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Hey folks, welcome back to [00:01:00] the podcast. Today I’m talking about my views on “brief” evaluations and menus of services in our practices. I do not love the idea of offering different services or different types of evaluations in your practice. I’ve held this belief for a while and developed my own reasons for those beliefs. I thought that I might dig into the research and try to figure out if offering different options is a good idea. And if so, why, and if not, why not?
This is a question that comes up a lot during my consulting meetings and coaching groups with folks who want to do, I call it a menu. They offer different types of evaluations, like a brief evaluation only for ADHD, for example, or something like that, or they have a menu where clients can self-select different services to add on to the evaluation.
And like I said, I had some feelings about [00:02:00] this over the years, and today I’m digging into the research. So if you offer different services like this, or you’re thinking about it, this is a good episode for you.
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All right, y’all, let’s talk about this brief evaluation menu approach to testing.
[00:03:00] Okay, everyone. Let’s dive right into it. As I was planning this episode, I was thinking, running a business requires so many skills that we were not taught in graduate school, many of which I’ve talked about on the podcast before, but one of those skills that we often don’t talk about in graduate school or in detail is pricing and consumer preferences for pricing.This is a whole science. There are folks who specialize in this area, do a lot of research in this area, and can be in pretty intricate strategy. And for most of us, myself included, we do what seems like the right idea without really knowing if that is true or not.
How many of you jumped into your practice and set your prices based on what you think might [00:04:00] be a good idea, or what your friend was doing, or what the market will bear in your area, if you can even get a good idea of that? So there’s a whole science behind pricing, consumer preferences and things like that.
“Real” businesses put a lot of time and energy into pricing, and we don’t. It’s not our fault. It’s not like we take courses on how to price our services. If you had any education in graduate school around private practice, you were lucky. And you certainly weren’t talking about setting prices, consumer pricing research and things like that. So that’s what I’m going to try to get into today.
I think like many aspects of running our business, especially in a service industry like mental health, we start from this place of wanting to do the best for our clients and in turn keep people happy, essentially. And so this is often the [00:05:00] motivation toward offering what I’ll call a menu of evaluations options or particularly, a low cost brief option to give people another choice when seeking services, but is this the right approach? Does offering a brief option make sense from a consumer pricing perspective and from a medical decision- making perspective? Let’s dig in.
As we consider this question, I think there are two ways to come at it. And as I dug in, these are the two facets that emerged. I’m sure there might be more, but for the sake of this discussion, I’m going to focus on two areas.
There’s the economic approach, which is what makes the most sense economically while offering a brief evaluation; actually get more people in the door because it’s lower cost service. Does it offer a good option for folks with less disposable income? That kind of thing.
The other angle is from a medical decision making lens. By offering choices in our [00:06:00] evaluations, we’re handing more of the decision making over to clients to choose their own adventure with testing, so to speak. The question is, is this the right approach and does it improve outcomes in some way?
So let’s start with the economics of pricing and consumer behavior. First of all, I’ll tell you what I have thought over the years. And this is just anecdotal evidence that I’ve formed in my mind. Sometimes I do that. I’m sure some of you do that too. We develop feelings about things and then they become somewhat ingrained.
And so my thought on this over the years is that if you’re going to offer a lower cost service line or option in your practice, like a brief evaluation for ADHD only versus a comprehensive evaluation, I’ve always said, you need to make that additional option significantly less expensive or different in price than your primary offering. [00:07:00] Otherwise, it’s going to muddy the waters and people aren’t going to know which one to pick and you’re shooting yourself in the foot.
It’s not going to do any good either way. People are always going to pick the cheaper option. And if you don’t distinguish them effectively, then people are also going to be confused and maybe even not make a choice at all and opt to go with a different practice.
So lots of factors to argue against offering two different types of evaluations. There is some research on this, of course. So in terms of price differentiation, the research suggests that the optimal price gap is 15-25% between similar products that are offering the same thing. And that gap of 15-25% effectively signals differentiation without [00:08:00] alienating or pushing away price sensitive consumers, if that makes sense.
So if you have a bigger gap, like a 30% gap, apparently that will push consumers toward the lower priced option or create some doubt about the value of the premium offering or the higher priced option. So to put this in real terms, if your out-of-pocket fee for comprehensive evaluation is $3,000, then you theoretically would want to set the fee for a brief evaluation around $2250. That would be a 25% gap between the two.
That seems higher than a lot of folks might guess. That’s higher than I would guess but the research would say that if you do a [00:09:00] larger gap, it’s going to push people toward the cheaper offering. And they’re not even going to really consider the premium offering.
As far as feature differentiation, you do have to make it very clear what differences exist between the options. I’ll talk about this in the medical decision making lens as well, but this is where it gets really murky because when we’re talking about a mental health service or a neuropsychological testing service, I might argue that I don’t know if consumers know enough about what we do and what they are getting to even be able to differentiate between features of a brief evaluation or a comprehensive evaluation. Some certainly will, but I don’t know that’s true for all folks. So I [00:10:00] think this is a trickier process when you’re trying to establish a different service line.
What about the consumer preference idea between having a menu? I’m going to switch over, not just from different service lines, but now to talk about the menu approach. This also happens. I’ll see folks who offer a “brief” or basic evaluation and then offer a menu, like if you want academic testing, you can add this. If you want autism testing, you can add that. And it costs this much, that kind of thing. So it’s more of a menu, like an add-on approach.
And so this gets into that discussion of do people prefer a menu or do they prefer a flat fee option? I did an entire episode on flat fee versus hourly pricing. So some of that comes back up here and gets reiterated. [00:11:00] For folks who are convenience driven buyers which I think is true for a lot of people, they often do prefer a flat fee because it’s simpler, it gives more certainty, there’s more transparency in cost.
Comprehensive offerings also have a high perceived value to buyers, so this inclusive pricing makes it appear that the service is a higher value. So this gets into that concept of value-based pricing. It’s just, this is what the service is worth. We’re not negotiating price. We’re not adding or subtracting services. This is just what it is and that’s the value of it. It’s also appealing to folks who want to avoid feeling nickel-and-dimed, so those folks who want to pay one fee and know that they’re what they want.
Those are some of the advantages. I like a flat fee [00:12:00] model. I think the simplicity and the value-based offering makes a lot of sense for folks and it just keeps things more straightforward, but there are people who prefer this menu approach as well. People who like to customize or tailor a product or service to their specific needs often prefer this menu approach. You’ll see this in like software companies, for example.
You can also perhaps gather more customers who are like price sensitive if you’re offering a menu because it gives them the sense that they can pick a cheaper offering and then they’re not paying for stuff they don’t want, essentially.
There’s also an added benefit, with a menu system, you can upsell people. I don’t know that we really upsell because we’re just trying to pick the service that offers them the best healthcare that they can get. It’s not necessarily [00:13:00] upselling like if we’re in a different type of business. So those who prefer a menu are those who want to tailor the product or service to their specific needs and those who are very price sensitive.
You’ll notice there’s a lot of overlap here with the medical decision making model because even bringing up the idea of customers or patients who want to tailor medical or mental health services to their specific needs gets into a philosophical question of how much patients should be choosing their own treatment, how much expertise they may have and what kind of role they may have in choosing their own treatment. So with that, I am going to transition over to the decision making model.
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Alright, let’s get back to the podcast.
So with all of that, let’s summarize and bring it home for a mental health or neuropsychological testing practice. So the flat fee model simplifies decision making, which can be helpful for mental health patients who are already in a place of decision fatigue or [00:16:00] anxiety or whatever it may be. It makes the cost very transparent which helps us from an administrative standpoint. And if we’re generating good faith estimates, if you’re a private pay practice, that kind of thing.
Plus, patients know exactly what they’re going to pay upfront, they can budget for it and plan for it and so forth. It gives the impression of comprehensive care. To me, this is really hard to argue with from a patient standpoint that I don’t know many patients who would not be on board with getting a comprehensive evaluation to investigate all possibilities and make sure that they are getting anything that they might need.
The menu on the other hand, it does let people tailor the service to their specific needs. It gives them a sense of a little more control but it might overwhelm people with too many choices. [00:17:00] It assumes that people understand the difference in each of the menu options. So that is tricky. Generally speaking, people tend to prefer a flat fee model versus a menu.
Let’s talk about shared decision making. This is the other side that I think is important. There’s, like I said, the economic side of this question, which is what actually makes sense from a consumer pricing standpoint and what do people prefer, but then it gets into the idea or the concept of giving people the choice to determine their own medical or mental health interventions in a sense.
And this was illuminating for me. Many of you may have heard of the shared decision making model or [00:18:00] patient-centered care. It’s a growing focus in health care. I’ll be honest, I had to fight some of my biases here where the opinion that I’ve had over the years is that we are the experts. We know what testing is, what it can offer. We have clinical judgment. And we, as clinicians, are the ones who should make the determination about what testing is necessary or appropriate and what the evaluation should look like.
I historically have not liked the idea of handing that back to clients, one, because it places a burden of decision making on them that may feel uncomfortable. So the parallel that I think of is if I personally have had some, let’s just call it heart [00:19:00] issues over the years. I have weird rhythms with my heart. I have arrhythmias that happen when I exercise.
And so going to see a bunch of different cardiologists and heart specialists and that sort of thing, thinking about if they had turned the treatment plan back to me and said what do you think you need or what do you think is going on? Or anything in that realm, that would feel very uncomfortable because I don’t have any kind of expertise in cardiac rhythms or what’s appropriate treatment or what the research says or anything like that.
And so I projected that experience onto the neuropsychology field as well and assumed that a lot of folks come in to seek testing and may have information from the internet, may have some personal experience, of course, it’s valuable, but ultimately we are the ones who should be making the decisions about treatment [00:20:00] and the evaluation approach.
So all that to say that I dug into the research to see what the research says about shared decision making. Does it improve outcomes? Does it increase patient satisfaction and wellbeing and so forth? Like I said, it is a growing movement.
The research shows mixed results. There is some complexity around like balancing autonomy for the patient and expertise and outcomes. And so we’ll talk about some pros and cons. Let’s just say pros of allowing patients to choose their own intervention.
Studies are pretty consistent that patients who actively participate in decision making feel more satisfied with their care. The sense of control often reduces anxiety and it enhances the therapeutic alliance, so to speak, between the patient and the provider.
In many [00:21:00] cases, not necessarily with testing, but in many cases, it also helps with treatment adherence. That makes sense. If you’re engaged in a collaborative process with someone, then when all is said and done, and you make those recommendations for intervention, they’re more likely to adhere to those recommendations, which is great.
It increases autonomy, which is very important. So you do have to be careful in the trade off of effectiveness and efficacy of treatment, but it does increase autonomy certainly. And that’s always a good thing. And then when patients are involved in the decision making, then that can help like tailor intervention to their personal circumstances, and that’s always a positive thing as well.
There are some negatives as well. So the cons of shared decision making are [00:22:00] that patients, and I think this is the biggest one, honestly, patients might base decisions on incomplete or misunderstood or biased information “particularly if their primary sources include non-expert opinions”.
This is where we get into a lot of trouble. There are certainly a lot of folks out there who are coming in pretty informed and they have consulted reputable resources, research and so forth. I would still say though that the majority of folks that come into our outpatient private practice, we do neurodevelopmental evaluations for kids and adults, that the majority of folks are coming in with exactly what this says, incomplete, misunderstood, or biased information from non-expert opinions like social media or anecdotal evidence. And that is [00:23:00] the trap that we get into.
Another negative is decision fatigue. Complex medical decisions can overwhelm people. I think that is especially true in high stakes situations where for us in our practice, a lot of people are pretty stressed out and just want some answers. And so I would consider that high stakes and stressful and that can be counterintuitive for making good shared decisions.
Another downside is that there may be some conflicts with evidence-based practice. I think we’ve all run into this when individuals either want less testing than might be indicated or more testing than might be indicated, essentially like anything that conflicts with our clinical judgment, which hopefully is rooted in best practices. And so sometimes patients want to choose less [00:24:00] effective approaches.
So what do we do with all of this in terms of outcome? Let’s just talk about outcome. Shared decision making tends to result in better outcomes for folks who have chronic conditions where adherence to treatment is really important to stay on track.
Outcomes are also better just for mental health in general. Letting patients choose their intervention like therapy versus medication, for example, enhances engagement and reduces dropout from treatment. So that seems good, but in complex cases, there tend to be neutral or worse outcomes from shared decision making.
When I say complex cases, I mean acute or emergency situations like high pressure, high stakes situations where there might [00:25:00] be trauma involved or a lot of emotionality going on. And this is the place where decision fatigue or that lack of expertise can lead to poor choices from the patient side.
Another place that we run into trouble is when patients have relatively low health literacy. So when they have limited understanding of medical concepts or neuropsychology concepts, they might make suboptimal choices, which can lead to poor outcomes.
So with all that said, what are some of the best practices for balancing autonomy and expertise in shared decision making? The research says that using decision support tools can really help, so visual aids or even calculators to show folks [00:26:00] the probability of certain things happening or not happening to help them make informed decisions.
It requires us to do a little bit of assessment as well on patient’s level of health literacy, their emotional state and understand where they’re at. If they are relatively informed, grounded in research and in a relatively grounded emotional place, then shared decision making is more advantageous but if not, we might need to take the helm a little bit more. We should offer more guidance when patients are unsure or distressed essentially.
How do we pull all of this together? So what I came to from all this research is, going back to the menu versus brief evaluations versus add-on, all [00:27:00] of that, what you can do is come up with a comprehensive evaluation. This is just my reading of how all this might shake out and what might be best, come up with a comprehensive assessment package.
You do a comprehensive assessment that includes all the essential services for a thorough evaluation but then you offer add-ons for non-clinical services. So this keeps the clinical decision making essentially in your hands to decide which testing is appropriate, how much testing is appropriate, which diagnoses might be considered and so on and so forth.
All that goes into your comprehensive evaluation, but then you offer optional add-ons that are not clinical. This might mean expedited report delivery. You might charge an extra $200 to deliver the report within three [00:28:00] days, for example. You could do an additional feedback session for whatever, $200 for another feedback session.
You could do an extra meeting with the school or with a provider or something like that. You can generate additional copies of the report or modified copies of the report for different parties if the patient or the family wanted that to happen.
You could also do an add-on for “curated” referrals to specific services where you’re actually doing some research. A lot of us do this anyway, but where you’re doing pretty targeted research and trying to hook people up with very specific referrals that match exactly what they need.
I like this approach. It seems like a nice hybrid where we still retain a lot of the decision making with the clinical side, but we do offer people the choice to [00:29:00] “up aid” to some of these other aspects of service.
As far as shared decision making and how to incorporate more of that in your process, just making sure that you have a means of capturing the patient’s goals, their concerns, their preferences throughout the evaluation, but particularly at the beginning. This leans on some of those therapeutic assessment ideas where you’re asking the patient what they prefer, what questions they have, what did they want to get out of the evaluation? That’s a great example of shared decision making.
You can have educational materials, which a lot of us do, but just explaining what testing involves, the benefits and limitations, the outcomes, what people can expect to get out of it, different use cases, all of these educational materials are going to be really helpful.
And then while you’re [00:30:00] actually in the intake, you can talk with people about the outcome and the hopes for the evaluation and go through that process together. There’s never too much communication in this kind of situation.
The other part is when you’re doing feedback with folks after the evaluation or as the evaluation is concluding, talking with them about the action plan, the recommendations and having that be a pretty collaborative process to make sure that the recommendations are doable, realistic and feel like they could be helpful.
All of that comes together to say that I still land in a similar place after having looked into all this research, but there are ways to do different service lines [00:31:00] in your practice. You just want to make sure that they are clearly differentiated from a feature standpoint and have about a 25% price difference.
It’s okay to have some shared decision making in the process, you just want to do some assessment and make sure that the individuals are more grounded, confident, health-informed or have high health literacy. Those are some of the factors that are going to increase the likelihood of success.
I appreciate you sticking with me. Even recording the episode feels like a relatively convoluted topic, and we’re weaving in a lot of different ideas but the hope is that it’s coming through loud and clear.
I initially started the title of this episode, as you can see, is why I hate brief evaluations. So I came into this episode with a clear opinion about how this should go [00:32:00] and emerged after looking at the research on consumer pricing preferences and shared medical decision making with a little bit of a different perspective.
I hope that each of those facets of this discussion came through and if you have other thoughts or opinions, I would love to hear the discussion, so shoot me an email or talk about it in the Facebook group on the episodes post. Thank you as always for listening and happy testing.
All right, y’all. Thank you so much for tuning into this episode. Always grateful to have you here. I hope that you take away some information that you can implement in your practice and in your life. Any resources that we mentioned during the episode will be listed in the show notes so make sure to check those out.
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