May 2002

Bob Levoy’s success file
Trend Alert: ‘Haggling’ Likely to Increase
By John McGill, MBA, CPA, JD

Haggling With Health-Care Providers About Their Prices Likely To Increase Sharply As Out-Of-Pocket Costs Rise” is the headline of a recent report from Harris Interactive, a worldwide market research and consulting firm.

The March 6 report indicates that as health-care costs have risen, a sizable minority of the public has been talking to health-care providers to try to negotiate lower bills. For example, 17% have talked to a pharmacist in the last 12 months about paying a lower price; 13% have done the same with physicians; 12% with dentists; and 10% with hospitals.

How successful were they? “Approximately half of those who tried to negotiate a lower price, report they did so successfully,” the report stated. It also said: “Our new data strongly suggest that rising out-of-pocket costs are likely to result in much more consumer negotiation over health-care bills and prices over the next few years.”

Along similar lines, an article entitled, “Medical Care: Can We Talk Price?” appeared in the Feb. 2 edition of the Wall Street Journal. “In small but growing numbers,” the WSJ reported, “Americans are taking an innovative approach to controlling health-care costs: They’re haggling with their doctors.”

What’s the best way to deal with attempts at haggling if they occur in your practice?

The doctors I’ve talked to advise: “Be firm. Don’t give in.” Giving in to haggling devalues your services, and it devalues you.

Some patients who haggle about fees are just “testing the waters.” They’ve heard these stories and think to themselves, “What have I got to lose?” The danger of giving in: If word gets around that you’ll reduce fees if asked, it will surely increase the number of times you’re asked to do so. And the more times you say yes, the more of a dent it will make in your profitability.

Important exceptions: Hardship cases may warrant special consideration. Reducing or perhaps waiving your fees for such patients is both appropriate and commendable.

Mr. Levoy, a management consultant based in Roslyn, N.Y., has conducted more than 2,500 seminars for health-care professionals. Those seminars have included programs for the American and Canadian chiropractic associations and numerous state and provincial chiropractic associations.