Medical Practices: Don’t Compete on Price, Compete on Value.

 

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When other establishments offer services that overlap a medical office’s services, like for example, CVS and Walgreens offering flu shots, or retail clinics offering inexpensive school physicals, I read and hear about medical offices rushing to match prices in an effort to stay competitive.

BAD IDEA

Competing on price is almost always a bad idea. Why? It is a bad idea because it diminishes the services private medical offices provide. By “matching” retail clinics, or other low end establishment, a medical practice is suggesting that there is a not a qualitative differentiation between their services, expertise, and knowledge when compared to these businesses. In other words, offering service for as cheap as a retail, drive-by clinic or the likes, one is in essence suggesting to patients there is no significant inherent value worth paying for.

WHEN YOU COMPETE ON PRICE, YOU WILL AMOST ALWAYS LOSE

You might have heard of a saying that goes something like this “Never argue with an idiot. They will bring you down to their level and beat you with experience.”

Actually, this also applies when talking about price. Except it may read like this, “Never compete on price with Walgreens. They will bring your cost down to their level and beat you with experience.”

CVS, RiteAid, Walgreens and the likes are really good at cutting cost. And let’s face it, even if your office is really good at cutting cost too, it will never be as good as a giant retailer.

OUTSIDE OF HEALTHCARE

What would happen if BMW,  Mercedez Benz or Audi offered their cars at the same price as a Toyota Corolla? What would happen to their brands if they started doing that?

While it is true that there are cheaper alternatives to an Apple computer, Rolex and Neiman Markus, these brands simply don’t do cheap or inexpensive. They offer value worth paying for to those that want to pay for value.

BAD FOR PRIMARY CARE

Lastly, by competing on price alone, one is contributing to one of the fundamental erroneous notions out there that is, primary care is a commodity.

There is enormous value in primary care. It is highly valuable. Don’t devalue it, by trying to make it cheap.

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