The Price Is Right

All practices benefit from regularly reviewing their procedure pricing. Below are some strategies to get you started.
The Price  Is Right

It’s no surprise—the cost of an elective cosmetic or dermatologic procedure is an important factor for patients as they consider not only who will perform a procedure, but whether they will even have it done. According to a recent study by the American Academy of Facial Plastic and Reconstructive Surgery (AAFPRS), cost is a major deciding factor for 71% of patients.

For practitioners, pricing can be as much an art as it is a science. It’s not just about calculating how much is needed to cover overhead costs, salaries and supplies—including equipment and disposables—setting prices also attaches value to more intangible items, such as a doctor’s experience and expertise.

“Patients are buying our ability and our skill in treatment with that product,” says Heidi Waldorf, MD, of Waldorf Dermatology and Cosmetic Surgery in Nanuet, New York. When patients raise a question about cost, Dr. Waldorf, who is also director of Laser and Cosmetic Surgery at Mount Sinai Medical Center, has a ready reply. “If a patient says, ‘It took only 20 minutes to do,’ I say, ‘Actually, it took 20 minutes and 20 years of experience.’”

Part of the challenge is weighing what you need, what you deserve, and what consumers in your area are willing and able to spend on treatment.

Setting prices low may attract a volume of patients to your door, but it may not bring the type of patients that will sustain a practice. “Customers who constantly shop prices are not as valuable to us as those with whom we develop a long-term relationship,” says Edwin Williams, MD, of the Williams Center for Plastic Surgery with offices in Manhattan and Latham, New York. On the other hand, setting prices too high may scare away prospective patients.

Starting Points

Both new and existing practices benefit from comparing their pricing strategies to other similar practices, and there are several resources available to help you get started. The American Society of Plastic Surgeons (ASPS) offers statistics on procedure pricing nationally. These figures are available on the ASPS website (plasticsurgery.org). Input on pricing can also be sought from marketing managers or manufacturing representatives. “You can get some feedback from reps as far as what they think the market will bear,” says Edward Farrior, MD, a facial plastic surgeon in Tampa, Florida, and president of the AAFPRS.

Dr. Waldorf recommends seeking information from other practitioners at professional meetings and conferences. “When you’re at a meeting, you’re learning from people speaking on the podium, but even more, you’re learning between sessions when you’re talking to your colleagues,” she says.

For procedures, such as injectables, the standard approach is to double the price of the materials used. But practices will benefit from delving deeper when setting competitive prices that will support the facility’s bottom line. “You can come up with a cost based on expenses and what profit you need to send your kids to college, but you also need to be competitive in the market,” says Dr. Farrior.

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