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If your practice gives patients pricing information, you’ll be one of the few offering that information-which will separate you from the competition.
Editor's Note: Welcome to Medical Economics' blog section which features contributions from members of the medical community. These blogs are an opportunity for bloggers to engage with readers about a topic that is top of mind, whether it is practice management, experiences with patients, the industry, medicine in general, or healthcare reform. The opinions expressed here are that of the authors and not Medical Economics.
John DiJulius, the customer service guru, once said that price is irrelevant. His point was that if you offer a great product or service, the consumer will no longer care about the cost of said product or service. This is perfectly demonstrated when it comes to my distaste for coffee.
When price is irrelevant
I find coffee very bitter and luckily, I don't need the caffeine to get started in the morning. That all changed when my wife brought me a cappuccino with almond milk from Wrecking Ball coffee in San Francisco. The mouthfeel, the taste...it was amazing. And at $7.50 a cup, price became irrelevant. Even more amazing, price became irrelevant for a product I don't typically like.
The concept of price irrelevancy "works" when you're talking about coffee. Why? Because even if I don't know the cost of a really expensive cup of coffee, I still have a pretty good idea that coffee probably costs $2 at a diner or $5 at Starbucks. So, I know that even the greatest cup of coffee in the world won't be $50 or $500. And to my point, even the greatest cup of coffee in the world, Wrecking Ball Coffee in my honest opinion, was only $7.50.
When price isn't irrelevant
The “irrelevancy concept” holds true when the consumer has a baseline for comparison. But what if you're talking about healthcare, an industry where you have no baseline for comparison? This is why you never hear anyone say, "that hospital provides the best customer service so I'm getting my MRI there. I don't care if it costs $500 or $5000!" The reason you've never heard that is because it’s never been uttered.
Price isn't irrelevant if you don't have a baseline for comparison (as in healthcare).But this provides us with an opportunity.
Price transparency is a huge, untapped customer service opportunity. Patients are looking for actionable pricing information, but most providers shroud their pricing in secrecy (and U.S. averages and crowdsourced data points are not actionable). So if you or your practice could give patients pricing information, you would quickly realize two things: 1) you’ll be one of the few offering that information and 2) that level of customer service would separate you from the competition.
Everyone should be taking advantage of this opportunity, but few are. Providing great customer service through price transparency can be an effective strategy. However, don’t just list prices as a static menu.
Healthcare providers should only offer pricing if they can get the interested patient’s contact information in the process by using a price estimator like here and here. This way, the provider generates a lead for follow up, which allows the provider to further assist the potential patient in navigating their way through the healthcare gauntlet.
And to be clear, these leads generated through a price estimator on the provider’s website are high quality and often lead to patients booking a procedure. Based on this peer-reviewed study, 17.8 percent of inquiries submitted through a price estimator ultimately came in for a consultation. Of those, 62.2 percent booked a procedure. Compared to patients who did not know the prices, those patients who were price-aware at the time of consultation were 41 percent more likely to book a procedure.
Other benefits of price transCAREncy
In the process of capturing patient contact information, the provider will generate a huge email database for future email marketing and remarketing. With their own email database, providers will be less dependent on Facebook, Google Adwords, or other costly forms of digital advertising to generate leads and reach your target audience.
They will also reduce dependence on other doctors for referrals. More patients are shopping around for physicians rather than relying on referrals. Providing price transparency will set a practice apart from competitors and attract more new patients.
To be clear, using Price TransCAREncy (price transparency + lead generation) as a customer service opportunity applies to all providers that offer outpatient services, including those that may be paid out of pocket because a deductible hasn’t been met or because it’s considered cosmetic and insurance does not cover it.
Usually customer service improvements come in small incremental changes to the consumer experience. However, in this case, offering price transparency would be a disruptive, industry-shifting improvement to the customer service experience. And the provider that embraces this strategy now will decimate the competition.
Dr. Jonathan Kaplan is a board-certified plastic surgeon based in San Francisco, CA and founder/CEO of BuildMyBod Health, an online marketplace for healthcare services that allows consumers to determine cost on out-of-pocket procedures, purchase non-surgical services, and in exchange, the healthcare providers receive consumer contact info - a lead, for follow up.