Matthew Gallogly argues doctors pricing PRP and other procedures by copying competitors or averaging surveys are doing it wrong. Healthcare isn't price-sensitive retail, so the real move is value-based pricing tied to your ideal patient, which often means charging multiples more than the market average.
How did you come up with your pricing? Going out and checking and see what your competition is charging is actually the worst way to figure out what to charge for your medical services. Why? Well, it doesn't matter what your competition is charging. We're not in a price-sensitive industry. So here's another way that people come up with pricing. There are a couple of ways that doctors come up with pricing. The first is they ask their friends. So I get this a lot in the regenerative space, and they go, well, how did you come up with your pricing? And this happens, by the way, in functional too, and it happens in, it happens in all. So it's not just, this is not just in the regenerative space. I should clarify that. And so what they say is they go, well, I was at an event, and I was hanging out at the bar, or I was talking to some of my friends, and we're asking, I was asking them what do they charge. And like in the case of regenerative, he goes, you know, some guys are charging $950 for PRP. Some, some folks are charging $650. So I just kind of put in the middle, I decided to come up and charge $790. That just felt like a good place to be. To which my answer is, I wanna make sure I get this right. You asked a bunch of dead broke doctors who know nothing about business and nothing about pricing and who can barely make payroll what you should charge for your services. And they kind of look at me and they go, oh, I see your point. Going out and checking and see what your competition is charging is actually the worst way to figure out what to charge for your medical services. Why? Well, it doesn't matter what your competition is charging. We're not in a price-sensitive industry. That's a business term. It's not like we're Walmart. Nobody wants discounted healthcare, right? So here's another way that people come up with pricing. Hey, I'm Matthew Gallogly, and I'm a Maverick. Well, what is a Maverick? A Maverick goes against the grain. We find our own way. And if you're sick and tired of being pushed around by the insurance companies, come join us. We'll show you the way out. And you'll love medicine again. A recent study said that the average price for a PRP procedure nationwide was $1,100. So then people want to point to that. See, Matt, the average price for doing a regenerative PRP injection is $1,100. So you're being greedy by telling doctors to charge $2,500. Here's the problem with that study. The study is inherently flawed. Now, if you really think about what goes on in medical studies, you have to start with a very basic premise, right? We're basically trying to figure out, prove or disprove something, or figure out the answer to something, right? That's the big— any study starts with this concept of, okay, we want to study the impact of X, Y, and Z on the outcome for whatever. Okay, and so what you do is you take a look at this and you do it. You have a couple of different variables that you're going to test. You could test a cell count of this, cell count of that. You could test, you know, the type of injection. You could test a bunch of different things. You can test the health of the patient. There's a bunch of different factors that you can test, and you have these control groups. And what you do is you then have to track the results over time in order to get a scientific result. Well, the problem with this study that says Well, you know, they, they did a survey around the country and they said the average price is $1,100. Here's why the study is inherently flawed. Imagine if you asked a group of people on public— let's say we wanted to find out what does it take to become a billionaire? Okay? And let's say we wanted to find out what it would take to become a billionaire for people that grew up on public assistance. Okay? Well, if we went out and we asked a bunch of people, who were on public assistance and were still on public assistance and had never been a billionaire, and we asked them what it took to become a billionaire or become a multimillionaire, their answers would be flawed because they didn't have the result, right? They didn't know what it took. If I went to a group of people that grew up on public assistance and they had become multimillionaires, and we asked them what it took to become a multimillionaire and to get off public assistance, then guess what? We would get really good data. Well, the problem is the people that we were asking this question of about what's the average of what you charge, they're the people in that study that are in public assistance that aren't multimillionaires. They don't know what their market can really stand. You're starting with a flawed concept. You're asking doctors that know nothing about business. Let's assume they know nothing about business because they don't get any training on business. Maybe some of that group knew more. Maybe some knew less, but they don't really know. All right? They never factored in the equations for their business skills, their medical training. There was nothing revealed as to whom the doctors were offering the services to. Okay? Because what you can sell your services to the right type of customer, the perfect type of customer, is going to be dramatically more, probably 8, 5 to 10x more than what if you were selling it to somebody who was not your perfect customer. So all of these things factor into the equation.
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