How to Communicate Increased Membership Fees
Physicians aren’t salespeople.
I know that’s not a revelation, but it does help highlight the difference between highly empathetic doctors accustomed to sharing their expertise for the betterment of others and persuasive sales representatives accustomed to hearing the word no constantly… and keeping right on selling.
Telling patients about price increases can be intimidating, and much of the difficulty stems from this fundamental difference.
When you have to communicate a price increase, it makes you feel more like a salesperson than a physician. It can cause a shift in the balance of authority, and it can grate against your empathy. You know people don’t like to pay more for things in general, and you don’t want to disappoint people you care about.
But if you raise your prices, communicating the change doesn’t have to be an ordeal.
If you communicate your prices well, the majority of patients will understand and stick around, but it requires some consideration and forethought. If you communicate the increase haphazardly or without strategy, negative consequences can ensue.
Why It’s Crucial to Communicate With Care
Really considering the best way to tell patients about a price increase and carrying out that communication well makes an enormous difference in your patients’ response to the news — and in how you feel delivering it.
Successful communication preserves your relationship with the patient, upholds your value, and reinforces your authority and reputation. Ultimately, it leads to membership retention — at the new rate — and perhaps even creates lifelong memberships.
On the flip side, poorly thought out or ineffective communication invites questions from patients that force you to justify the increase by outlining specific reasons, such as new services or equipment. This creates negotiating points for patients, inviting pushback like, “Well, what if I don’t use the new [equipment]?”
If you get into the position of negotiating with patients, empathetic physician that you are, you might end up meeting them halfway. Or 40% of the way. Or 30%. The point is, if you do that with too many patients, your carefully planned tier structure falls apart because every patient now has their own negotiated “tier.” Besides being incredibly uncomfortable, negotiations like this land you with an overcomplicated system that confuses patients and staff alike.
If you’re unable to communicate a price increase clearly and with conviction, you diminish your value in patients’ eyes. It can tarnish your carefully cultivated physician-patient relationship, and ultimately leads to them walking away. So let’s get this right!
Be Clear and Confident in Your Communication
You can raise your prices for all the right reasons and raise them the exact right amount, but communication is still key. If the communication is flubbed, even the perfect price increase can feel negative to patients.
Successful communication starts with your own conviction about a price increase. What you do is valuable, but if you don’t recognize your own value — as so many physicians don’t — you won’t feel confident about an increase.
It’s important to review why you’re raising your prices in the first place. It isn’t about greed. You’re not raising rates because you want to jump from a Mercedes to a Maserati. It’s about running a business sustainably for the long haul.
Rent, interest rates, taxes, and the cost of labor have all gone up. Overhead and supply chain issues are off the charts. Inflation, too. And then you have investments in the practice’s growth and expansion. Perhaps your local market (e.g. real estate, competitors, population size, etc.) has changed in a way that sparks the increase. All of this more than justifies price increases, and reviewing it will provide the conviction you need to communicate with confidence.
It’s true that you can’t go into any type of price increase and expect to retain everyone. Part of being confident is being prepared for patients to say no and walk away. Don’t be caught off guard. Mentally prepare yourself. 100% retention isn’t the goal; your practice’s sustainability is.
Tips for Communicating Simply and Effectively
I encourage you to read this paragraph twice: Your entire business is about being bespoke. You don’t practice one-size-fits-all medicine, and I’d encourage you to avoid one-size-fits-all communication for a subject as sensitive as price increases.
Consider how each patient would want to hear about a rate increase. What avenue takes their personality and preferences into account? Think also about who they would want to hear it from. Maybe it should come from the physician, or maybe it should come from someone else in the office in order to protect the physician-patient relationship.
It’s best to avoid blanket communication about an increase, at least when first introducing the change. Perhaps you’ll want to make a practice-wide announcement at some point, but we recommend waiting until after one-on-one conversations take place.
Even virtual communications can be personalized. Recording a video message to patients about an increase feels more personal than a generic email.
There isn’t one right way. The guiding principle is to provide individualized communication for patients in this matter just as you already do in health matters.
When you decide on an approach, make sure everyone in the practice is aligned with how the communication will work. You don’t want the receptionist or an MA casually floating out a rate change at check-in or while they’re taking a patient’s blood pressure.
An important side note: Inflation-related increases are absolutely crucial to practice sustainability. Regardless of how you handle other rate increases, it’s incredibly helpful to hard-wire regular (i.e. annual) inflationary increases into patient contracts right from the start of their memberships. Patients will know what to expect from the beginning, and you’ll be saved one conversation about rate increases, at least.
Should You Offer Discounts or Scholarships for Existing Members?
Some physicians offer partial or full scholarships, or discounts, to existing patients when there’s a price increase.
Whether you offer scholarships is entirely up to you. It depends on your comfort with that added layer of complexity as well as on the needs of your patients.
Some ROAMD members absolutely offer scholarships, and others absolutely do not. Some have particular patient populations they want to preserve and use scholarships to do so. Others want to avoid bringing in complicated negotiations and confusing concessions.
One of our members told us at last year’s Annual Meeting that when someone requests a discount, he asks, “Do you want a discount, or do you need a discount?” If they really need a discount, they can share their circumstances, and accommodations can be made accordingly until they’re able to get over a financial hump.
If you’re planning to discount, it makes sense to wait for patients to ask rather than to offer scholarships preemptively for patients you think will need them. And when they ask, finding out why they’re asking — need vs. want and temporary vs. permanent — will help you determine how much and for how long to discount.
Prepare for Difficult Conversations
Telling patients about a price increase takes some emotional preparation, especially for empathetic physicians. It’s difficult, but you have to be prepared for a few patients to walk away, and know how to handle if they do.
Will you offer discounts or short-term scholarships, or grandfather in your longest-running members? Will you be happy with 95% retention, or 90%? Whatever you do, don’t let yourself be caught off guard. Have a game plan, and prepare in advance for those conversations.
The goal is sustainability: serving more patients, and serving them for a long period of time.
How have you communicated price increases to patients in your practice? What has worked for you? What hasn’t? Take a moment to share your insights with the ROAMD community.
Dr. Scott Pope serves as the Chief Growth Officer at In Scope Ventures, a growth consulting firm focused on early stage healthcare companies. Scott is passionate about healthcare entrepreneurship and has been involved in various advocacy efforts to promote innovation in the industry.
Scott earned his PharmD from Ohio Northern University, where he participated in Habitat for Humanity, Phi Mu Delta, Order of Omega, and NCAA basketball. After graduating from ONU, Scott completed a pharmacy residency at Cone Health, followed by a specialty residency in infectious diseases, internal medicine, and academics at Campbell University and Duke University Medical Center.
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