How To Price Virtual Office Visits For My Practice
A little less than 2 months ago, I decided to start my own virtual practice and have been doing some marketing for it ever since. My goal for 2017 is to build my ideal practice model. I’m not really trying to make the most money possible out of this venture but instead, strike a balance between doing what I enjoy and creating a semi-passive income stream.
I had a very interesting interaction yesterday with a patient and thought I’d share it here because it is very relevant to setting virtual consultation prices moving forward.
Getting Paid In Healthcare
Most of us who have worked in private offices and to some extent in larger medical groups, know what a shitfest the whole billing process is. Most doctors don’t understand billing in healthcare which is the impetus for the swing towards cash practices.
Each insurance company reimburses the physician differently based on how the billing was done, what the patient’s insurance plan was and what the medical interaction was like.
A physician with their own private office knows that they have absolutely no fucking clue what their reimbursement will be for a patient who they saw for a routine physical with an exam, labs ordered and possibly some medication adjustments for a chronic condition.
Even worse, there is no way to rely on that reimbursement amount in the future because the insurance company can change it or the next patient will have a slightly different health insurance plan.
Income from health insurance billing is often delayed which makes it much less likely for a clinician to be able to fine-tune their billing practices. And let’s not even get into government models such as Medicare and Medicaid.
The advantage to an insurance model is that most patients access healthcare through this model. In a way, the insurance company is doing the marketing for the doctor by listing them as a potential clinician on their roster of doctors.
Combating this insurance model. I know of 2 doctors who have incredibly successful medical offices and they primarily work with insured patients. One is located in San Francisco and the other in San Diego.
They combat the ever-changing reimbursement by hiring PA’s and NP’s and churning an insane number of patients through their practice.
The advantage to not accepting insurance is that a clinician will know exactly how much they will take in per patient.
Based on the expected income, the office can manage their overhead so that they secure a specific net profit. Either they will stop offering an expensive test or they will add certain procedures with good profit margins.
Unlike the insurance model, the cash model requires the physician to know exactly what to set the price at. Based on this seemingly simple decision, a whole lot of factors are affected.
This post is about this dilemma exactly, what should I set my price at for my virtual visits to have a healthy profit and attract the right kind of patients.
My recent patient interaction
I got an appointment request from a patient who wanted to address the fever and ear pain of their 11-year-old child. The appointment was at 7:30 pm so I had plenty of time to get home and set up my environment to carry out a professional “office” visit.
Come 7:30 pm, I get a notification that the patient is online, we connect via video and start chatting. Mom, who I interacted with mostly, was the front passenger in the moving car and dad was driving. The patient and his sister were in the backseat.
How cool, I thought, they are getting to their destination and putting their time, stuck in traffic, to good use.
It went incredibly smoothly, mom was agreeable that since junior’s fevers had resolved and his pain was decreasing, it would be best to hold off on antibiotics and try some home remedies, instead.
They forgot to hang up
The Health Tap software I use to conduct my virtual visits requires that the patient “end” the visit and not the doctor, apparently to give the patient more control.
Well, junior’s mom forgot to press that red little button and as soon as they thought I had hung up this is what I heard:
Mom: “That was sooooo weird. That was the weirdest interaction, ever!”
Dad: “Well, he just made an easy $40, must be nice! He didn’t do anything, really.”
Alright, my first thought was “Shit, what did I do wrong, did I come across weird? Was I picking my nose again during a visit??”
I wasn’t pissed, just butthurt because I had put some genuine effort into making sure that they felt comfortable with my decision and the visit, overall. Especially, anticipating that a virtual visit for an ear pain/fever in a child often ends with a request for antibiotics which I don’t give out lightly.
I called my partner to run it by her and she gave me some good insight. We both chuckled at the blatantly honest feedback I just received, even if unsolicited.
My Current pricing model
This family chose the $40 consult for 15 minutes. If you recall from my previous post, I get charged $11 per patient interaction by Health Tap in order to provide me the ongoing support and malpractice insurance.
The Inbox Consult is a text-based interaction between the patient and me, they can upload pictures or screenshots of their labs/tests for me to review and I can still prescribe the patient a medication if needed.
Adjusting My Prices
I had set my prices low because I wanted to mainly attract the kind of patients who either are unable to afford traditional health care, don’t have insurance or have no easy access to a physician’s office.
The problem is that I am unable to target those groups specifically, and as is the case often, those who are simply looking for a good deal or can’t be bothered to go to a doctor’s office will take advantage of the lower prices.
After that insanely honest feedback from the parents, I realized that I needed to raise my prices. It’s not just the profit margin I need to be worried about but also the kind of patient population that I am going to attract. This wasn’t clear to me before.
I am not sure if this is a reaction to being butthurt or if my subsequent pricing changes make business sense.
3 Consultation Models
Inbox model. I will keep my Inbox Consults low, that way I can still feel good about myself that I am providing a low-cost option.
These aren’t appointed visits, allowing me flexibility with my daily schedule. The patient pays the fee, sends me the message and fills out the relevant clinical information and then we interact over text. I make my clinical decision and end the consult. These are very gratifying.
Video model. I have bumped my 15-minute consult to $100 and my 30-minute to $150. I should mention that patients can use their insurance for my services, I have a billing department that handles that.
These are appointed visits, patients choose the time based on the availabilities which I can set in the software.
Subscription model. I haven’t figured this out yet, I’m not quite sure which patient population would be best served by this, if you guys have any feedback, feel free to post it in the comments.
It’s basically a monthly fee the patient pays for unlimited access to me. They can schedule as many video appointments with me as needed.
Changing my practice model
I have essentially changed my entire practice model. I went from wanting to provide access to those in need, to targeting the affluent.
A part of me feels like I sold out, the other part is happy to not sell myself for cheap.
My marketing strategy is going to change. I had written up this whole plan of where I wanted to do my advertising and the kind of online presence I was wanted to create.
Marketing to the more affluent is always more costly but offers a far better return on investment. Let’s see what I can come up with, moving forward.