The 1 Thing You Need to Know When Pricing Your Medical Services

As doctors we're often hesitant to price our services according to their market value. We hate it when someone thinks what we do is "expensive". But in reality, expensive is relative. Here's what I mean

Jul 7, 2022

Man sitting on mercedes-benz car's hood
Photo by Freddy Kearney on Unsplash
Table of Contents
    Add a header to begin generating the table of contents

    A few days ago I wrote a deep dive on the 7 ingredients to create an irresistible offer.

    One of these is price. I like talking openly about price because it’s a topic many doctors treat as taboo. We all need to make a living but we hate the idea of having to charg our patients for our services. We also feel like we need to price our services at the absolute lowest we can or we’re breaking some unwritten rule (which hospitals, pharma and insurance seem to have no knowledge about…).

    But the truth is, price is relative.

    “Expensive” is relative.

    Is a $10,000 price tag expensive?

    As it often is the case, the correct answer is, it depends. If we’re talking about a pair of sunglasses, then yes. It’s expensive.

    But if someone comes around and tells you they’re selling their Lamborghini Veneno for $10,000?

    Then it’s a bargain.

    Value is relative

    How come Rolex watches sell for thousands of dollars when it gives exact same time a cheap Casio does?

    Sure, Rolex are made with better materials, have Swiss engineering, are more precise, don’t need batteries, and a long list of etceteras. And if all of these things give a higher “value” to Rolex, how come there’s people who don’t care (assuming they could afford either one) and still get the cheap one?

    Simple, value is not determined by the features of a product or service.

    It’s determined by the person buying it.

    What’s valuable to one, might be invaluable to someone else.

    The example I often give to illustrate this is of an ortho surgeon.

    Let’s assume this ortho surgeon is repairing an ACL in three different patients:

    • Patient 1 is a 39 year old, middle class man who had an accident at work.
    • Patient 2 is a promising 19 year old college athlete who suffered an injury after a bad tackle playing soccer.
    • Patient 3 is a 29 year old NBA superstar who suffered an injury a week before the season starts.

    All 3 of them require essentially the same intervention. It will take the same amount of time. Require the same type and amount of materials. And will involve the exact same group of people.

    If the ortho surgeon decided to price this repair at 25k it would be seen as expensive by patient 1, adequate by patient 2, and a bargain by patient 3.

    Instead of breaking your head trying to think of ways, tricks, and strategies to convince your existing patients to see “the value” in your services, figure out who are the “NBA superstar patients” who’d see your offer as a bargain.

    If you’d like some help figuring that out, schedule a 1:1 call with me.

    Table of Contents
      Add a header to begin generating the table of contents

      Subscribe (for free) today

      Sign up for the newsletter that helps subject-matter experts build a business aligned with their life goals.

      Join 441+ other subject-matter experts