Negotiating Fees

A couple of comments in the blogs and forums have gotten me to thinking of fees again and how to present them to patients. It seems that more than a few acupuncturists who practice in the Boutique style and some who practice in the Hybrid style have a certain rationale to their fee structure:

A certain fairly high fee, say $50+ a visit, but will go lower than that if the patient can’t/won’t pay that amount. I say “can’t/won’t” because it seems like there is some negotiating taking place, some haggling if you will. Sometimes this is justified as an act of compassion to lower the price; sometimes this is attributed to good business sense ($20 is at least better than having the patient walk out.)

I see a problem with this. This is bad business.

The reason that it is a bad business practice is that in part comes from a lack of understanding of how acupuncture works and in part not realizing that negotiating prices actually turn away customers.

Acupuncture is meant to be administered frequently: a lot of treatments in a short amount of time. It doesn’t make any difference about how good of an acupuncturist you are; if you don’t see your patients often enough and frequently enough, you will not wind up helping many of them. (Sometimes I am amazed that acupuncture schools don’t drill this into their students’ heads from the first class all the way to graduation. Its one of the few things all acupuncturists MUST learn. That the far majority don’t learn it gives us a good idea on the state of acupuncture practices in this country.)

Most acupuncturists don’t understand this simple principle of frequency. You can tell this by seeing fees of $50 and up. Most acupuncturists think they are charging for one treatment. They are wrong of course. They are in reality setting the bar for a series of treatments because, again, almost every patient needs o come a bunch of times. Because of this confusion, patients are less likely to keep coming even if they agree to the initial price, because they can’t afford 10-20 or more treatments of $50 and up. What happens then is the patient stops treatment, thinking that 1) acupuncture is too expensive for them and 2) it doesn’t really work anyway.

I hope everyone here can see the shortsightedness of a high fee. But what happens with those practitioners who are willing to haggle?

First it must be said that haggling over price is a time honored practice throughout both history and in every culture. Even we Americans do it, especially when it comes to big ticket items like cars and houses. But is it the best thing for us acupuncturists? More broadly, is haggling the best way to earn a living? No, it’s not, and I have the Quaker tradition to back me up.

Those folks here with access to the forums can read what I wrote about the Quakers in the Philosophy forum. I will sum up below for the rest:

Quakers were one of the first major religious sects in this country; with a primarily mystical focus they were unique. Their influence on the development of our country was (and still is) immense. Interestingly one area that they were influential was in the realm of economics. With their strong tradition of honesty they were the first group to promote the idea of setting a price on a thing and sticking to it. No haggling. What you see is what you get. Honesty up front.

This was a revolutionary idea when it was introduced and the upshot was that the Quakers got very very rich by being honest. Customers liked the idea of a set published price. That sounds very simple and it is. People flocked to Quaker stores, prompting this saying about them:

The Quakers came to do good in the world and they did very well indeed.

So what does this have to do with the acupuncturist who is willing to lower their price if the customer balks at the established price? It means that its a bad business practice because the honesty is lacking. The far majority of customers don’t like negotiating their fees. They feel bad if they can’t pay the established price. Often they won’t negotiate. Instead they either don’t come in or they pay it once or twice and stop coming even if they don’t feel better. This type of business practice, even under the guise of “compassion” kills the practice. Since word of mouth is an acupuncturist's life blood, if word gets out that 1) the price is unaffordable and 2) the price listed varies from patient to patient then that acupuncturist is not getting good word of mouth and their practice will suffer.

Guaranteed.

Ultimately there’s no reason to charge a high price that you are willing to lower, often quite substantially, if the patient says they want a lower price. You wind up taking in less money than you would if everybody came in at that lower price.

But, says the BA acupuncturist, I can tell who can pay the higher fees and who can’t! Pfffft, says I. Think of it this way: Hopefully you were taught “universal precautions for blood-borne pathogens”, meaning, to treat every patient you see as if they have Hep C or HIV. Why? Because you never know if they will tell you. The same is true in trying to assess a patient’s financial situation. You know neither their true income nor their true expenses. You don’t know what value they place on correcting their health problem either. So how can you possibly know what you can get them to pay? Obviously you can’t. Ethically, negotiating fees while providing health care is highly dubious too. As it turns out most acupuncturists who try this fail. Why then should one go down this path?