This post was contributed by
Caryn Isaacs, Get Health Help
a mentor for those who are building an advocacy practice.
You may have noticed that all of the Patient Advocate Mentors, recommend some form of business planning. We all have successful businesses because we learned to price our services in a way that fits our individual approach to doing business.
I previously worked as a practice management consultant. The doctors I helped to start or expand their practices, never wanted to take the time to develop a pricing strategy for their services. They allowed the insurance companies to dictate what they would get paid. This led to a price war, to the bottom of the health care dollar. This in turn, caused many doctors to go out of business.
Each Patient Advocate has their own unique path to follow. After deciding on the services that you will offer, the next step is to put a value price on each item. It must be a dollar amount that will cover your costs and make you a profit.
In the current marketplace, there are no rules as to who can advertise advocacy services. It is tempting to look at other Patient Advocates and just follow what they are charging. However, simply meeting or beating the competition’s prices will not assure that your business will be profitable.
Pricing is a central component of your marketing plan. You may consider a variety of pricing strategies. You can simply add up all of your costs. This includes, but is not limited to; your personal expenses, insurance, legal, accounting, advertising, transportation and continuing education. Then, add $omething on, for your time. This is called Margin Based Pricing.
Another way is Freemium Pricing. You start out by offering some services for free and then charge a premium for other services, to make up for those you gave away. Penetration Pricing is where you set your prices low to attract new clients and then raise your prices, once your company has a successful track record.
You could also offer Sliding Scale Pricing, where you charge patients by their ability to pay. This can be risky if you are losing money on every sale. I use a form of Sliding Scale, whereby I vary the charges based on the complexity of the case. If I recognize that a patient has problems that will require extra time to deliver my services, I will build that into my fee.
Trisha Torrey, founder and director of the Alliance for Professional Health Advocates recommends that you never offer your services for free. I agree with her. I always charge some dollar amount. This way the potential client understands that we have a business relationship. If you don’t put a dollar value on your time, the client will see no value in your service.
Depending on the patient’s situation, I sometimes use a Bundled Pricing model. I start out with an assessment fee in order to determine the extent of the patient’s needs. After this initial evaluation, I add up all the steps it will take to advocate for this patient and I approximate a reasonable time frame to deliver my services. I can do this because I know what my costs are for each service. By pricing the job as a Bundle, I can make sure that I don’t have to go back to the patient to negotiate additional fees when the job is only partially completed.
I recommend starting your pricing strategy by considering what you need to get out of your business financially. You can more easily start and build your business, if you already have a source of income that covers your personal needs. I continued to derive income from my consulting business for over five years before Patient Advocacy could replace and exceed those earnings and I could devote all of my time to being a Patient Advocate.
Pricing your worth is one of the most important components of starting, building and running your Patient Advocate business. Remember, “If you fail to plan, you plan to fail!”