Finding the best pricing model
Good Medicine on the go Ep. #4 Finding the Best Pricing Model for your Practice gave practical tips and strategies for creating a long-term, viable business model. Dr. Morris reviewed 4 Functional Medicine pricing options: Insurance, Membership-Hybrid, Cash, Direct Primary Care Model, plus how to begin practicing Functional Medicine if you are a practitioner in a contracted position
One of the episode’s key takeaways to create that long-term viable business model is by implementing the “crawl/walk/run” theory. Start by crawling with very low overhead and a reasonable fee per hour (offer coupons to the industry-standard hourly rates). This gives patients an easier entry to your practice and to Functional Medicine. As you build your reputation and your word-of-mouth referrals, you are beginning to walk. Once you have a waitlist and are running, it’s time to increase your prices to the premium, hourly fee.
Functional medicine’s time is now
Fortunately, more patients are awakening to the fact that by following the trail of insurance-covered services in the traditional, chronic disease model, they are being led further down the rabbit hole of illness. Patients are seeking Functional Medicine to heal the underlying causes, rather than pursuing more Band-Aids. As more patients begin to choose to invest in Functional Medicine services, we as an industry need to be more proactive to mitigate patient’s overwhelm and thus, improve patient retention.
We’ve found it is common for a patient to come to an initial appointment and then never come back. That tells us the investment they were asked to make was too much too soon. Patients often walk away feeling there is no way they can implement the recommended lifestyle/medical interventions into their schedule or continue to afford ongoing care. Now add this volatile period of a global pandemic, riots, unemployment, and economic downturn to their feeling of overwhelm.
How can we make Functional Medicine more affordable and accessible when people need our industry the most?
I decided to introduce Functional Finances as a component of a comprehensive, functional care plan.
Even prior to the global pandemic and unprecedented rates of unemployment, finances are a major source of stress for patients and, thus, inflammation. Although uncomfortable, I believed the financial discussion must be a part of a therapeutic plan. With this important concept/realization in mind, I decided to introduce Functional Finances as a component of a comprehensive, functional care plan.
As an industry, we must do a better job of preparing patients for the process and partnership.
This can be accomplished by playing offense in preparing your patient to assume their role and voice as an equal partner, plus including the Functional Finances discussion. Underscore this by providing a practical and useful tool to help them organize, document, budget, and plan their care strategy. This will contribute significantly to creating a long-term viable business model because you are creating a partnership that makes the Functional Medicine process successful. This process can be seen in the following.
As Nathan Morris’s health coach in his clinical practice Good Medicine, I was responsible for onboarding patients to the functional medicine process and partnership. I drove the patient’s first encounter, so patients knew and accepted their role as an equal partner in this mutual-participatory medical model. As an equal partner, the patients accepted that 80% of a care plan is how well they can implement the modifiable lifestyle factors and the remaining 20% are the well-timed medical interventions. In my coaching sessions, patients created and organized their lifestyle plan and then prepared to share this with Dr. Morris in his new-patient encounter. As a result, Dr. Morris could hear the patient’s readiness with lifestyle changes and better tailor his recommendations to be reasonable next steps.
“The money conversation is so uncomfortable for both sides. It’s like talking about sex with someone. People stumble through sexual relationships without even asking their partner what they like, and I think it’s the same thing with money.”There are so many emotional buttons. The idea of actually having a frank conversation about the money part, and then adjusting it based on budget and what’s realistic, that’s a patient compliance tool par excellence. It’s going to give people this emotional connection, and that’s very rare. What I’ve seen in clinics is, office managers figure out an informal way to do this, but it’s not formalized as part of the actual patient interaction. It’s more like, “What do you think? You can’t do that?” It’s not brought into the light. It’s more like a shamed conversation behind the scenes. This is great. You guys actually have a technique to make it real.” Dr. Dan Kalish
I coached our patients to feel comfortable and confident in communicating to Dr. Morris if his medical and lifestyle recommendations felt like more than what they could reasonably do and/or afford in the next six to eight weeks. I was forthright with our patients regarding finances. I created the term Functional Finances and spoke to each new patient about their long-term financial investment.
“I believe finances is a main initiator of illness. If we truly desire to have patients stay committed to the Functional Medicine process and partnership then we need to include the Functional Finances discussion in therapeutic care plans.” Kara Ware
I’m not a financial advisor, however, I chose to play offense and talk about the elephant in the room. I introduced to them that there is a sizeable investment upfront. However, I was clear that we are partners in the patients’ healing journey, and will work with the patient to create a plan that fits within the parameters of the patient’s monthly budget. This is not cutting corners on a patient’s therapeutic plan; it is partnering with the patient with the purpose to be with you for several years, rather than a few appointments. I ask patients “On a scale from 1-10, how comfortable are you asking Dr. Morris what are the priorities and what can be left for future consideration if the plan is financially unreasonable?”
This Functional Financial discussion makes it clear we are genuinely customizing their plan to fit their unique, current circumstances. When the patient feels we are their partners in their healing journey rather than upselling them to generate additional revenue, trust, and rapport are further cemented.
How can you be proactive and build a long-term viable business model?
Here are four recommendations:
#1. If you are a new practitioner, consider offering coupon codes discounting your $400-$500/hour fee until your reputation and word-of-mouth grow and your schedule becomes full. Once your reputation is established and you are running, you will no longer need the coupon code.
#2. Health Coaching is a pivotal role in Functional Medicine. If you would like assistance in preparing your patients to be your equal, therapeutic partner and include the Functional Finances as part of your patient’s care, schedule a free business integration consult to integrate a health coach in your clinical practice.
#3. Consider offering a group coaching outreach program centered around Dave Ramsey’s Financial Peace University. When I offered this group outreach program, one family I was coaching identified they were spending $700 a month on fast food. Previously, they thought they couldn’t afford Functional Medicine care for their son living with autism. When the family made a plan to reallocate those funds toward working with a Functional Medicine provider, after 18-months, their teenage son was no longer a threat to himself or those around him.
#4. Have your patients organize, document, track, and budget their functional medicine care by using this functional medicine care planner. Dr. Dan Kalish says this is “a patient compliance tool par excellence”.
I am a paid advisor at Pure Encapsulations, I do not have any other conflicts of interest. All podcast productions represent the opinions of the co-hosts and do not represent the position or the opinion of the sponsors. Reference by the presenter to any specific product, process, or service by trade name, trademark, or manufacturer does not constitute or imply endorsement or recommendations by the Sponsor. The podcast is not a substitute for standard medical care. The podcast is intended for licensed health care practitioners. Practitioners are solely responsible for the care and treatment provided to their own patients.