash.

Put yourself in a patient’s shoes if you haven’t been there yet. You tore your ACL and had some meniscus damage as well.

You can get around but can’t do any sports immediately after the injury. Should you get a surgical repair or manage it entirely through physical therapy?

In the health insurance model, it’s obvious that you’d want to pay the least possible. That’s why people purchase health insurance and shop for lower prices.

You really care about your knee and don’t want to undergo unnecessary anesthesia, surgery, pain medications, antibiotics, or risk potential surgery complications.

You can pay your copay and get a surgeon’s opinion who will tell you to do surgery because they profit from that management plan. And because that’s how they have been taught how to manage an acute ACL tear with meniscal involvement.

Or, you can pay $500 per hour to a surgeon who will spend 30-45 minutes with you and give you all the possible options. All the upsides and downsides are based on the most up-to-date literature.

How Do Physicians Stand Out Currently in The Marketplace?

Setting your hourly rate isn’t an option in our mainstream healthcare system because it’s a manipulated system. There is an insurance company between the physician and the patient.

You can only stand out by offering really good customer service to the client. Your patient outcomes are only tracked for billing and lawsuit purposes.

You don’t own the patient or the patient data in your current practice model. Your hourly rate is justified because the insurance company – who owns the patients – tells you so.

But I want to stand out based on the value I offer my patients. Another way to say it, I want to stand out based on my clinical skills and how much healthier the patient will be overall with my care versus that of another physician.

Justifying Your Hourly Rate In Your Practice

If you are offering insurance-level care, you should charge and be reimbursed at that rate. That should be the current going rate — approximately $150 an hour for most primary care physicians. And perhaps $400 for the specialists.

The first obstacle is that you don’t think you’re good enough. The next is that nobody will pay that rate. You might also believe that maybe only a few people will pay it but not enough for you to make a living.

You might even believe it’s unethical. What about the poor people, after all? You didn’t go into medicine for the money, for dog’s sake!

Wow. Where to start? Here we go.

1. You’re Not a Good Enough Doctor to Charge That Much

You’re a physician who reads medical books and journal articles and knows about integrative, alternative, and functional approaches to health.

You use yourself as a way to experiment on diet, lifestyle, willpower, and intervention recommendations.

You are already standards of deviations above the average physician. You are educating yourself to improve the health of your patients.

You are a skeptic when it comes to mainstream treatments. You strongly believe that western medicine is amazing when used on the right patient in the right setting at the right time.

I’m here to tell you that you are good enough.

And even if you haven’t started this journey to learn more independently, now you know this knowledge is out there. So many great physicians have already written and talked their faces off on such topics.

The real question is whether you believe that your knowledge can be translated into a better management algorithm that will result in better patient outcomes.

I would say yes.

2. $500 per Hour as a Family Medicine Doctor is Absurd

Naturopaths, chiropractors, MDs, DOs, and dieticians charge $2,000-3,000 for a 1-2 hour initial consult. Followed by $800 or more per hour for follow-up.

You might have a hard time justifying your hourly rate to yourself, but others before you have not only justified it, but they wouldn’t dream of giving their work away for anything less than $500 per hour.

People will precisely pay this rate because they know that the average doctor will have a far easier time making $150 per hour in the insurance model.

You, the kind of physician you are, have acquired further knowledge, bucked the trend, read extensively on alternative clinical topics, and put them into practice. You are of more value whether you believe it or not.

3. Nobody Will Pay That Much for a Visit

Most people can tell the difference between the value and cost of something. The value is what they will get out of the product, the cost is the numerical representation of the service.

Sure, people might prefer to shop at the 99-Cent store. But rest assured, many still have $1,200 to pay for an iPhone and $35,000 for an SUV.

Cheap people will look at the price tag of something and generally, these individuals will be at the very bottom of the economic ladder.

Frugal individuals don’t care much about the price tag as long as they are getting value for their dollars. These individuals crowd the very top of the economic ladder.

You don’t want to get a cheap person to use your services because they will rarely be pleased with the outcome. But you do want to have the frugal person use your service and you should demonstrate to them why they are getting more value for their money.

4. You Won’t Get Enough Traction Charging High Cash Pay Rates

A cash pay telemedicine practice that is marketed to the average consumer who wants to treat yet another UTI won’t attract a patient willing to pay $500 per consult.

But there is a church of patients who don’t want to take more antibiotics and are frustrated with their recurrent UTIs. They are looking for real guidance and a real solution. They will pay well north of $500 if they believe they will get good care.

We have 250 million American adults actively using the healthcare system. More than 50% are unhappy and frustrated. Of these, maybe 5% is willing to or can afford to pay substantial rates for healthcare.

That’s a lot of potential customers. More than enough to go around for the 1% of physicians like you and me who are exiting the health insurance game and marketing directly to patients.

And this doesn’t factor in the millions of other patients living abroad with perfect English language skills and lots of disposable income at their disposal.

5. Charging This Much is Unethical and You Didn’t Go Into Medicine for the Money

I can’t argue ethics with anyone because it’s a personal topic. But if you have a set price point for your ethical standards, I’d want to know what that is. $140 an hour? $120? $161?

Nobody is saying that you can’t see patients for free. You can take on as many sliding scale patients and free patients as you like.

But if you can’t offer your care on a large enough scale to build a practice, then your practice will never take off. And if you have a beef with the current model, the only way to compete with it is to build a more sustainable practice.

I know several idealistic clinicians who confused their ethics with the sustainability of their businesses. They went under in a couple of years.

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