1. TODAY’S PRACTICE
Marketing Mishaps
The Buck Stops Here
It’s time for a change of attitude toward financing.
BY SHAREEF MAHDAVI
N
ot another discussion about money! Yes, it’s priced at monthly payments of $19.95. What those industry
time to delve into one of those sore subjects for segments recognize is that major consumer purchases are
most refractive surgeons: patient financing. For driven by how they fit into a monthly income stream.
those having an allergic reaction to the mention National statistics show that only one in every four adult
of this topic, please overcome your personal discomfort and Americans can afford to pay cash for an item costing $500
read on. or more. Long gone are the days when people actually saved
I suspect that doctors, just like most people, feel awkward money for something they wanted to own. Credit cards
asking for money. That is OK as long as someone besides provided by banks and department stores have narrowed
their patient is paying most or all of the bill. In other words, the gap between “want it” and “have it” by allowing con-
when insurance, Medicare, or the vision plan pays, the awk- sumers to own something now and pay for it later. For bet-
wardness is largely avoided. ter or worse, this is reality for today’s mainstream consumer.
However, refractive and other elective procedures Why most providers of elective
play by a different set of rules. Ignoring these medical procedures haven’t
rules of payment has proven capitalized on this trend is
extremely costly to refractive a true mystery. In a pri-
surgeons (many of whom vate survey conducted in
reacted swiftly to the the year 2000, fewer than
historic “invasion of the 10% of over 200 laser
discounters” by lower- centers contacted could
ing or matching prices give a reasonable-sound-
to “meet the competi- ing answer to the ques-
tion”). Lower prices led to tions “How much do you
lower—not higher—procedural vol- charge?” and “Do you offer any type
umes, as shown by Market Scope data that tracks of financing?” This survey included laser owners of all
average LASIK prices and the total number of procedures varieties and volume levels. The stumbling and fumbling to
nationwide. The subsequent meltdown of most discounters answer this question makes it pretty clear that the lack of
has helped stabilize pricing for LASIK in many markets. comfort with price directly affects how centers’ staffs discuss
price and presents financing with patients. Typically, the
HAVE WE LE ARNED? whole discussion of price is delayed until the end of the pro-
The lesson from the low-price invasion is fundamental. cedure. When the topic emerges, it’s presented with a
Price (ie, “it’s too expensive”) was not the problem that defensive, apologetic tone. Financing, meanwhile, is held ‘til
needed to be addressed. Fear was, is, and will for many years very last and made available only if the patient really needs it.
be the main deterrent to LASIK acceptance. Only when fear
is conquered does the subject of price even matter. The THE DEEPER I SSUE
emphasis, however, should be affordability, rather than the Although many people (including those whose job it is
price of the procedure. to promote LASIK) are noticeably uncomfortable with the
Just look at other consumer purchases. Rarely is a new car issue of price, it takes deeper digging to get to the root of
promoted by its price or a home bought for cash. Such the problem with financing. I believe this has much more
expensive items are pegged to a monthly payment. Even less to do with attitudes and beliefs about those who need
costly items, such as consumer electronics and home appli- financing. The fact is that the majority of refractive surgery
ances, are increasingly promoted via “easy monthly pay- candidates can’t pay for LASIK out-of-pocket. Providers,
ments as low as…” It seems like every infomercial product is however, act as if financing is for the downtrodden, and
JUNE 2002 I CATARACT & REFRACTIVE SURGERY TODAY I 83

2. TODAY’S PRACTICE
often promote it as a last resort to help those who are des- ingness to pay). Although initial questions about price are
perate and have “bad credit.” This thinking is out of touch usually a smokescreen for fear, the discussion of price should
with reality: the latest monthly survey results by the come early, with confidence, and with an understanding
Cambridge Consumer Credit Index indicate that only one that the patient isn’t really challenging your price; he or she
in eight Americans with outstanding credit card balances just doesn’t know what else to ask.
can afford to pay more than half of that balance.
Part of the value of what you offer, which must exceed SELL IT BY THE MONTH
the clinical results of the procedure, is making LASIK afford- With financing, you aren’t stuck selling a $4,000 elective
able to your patients. Sorry, but just having the credit appli- procedure. You’re selling the ability to improve vision for
cation form in your cluttered literature package is not good under $100 a month. Whether patients finance, pay cash,
enough. For those prospects who have overcome the fear of or use a credit card (which charges you 1 to 3% for the
undergoing LASIK, you must make it easy and convenient privilege), you want to make it as easy as possible. Those
for them to also sign up for the financial commitment. Here early patients with cash in hand are a disappearing breed.
are three common mistakes that keep providers from doing Unfortunately, all the tips and advice on financing are
a much better job with patient financing: meaningless without the right attitude from the provider.
It begins with a basic approach that says, “We will make
Self-Service financing an integral part of our offering with every patient
If you make patients do all the work to obtain financing we see.” The process continues with an audit to see how
(presumably because it’s a hassle for your staff), then you’ve every interaction with LASIK candidates either conforms
missed a great opportunity to demonstrate the value to or detracts from living that attitude.
behind the fees you charge. As a starting point, one way to change the attitude
would be to invest in significant staff training about your
“What a R ip-O ff!” price, developing competence in what you say, and
If you begrudge the fees charged by banks and financing becoming confident in how you answer every question
companies, then you miss the point of why these compa- that asks (and often challenges) why you charge the
nies matter. They sell access to money that your patients amount you do. It’s human nature and instinctive buying
won’t have otherwise. In exchange for taking the risk of not behavior to ask this question. Instead of responding
being paid, they get a cut of your fee. Although it ranges defensively, you can learn ways to turn that inquiry into a
from 3 to 10%, this is far less than the 25 to 75% fee cut self- meaningful dialogue about your offering and the
administered by those doctors who lowered their prices to patient’s needs.
compete during the invasion of the discounters. For most of Data from finance companies indicate that a well-run
them, their volumes didn’t increase to justify the reduction financing program can boost patient volume by 10 to
in profit on a per-case basis. The discount paid to the lender 20%. I think this is conservative, especially in a practice or
is a far less expensive marketing tactic than playing the low- center where financing is used as a core tool to increase
price game. affordability. New patients will be increasingly attracted to
the LASIK providers that finally understand how products
Playin g Banker and services are purchased: by the month.
Finally, if you think that operating your own “in-house” The tools can vary, from offers of zero-interest payment
financing is a good idea, you’ve got too much time on your schedules to bundled lines of credit that allow for multiple
hands. Ask any of your colleagues who have been burned elective procedures to go on the same account. I can prom-
by nonpayment, and you’ll quickly realize why this task is ise that, if you take a different look at patient financing pro-
better left to professionals who specialize in this area. grams, your prospective patients will also take a new look
at what you have to offer. In today’s climate, generating
CHANGE THE G A ME renewed interest is key to growth in procedural volume. ■
Now for a radical idea: Consistently using patient financ-
ing actually may allow you to raise your fees for LASIK. The Each month, industry veteran Shareef Mahdavi looks at a
emphasis must be placed on the affordability, not price, of different topic relating to the business of refractive surgery,
the procedure. Your phone-based staff can’t just take the exploring how mistakes from the past can be used by all
bait when asked, “How much do you charge?” They need to providers for effective marketing. He was formerly the head
convey the value of your offering. The price discussion of marketing for VISX and is based in Pleasanton, California.
should include an upfront presentation of all options Mr. Mahdavi may be reached at (925) 425-9963;
(rather than an assumption about the caller’s ability or will- shareef@sm2consulting.com
84 I CATARACT & REFRACTIVE SURGERY TODAY I JUNE 2002