When setting cash practice prices for a cash-based medical practice, one of the most common mistakes new practitioners make is setting prices too low. It’s tempting to try to match local competitors or undercut others to attract more patients. However, this approach can backfire, leaving you overworked and under-compensated. In this post, we’ll dive into why setting your prices too low hurts your practice and how to price your services based on value rather than comparison.
Setting Cash Practice Prices: Avoiding the Rookie Mistake of Price Matching
My Early Pricing Missteps in Cash Practice
When I first opened my cash practice, I made the all-too-common mistake of pricing my services too low. Hoping to stay competitive, I initially set my fees just above a local doctor who charged only $19 per visit, landing at $29 myself. Despite my best intentions, patients still questioned the price, feeling it was high—even though the quality of care I offered far exceeded the cost.
The Importance of Value-Based Pricing
I quickly learned that pricing should be based on the value of your service, not just on what others charge. In a cash-based model, a 30-minute consultation can provide far more in-depth care than multiple shorter visits required by an insurance-based setting. This additional time allows you to deliver more comprehensive care and build a deeper understanding of each patient’s needs—value that is worth reflecting in your prices.
Reflecting Experience in Your Pricing
In one case, a patient with severe back pain was pain-free after a three-minute injection, though initially, he was hesitant about the fee. My staff explained that he was paying not just for those few minutes, but for my 30 years of professional experience and expertise. That accumulated knowledge is part of the service value, and your pricing should reflect that depth of experience. Help your patients understand the difference.
Setting prices too low can devalue your expertise and even attract patients who may not fully appreciate the level of care you provide. Remember, your prices should represent the quality, time, and experience you offer. Invest the time to assess your service value, and set prices that accurately reflect the high standard of care your patients receive.
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