This post is the answer to a question from a Profit Club member about price issues and insurance companies involvement in health care – I hope you like it:
Hi Paul – Really enjoying your informative emails, so much so we’ve joined the Profit Club program.
I have two quick questions for you regarding your stance on “preferred provider schemes”.
1) Do you think the majority of your clients (any idea of a % would be interesting) would pay $70+ for physio sessions without private health rebates? (I personally think not).
2) Following on from that do you believe your health practices could be anywhere near as profitable without the assistance of private health insurance? (again negative in my mind).
Let me answer your question directly then I will add some extra points for you to ponder:
1) I would like to think that 100% of our current private patients would still attend our clinics regardless of their private health insurance status – in reality it may be more like 90%.
2) I actually believe that the input of private health insurance actually NEGATIVELY impacts profits – no different than insurance companies that determine our fees.
Let me expand a little – I hope you are ready for this:
– As our current fees are already higher than most ( if not all ) of our competitors – our privately insured patients are actually already paying more to see us than they would to see another provider – so the health fund issue does not really matter.
– You seem to be very focused on “price” – patients don’t care about the price if they are getting great value.
– People are value sensitive – not price sensitive – give great value and the private health fund rebate is not even an issue.
– Understand that not all clients are the same – you need to get rid of the patients that are only seeing you because of the private health fund rebate – these are your “D” class clients and are better off at your competitor’s clinics whinging to them – sorry – but it’s the truth.
– You need to work on the real reason why your clients are seeing you – and it is not to get rid of the pain – it is to play with the kids, go on that holiday, run that marathon – if you can target the patients “significant emotional event” – you quickly move past any price issue.
– On a similar issue – the enhanced primary care rebate and the medicare rebate for Exercise Physiologists – does nothing more than drive low potential fee paying clients into your business – these are not your ideal clients – again send them to your competitors.
– I have had massage therapists on my team who have had full appointment books and not be able to get health fund rebates for their massage session – and also some massage therapists who can offer a rebate but their books are empty – it is all about the therapists and the perceived value they deliver.
– I personally believe that the less you say about any health fund rebates the better – this rebate issue is not your concern – all you should think about is giving excellent care at a fair and reasonable price – but above all giving excellent value to your client for each and every session.
I welcome your comments on this issue.