The EntreMD Podcast

Boost Your Cash-Pay Practice Profit with This Winning Pricing Strategy

• Dr. Una • Episode 485

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The number one reason for pain and suffering in cash-based private practices is bad pricing.

I see it all the time… Doctors charging prices that either don’t cover their costs or leave them overwhelmed and underpaid. If this sounds familiar, you’re not alone. But here’s the good news: you can fix it. In this episode, I’m showing you exactly how to set your pricing right so you can build a practice that’s profitable, sustainable, and enjoyable.

I’ll walk you through the simple math behind pricing and the key principles you need to consider when choosing your price point. From understanding the relationship between your pricing, patient load, and revenue to knowing the three key choices you have when your numbers aren’t adding up, this episode is packed with actionable tips to help you make informed decisions.

Tune in!

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Key Takeaways: 

  • 00:00 Intro 
  • 01:40 The overarching principles of pricing 
  • 03:37 Million-dollar math 
  • 04:30 Examples of pricing strategies
  • 08:23 Three options if you don’t like your potential revenue 
  • 10:26 Lean into the value that your offer
  • 14:09 High ticket vs. low ticket model 
  • 18:25 Your homework
  • 22:33 Outro 

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Additional Resources:


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  • EntreMD Business School Scale - This is our high-level mastermind for physicians who have crossed the seven figure milestone and want to build their businesses to be well oiled machines that can run without them.

To get on a call with my team to determine your next best step, go here ...

Speaker 1:

Many people tell you oh, in pediatrics you can't build a seven-figure practice, blah, blah, blah, blah. No, you can't. Last year we did about 1.7 million and it's a low-ticket model. You have to understand this. Business is math. Business is an economic sport. Hi docs, welcome to the EntreMD podcast, where it's all about helping amazing physicians just like you embrace entrepreneurship so you can have the freedom to live life and practice medicine on your terms. I'm your host, dr Imna.

Speaker 1:

The number one reason for pain and suffering in cash-based private practices, which I have studied for over six years now, is bad pricing. Okay, and the way this typically works is people either think about a price they feel good about, they feel like this is what people can pay, or they pick a price that they see other people charging. They just pull off a price off the internet and they're so unhappy with the results that they get. And so today, what I'm going to do is I am going to show you how to pick the pricing for your own cashless practice, and this is a pricing that will make sure thatbased practice. And this is a pricing that will make sure that you're profitable. This is a pricing that will make sure that you enjoy the work you do, you have the time off you want, you're serving the number of people you want to have, like you are. You have a practice by design, okay, not by default. And so recently in the Entremet Business School, one of the students she has a private practice that's going to start a cash-based practice. That's going to start a cash-based practice that's going to start off in a few months here and she says you know, dr Una, I'm so confused I don't know what to do with my pricing. I stopped to walk her through this concept and I figured I would share it with you, because this comes up so much and if you get this, you're going to enjoy your practice so much more. Okay, all right.

Speaker 1:

So I want to give you a few principles here, and these are important. All right, so I want to give you a few principles here. These are important, these are overarching principles. The first is there's no right or wrong. You know, sometimes people are like if you charge, you know, higher, then you're bad, if you charge lower, then you're good. There's no right or wrong. I mean, it just is right Because you want to build a business, and no matter what type of business you, it is a win for your patients or win for your clients, and it is a win for you. It needs to be a two-way street, right and so there is no right or wrong and I'll walk you through that.

Speaker 1:

The second overarching principle is when you choose your pricing, you also have to choose the consequences of your pricing. You don't get to pick and choose. By choosing the pricing, you choose the consequence okay, and, for instance, if you look at a very broad way of looking at it and I've talked about this a lot on the OnTrimmed podcast there's an episode I did that is the business math, right, and the math needs to math. So, for instance, if you choose a higher price, then you also have the luxury of having fewer patients. If you choose a lower price, then you have to have the number of patients you need to get to where you need to get to right. Like you don't get to choose, you don't get to choose both. Okay, you can choose the pricing and you choose the consequences, right. If you choose a higher pricing, then you also choose the consequences of getting good at selling. Like you're not going to get away with not doing that, okay, all right, and then you know.

Speaker 1:

The other principle is. You know and I alluded to this a little bit is that the prevailing prices are wonderful, but they have to work for you. Okay, we work too hard to not have businesses that we love. Okay, we did the whole pre-med thing and we did the high school thing so we could get a good pre-med program. We did pre-med, we did med school, we did residency, some of you did fellowship. You did all of these things not to get to a place where then you build a practice that you hate. You want to have a practice that you love, okay, all right. So let's look at what I call million-dollar math. Okay, this is million dollar math for entrepreneurs. Okay, I want you to think of it this way X plus Y is equal to Z. Okay, now, x plus Y is equal to Z.

Speaker 1:

Let's take some things here. So X could be you know how much, you know what's your monthly membership costs, okay. So you know $60, $100, $150, $200, $500, whatever. It is okay. And then that's X, and then Y is your panel size, okay. So you may say I wanna have 300 is a number I hear a lot in the DPC world, right, like so you say you wanna have 300 people, you wanna have 200, you wanna have 500. I've seen people that spend 800, okay, so you want to have that. And then Z is your revenue, okay. So X is your revenue. Okay. So X is your membership, your monthly membership, whatever that price is. Y is your panel size, z is your revenue.

Speaker 1:

So let me give you a few examples. Okay, I took some time to do a few examples here. So let's say you're like you know, what I want to charge is $60 a month, okay, and I want to have 300 people. For these examples I'll just use 300 people. I want to have 300 people. You know that's the panel size I want and that's it. That comes to $18,000 a month. Okay, that's what it comes to. And let me give you what it comes to per year. I'm really good at math, but yeah, okay, so $216,000 a year.

Speaker 1:

So if we go back to you getting to choose, you can choose the panel size and the revenue and then you have to reverse engineer to get how much your pricing is, or you can charge the price you want to charge and have the panel size. I have to be okay with the revenue that comes out on the other side, but you cannot choose all three numbers. So let's say you're not $60 a month, maybe you're $100 a month okay, and $100 a month 300 people. That comes to to 30,000 a month or $360,000 a year Okay.

Speaker 1:

Again, if you wanted to change a number, you get two numbers to play around with, but you don't get to play with all three. If you choose $150 a month, it comes to 45,000 a month or 540,000 a year. Or you choose 300 a month, it comes to 90,000 per month or a million a year, up to $90,000 per month, or a million a year, or a million and $80,000. Okay, so you see how, like right now, I did this math playing only with the pricing, but you can play with the panel size. You may say, no, I want to keep my pricing the same but I don't like the revenue. So I want to increase my panel size, okay, or I'm fine with the revenue. Some people even said I'm fine with the revenue because I really want to charge a little and I'll do five locum shifts a month to make up the difference. Whatever, the point here is, you don't get to choose all three numbers.

Speaker 1:

So this is what I think is a complete disaster when you think about cash-based practices. I've heard people tell me. This is doctors. We're nice, we love people, we want to help people, we want to make a difference in the world, so this is what we do. So this doctor says I want people to have access to care and so I'm going to charge a little bit. I'm going to charge, you know, $60. That's what I'm going to charge. And then I believe people deserve all the time that they want to, you know, like all the time with their doctor that they deserve. So I don't even want to have 300 people, I want to have 200 people. That's about how much I want to do. Now. This comes to less than $200,000 a year before overhead. And the person is also I want to be financially free, I want to take X number of days off, I want to have this much in the bank and all that stuff.

Speaker 1:

I'm like you can't choose all three numbers. You can only choose two numbers, which is a great deal if you think about it, because you have two numbers, two out of three. That's fair right, but you can't choose all three. And so if you look at the revenue and this is a number most doctors will not think about They'll think about how much they're charged. They think about how many people they want to have. They'll think about the kind of service they want to offer. They'll think of extra services to add on, and all they're not thinking about the revenue. Business is an economic sport. You have to have all three numbers, okay. Okay, so you put all three numbers. This is how much I want to charge, this is what my panel size would be and this is how much I'm bringing in.

Speaker 1:

Many times when I have, it's math, right, it's math, and there's nothing wrong. If you're like I only want to bring in $50,000. That's fine, as long as you're choosing to do that, not that you accidentally at the end of the year, you're like how come I have $50,000? Or you feel like they're so hard, I could work and I could make more. I'm like no, with this equation, this is your cap, this is it right? So if you do the math and you're like okay, I'm doing 60 a year, I have a panel size of 300. I'm bringing in $216,000 a year and I don't like the number, okay, and this is important, make sure you do your math. If you don't like the revenue number before overhead, because we're not talking profit, this is overhead. Okay, this is revenue overall.

Speaker 1:

If you don't like the number, you have three options. Okay, these are the three options and this is just the way it is. Okay. What do you need to do if you don't like your revenue number, your potential revenue? Number one you could charge more. Okay, you could charge more. That's one way you can change your revenue number. Number two you can have a bigger panel size.

Speaker 1:

Okay, so maybe you're not doing 300. Maybe you're doing 350 or doing 400. Again, there's no right or wrong. I'm not telling you what to do. I'm showing you how to think of it. Think of this as informed consent. Right, we're giving you all the details you need so you can make an informed decision. Okay, so you can see something on the internet. You can see something on the internet. You can see something somebody else is charging, you can see whatever, but you know how to make an informed decision.

Speaker 1:

Okay, so, number one you can charge more. Number two you can say no, I don't want to charge more, I want to see more patients, and you can go ahead and see more patients. Right, you can say okay, I want my panels to be 400, or I want my panel to be whatever that is. These are literally your options as far as you're talking about making money from the business model you're in. These are the options. That's it. So, number one charge more. Number two increase your panel size.

Speaker 1:

Number three if you're like I don't want to do that, don't want to do that, then find a way to be okay with the number. Find a way to be okay with $216,000. To be okay with $216,000. Find a way to go like maybe I'll make some cuts here, I'll make some cuts there, maybe I'm going to take a locum shift, whatever, I'm cool either way. You want to do it. But just understand you cannot choose the panel size, the price and the revenue. You can't. Once you choose the pricing and you choose the panel size, it will choose the revenue for you and you have to be okay with that number or you have to play with the numbers. The math has to math, okay. So this is the way I want you to think about it from today. I want you to be able to make informed decisions. I want you to be able to build a practice that you love, okay.

Speaker 1:

Now somebody may say well, I don't, you know, I don't want to charge more, I don't think I could charge more. I'm not confident charging more. That is a skill, the skill of leaning into the value that you offer, because you're like, oh well, it's just one hour visits, nobody pays for one hour visits. People don't pay for one hour visits. People pay for results, right, and that results could be whatever happens with their symptoms, depending on the type of medicine that you practice. The results could be that they have access to care. The results could be that you know they can get in next day. They have the same doctor. You have to find out what it is that is valuable to your people. So, whatever that is, you have to find what that is and lean into it and understand that people pay for it.

Speaker 1:

Now am I telling you, you know, go charge the most because you're a greedy doctor? No, but we live in an economic world and sometimes you might want to play with stuff. I mean, there are doctors who charge $100,000 a year. There are doctors who charge $200,000 a year. There are health coaches who charge $75,000 a year. Am I telling you to go charge those amounts? No, I'm just trying to help you understand that you thinking people won't pay whatever that $750 for the initial visit, right? And so I just want you to think in those terms. I want you to think in those terms, and so if you're thinking about that, then you want to learn that skill.

Speaker 1:

Okay, I have a podcast episode that is called Ethical Pricing. You want to watch that? You want to check that out? Listen to it. I have another one where I talk about falling in love with your offer. So you fall in love with the results that your business creates, right, and which makes it easier to charge, and all of that stuff.

Speaker 1:

If you say, no, that's not what I want to do, I want to have more, I want to have a bigger panel size Then the question then becomes how can I give them top-notch, wonderful care leveraging a team or leveraging automation or leveraging, you know, like those kind of things so that I can see more people, but in about the same amount of time and with the same amount of effort, right? And so if you're deciding that's the way I want to go, then that becomes the skill that you need to learn, and so, yes, you can do what needs to be done so that you can build a practice that is profitable. I cannot tell you how many doctors I find are comfortable running businesses that are not profitable, and I'm not talking like they're ramping up or they came on a bad month. I'm talking like this is the whole model. The model is designed not to work. I want to invite you to be the architect of your business.

Speaker 1:

And what architects do is they take something that is an idea and they map it all out on paper. They don't start building and say, oh, where are we going? And stuff like that. They don't do that. They map it out all on paper and when they worked out everything, they worked out the dimensions, they worked out everything. Then they come back and then actually build the building.

Speaker 1:

I want you to build your business that way, because if you do that, then you will understand it doesn't matter how hard I work, this is never going to create money. It doesn't matter how hard I work, this is never going to create financial freedom. Right, and you have to decide if you want to do that or not. Okay, you have to decide. So don't forget X plus Y is equal to Z and you only get to pick two numbers. Okay, if you do the math and you don't like the revenue you end up with, you can change your price, you can change your panel size, or you can get okay with the revenue. Okay, and I hope you don't get okay with a kind of revenue that doesn't serve you. Right, like again your business. You want to create a win-win situation. You want it to be a win for you and you want it to be a win for your patients.

Speaker 1:

Now let me just talk a little bit about this whole high ticket, low ticket type of model, because I have, you know, I run five companies and I can use two as an example. I have what I would consider a low ticket business, which is my private practice, which is my first business. Now, my private practice is a. There are a number of things about it, so one is that it's insurance-based, it's lower ticket, if you will. It is also pediatrics, right, and you know pediatrics is one of the lowest paying specialties and it is also about 50 to 60% Medicaid and I left it that way because I want them to have access to good care. So you can see that I intentionally chose a low ticket model. I intentionally chose a low ticket model. Okay, I chose a low ticket model.

Speaker 1:

Now I also want to be able to create the revenue that lends itself to profitability, right, where my practice is profitable, I can pay my team, I can pay myself, there's a profit for the business, I can fund my financial freedom and all of those things. So you see, I've picked two things. I've picked X and I've picked Z. Okay, ok, so I picked the pricing right low ticket and I picked revenue. So what that means is I don't get to pick panel size. If I have a low ticket and I want to make good revenue, it means I need to be high volume, and that is it Right. So madness would be for me to say, oh, I want Medicaid, I want insurance, I want all of that, and I want them to have a one hour visit. This is not an equation that works. The math is not mathing.

Speaker 1:

Okay, what that meant was my core skill became the capacity, the ability to build a system, a healthcare system that allows me to handle high volumes but still give them a great experience, because it is a requirement for my model, a requirement, right, okay. And so that's when we call our door to door. We call that whole journey the assembly line. And we call it the assembly line not because there's no human connection, but because I want people thinking in terms of engineering, efficiency and all of those things, and so we study that. We study that assembly line and all of those things, and so we studied that assembly line. We studied where the breakdown is.

Speaker 1:

I studied how to leverage team to give people a wow experience even though I'm not with them. You know, like for an hour, I became really good at you know, quickly identifying what is the main reason why this person is here, so I can solve the actual issue, and all of those things. And I got really good at it. I could have a day I see 25, 30 patients and all of them are like oh my goodness, dr Una is the best right. It's not accidental. I was very clear that, because of what I'm trying to build, this is what is required. Okay, so that's my low ticket business.

Speaker 1:

On the other hand, I have Entremdi, and the Entremdy business school, for instance, is a $30,000 product. It's not low ticket, it's high ticket right. In that case, what becomes the master skill? I need to learn right. So pricing became something you know. Pricing I had to learn that. Selling I had to learn that right. Being able to create the value that people pay $30,000 for right that became a master skill that I had to learn. So selling became this big master skill, creating massive results became.

Speaker 1:

Not that we didn't do it in the other model, of course we did, but now this is even more important, right? Because then you're also going to rely on repeat business and all of these things. And so I recognized that's the master skill. It wasn't the only skill, but if I was going to skip a skill it would not be this one, and so I had to develop that. So both businesses are thriving, like really thriving, and one is a low ticket and one is a high ticket.

Speaker 1:

And so many people tell you oh, in pediatrics you can't build a seven figure practice blah, blah, blah, blah, blah. No, you can, you can. I think last year we did about 1.7 million or something like that, and it's a low ticket model. Do you see what I'm saying? You have to understand this. Business is math, business is an economic sport. We get to pick two out of three. We do not get to pick three out of three.

Speaker 1:

Okay, and so pick a model. Obey the laws of the model when you pick X and Y, or X and Z, or whatever. Y and Z, just understand. The third number is picked for you and you must obey the laws. You must obey the laws that go along with them.

Speaker 1:

Okay, so what I want you to do is I want you to do your math. Okay, I want you to do your math. What is it going to be for you? Okay, so this is how much I charge. This is the panel size I want. That means my potential revenue is Z, and look at that number. Okay, you have to look at that number. Then you know you can extrapolate what's your overhead 30%, 20%, you know whatever.

Speaker 1:

Before you pay yourself, like decide and go like do I want this, is this going to take me where I'm going? Like you know, or whatever. So you do the math, then you look at the revenue and decide is this good, is this what I want? Like, is this my dream practice? Am I going in the direction I thought I was going in or I want to go in? Right, these are the questions to then ask and, if there are any changes, make them. If there are any skills, you then now know that, okay, this is the skill I must focus on learning and building and cultivating. Then it's time to cultivate that. Okay, but what I hope you've walked away with here is that you know, like you know, I wonder what I'll try, like you can wonder, but at least now you can decide. Like this is what I want to do. And I'll tell you what I told this doctor. I was like I got it now, doctor. And I was like, okay, great, another person who's going to build a practice that you know they love.

Speaker 1:

But you know, in the course of that day, the call I had with the Entrepre business school students, I was speaking with another doctor and she was asking about, you know, some modifications she wanted to make in her business. And you know I started asking questions and the question was to get to one point, which is where I hope you get to as well. This is something I do with everybody I work with. I'm like what do you really want? Okay, guys, come on, we did not get to choose what we wanted per se in high school. If we were going to go to pre-med, you know we had to have certain grades, all those things, in pre-med. To med. We didn't get to choose Residency. We didn't get to choose.

Speaker 1:

But now you get to build a business and a life by design, and so when you do your math, you want to ask yourself is this the life I want? Is this the business I want? The worst thing you can do well, it's not the absolute worst, but one of the worst things you can do is leave a job because you didn't like it, leave a healthcare system because you didn't like it, leave working with someone else because you didn't like it, and then you create your own business, and it's not what you want. This is the time you get to curate what you want. Okay, so I want a really small panel. What you're saying is I want a boutique practice. Okay, great, if you're going to do that and you're going to earn, then you're going to need to charge more. If you're going to need to charge more, then you're going to need to learn how to sell. You're going to need to learn how to position results and all of those things. If you're like man, I want as many people as possible to have access to care that I have a bigger panel, I could afford to charge a little less and all of that. You might say you know, husband, I don't even need to do this, right? I just want to break even, okay, which I'm not a fan of, but right, just figure out what it is you want and make sure that your pricing, your panel size, your revenue, your skill set, development all of that they're all working to build what you truly want.

Speaker 1:

With my private practice, I truly wanted to build a health system that could work without me. I'm so grateful that I did it. And so am I serving pediatric patients? Yes. Am I in the office doing it? No, but is it getting done? Yes. The older I get, the more I'm able to give it language. I love to unlock the potential of humans because I'm like, oh, there's treasure in this one. And so for me to be able to do what I do with EntreeMD I'm not working. I'm like having the time of my life On this podcast. I'm not working. I'm having the time of my life because I know there's so many doctors who are not gonna feel intimidated, not gonna feel confused. They're not gonna go build practices that, by design, can never work. They're gonna build practices that work. They're going to build lives they love. And I'm like whoa, this is amazing. I talk about this.

Speaker 1:

I had a second location for my private practice. I was just like, eh, this is not what I want. Now I want you to think about it. Am I smart enough to do that? Yes, do I have enough of a business acumen to do that? Yes, was it there and profitable? Yes, I didn't want it, so I shut it down, right. So I want you to build something that you love and it really does.

Speaker 1:

Start by setting yourself up to succeed, by actually understanding what you're doing, where you choose a price or you choose a panel size, or you choose revenue or whichever. So go do your homework. I'm rooting for you. Understand that you can thrive as a DPC doc. I've worked with so many. So DPC, cash-based concierge, whatever that is, I've worked with so many, whether you're primary care or specialty care. So many who are thriving. So many who are thriving, okay, and so I'm rooting for you. All right, set the expectation that you will win. Do your math and make sure the math is mathing. And on this episode I want to say pretty pleased, with 72,000 cherries on top. Please share this episode with another doc who has a cash-based practice. If you're a part of a community, share it with them, but let them understand the concept. Remember there's no right or wrong. They get to choose, but at least let them know what they're choosing. Okay, rooted for you always. I'll see you on the next episode of the Entree and Be Podcast.