This is why listing healthcare prices as a menu is dumb

Editor's Note: Welcome to Medical Economics' blog section which features contributions from members of the medical community. These blogs are an opportunity for bloggers to engage with readers about a topic that is top of mind, whether it is practice management, experiences with patients, the industry, medicine in general, or healthcare reform. The series continues with this blog by Jonathan Kaplan, MD, MPH, a board-certified plasic surgeon based in San Francisco, California. The views expressed in these blogs are those of their respective contributors and do not represent the views of Medical Economics or UBM Medica.

Dr. Jonathan KaplanWhether it’s for cosmetic services or medically necessary procedures (before a deductible is met), knowing healthcare prices is important. Patients need to know their financial obligation and healthcare providers need to be sympathetic to their patient’s financial worries. So yes, providing healthcare pricing is important, but listing them in the form of a static menu is not helpful.

So why is a static menu the wrong way to list healthcare prices?

Take a look at the static menu of healthcare services and prices above. What strikes you (consumer or provider) as confusing? First, the ranges are huge, to the point of being useless. For example, the fat transfer to the face ranges from $2,500 to $6,500. What if I was a web developer and you, the healthcare provider or small business owner, wanted a new website and I told you it would be $12,500 to $26,500? You would politely or impolitely hang up the phone and move on to the next developer.

Image courtesy of Dr. Kaplan

Patients are no different. They want an  accurate estimate even if it isn’t necessarily an exact estimate. And that’s the problem with static menus. There’s an attempt to provide the patient with all potential prices and scenarios. But somewhere you cross over from a modicum of information into the realm of too much information that is overwhelming and inaccurate.

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Why do providers using static menus try and provide as much information as possible? Because they’re assuming the consumer will look at the pricing menu and move on. In other words, the provider believes that everyone checking costs is a price shopper (which isn’t true) and the doctor/facility won’t have the opportunity to offer more pricing and procedure education down the road. But if you have the consumer’s contact info, you’ll be able to follow up to provide more accurate information.

Next: This is the right way to offer pricing info

The right way to offer pricing information: A price estimator

That’s where a price estimator comes in. The consumer can choose various services or procedures from a price estimator on your website and submit the “wishlist” along with their contact info to receive immediate pricing information. The consumer gets the immediate gratification of pricing info and the healthcare provider receives the consumer’s contact information for follow up. Everyone wins. Even if a competitor simply lists pricing in a menu, the doctor with a Price Estimator still has the advantage because they’re generating leads for follow up, whereas the other doctor is not.

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Aside from the fact that the static pricing menu provides no lead generation whatsoever, it forces the provider to generalize. In contrast, the price estimator allows the healthcare provider to offer the most accurate estimates for the most common procedures. Even if the price estimator doesn’t list every potential scenario, thus forcing the consumer to choose a “close enough” procedure, the healthcare provider still obtains contact info to provide further education.

What if a doctor provided a static menu of pricing in exchange for a lead? While this would provide the consumer with pricing information and the doctor with a lead, it fails where a price estimator succeeds.

The automaticity of a price estimator is key. After a wishlist is submitted, the patient instantly receives an automated email with the information the patient is requesting. No need for the office staff to manually reply with an attached fee schedule.

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More importantly, a patient is asking for pricing (and a breakdown of the costs) for a specific procedure. In response, if the doctor’s office sends them the entire fee schedule which they then have to navigate for themselves. Compare that to a price estimator that breaks down the cost among the constituent fees, specific to the procedures the consumer is most interested in. Certainly you can break down the costs for all of the procedures on a static menu, but then you’ve turned an already excessive and overwhelming list into an unwieldy spreadsheet.

Next: If healthcare.gov can do it, so can you

If healthcare.gov can do it, so can you

But let’s be honest-common procedures are common. It’s not that hard to list a few variations on the same service or procedure. In other words, you don’t have to list a $4,000 range for fat grafting to the face. You can be more specific and list multiple options for fat grafting to different areas of the face. You could stratify those procedures on a static menu but again, you get no lead generation in the process.

More from Dr. Kaplan: Surprising benefits of price transparency and how to utilize them

Also, let’s keep in mind that if healthcare.gov lists multiple health insurance plans in a region, followed by the copays, the deductibles and the out-of-pocket maximum for a bronze, silver, gold and platinum plan, you can list a few variations on an MRI of the lower spine (with or without contrast)!

Lastly, healthcare, no matter how easy we try to make it, is still complicated. And for a field that has so much complexity, the consumer needs help. When a consumer submits their contact info along with a request for pricing information through a price estimator, it’s really a cry for help. Not only are they trying to determine an accurate estimate for services, they’re asking for assistance from the provider’s office or facility.

In other words, they’re looking for a healthcare “navigator.” And if someone coined a name for that job description, it means there’s a need. Thus, having a patient’s contact info via a price estimator leads to greater assistance for the patient, better customer service and hopefully better online reviews in your future.

Dr. Jonathan Kaplan is a board-certified plastic surgeon based in San Francisco, CA and founder/CEO of BuildMyBod Health, an online marketplace for healthcare services that allows consumers to determine cost on out-of-pocket procedures, purchase non-surgical services, and in exchange, the healthcare providers receive consumer contact info - a lead, for follow up. Currently, the BuildMyBod Health database consists of over 250 and growing board-certified plastic surgeons, dermatologists, primary care, dentists, Ob/Gyns, medspas, surgery centers and other health care providers that believe in price transparency.