Accepting health insurance as an in-network provider isn’t for everyone, whether that be based on a personal business decision or due to closed insurance networks in your area. In this session, we’ll go over a few different business strategies for determining your private pay rate for nutrition counseling and other strategies for out-of-pocket services.
The most common problem that most dietitians face is understanding what your private pay rate for nutrition counseling should be. It is a fine art between getting paid a fair market rate while finding the rate at which the consumer market will bear. You don’t want to undervalue yourself, but you also want to be realistic with what the consumer may be willing to pay.
1. Setting a baseline
The first step is to start researching what other private practice RDs in cities similar to yours are charging out-of-pocket. Ask your contacts, or go on their websites for their listed prices. You will start getting a better idea about the price range that you may begin to consider.
Even though you are not going through health insurance, we recommend using the Medicare Fee Schedule Rates as a way to objectively assess what the going average market rate is for your profession in your area. The Medicare fee schedule is calculated based on a relative average fee and gives you a starting baseline of understanding what your going contracted rate is for health plans.
Once you establish what the average or baseline range for dietitians is, that is your starting point where you can begin testing out your rates and seeing whether people are willing to pay it. A few reminders:
- Do not be afraid to charge what you are worth, but also be realistic about what people are willing to pay based on your experience and marketing reach.
- If you are just starting out, you may want to consider lowering your rate by 15-20%, until you can get a few testimonials in.
- Make sure the discounted clients understand that these are special promotional rates so they can understand its true value.
- In addition to single session rates, consider providing packages of bundled sessions. You can consider marketing these packages as a defined program, and you can set your client's expectations that you will guide them through a specific goal, with the allotted number of sessions or time frame. This helps put a short-term, attainable goal in context for the client because they know what they are trying to achieve with the package they are paying for.
2. When to start increasing the price
As you start building more word-of-mouth referrals, beginning to see a steady influx of clients for 6-12 months, or seeing more inquiries due to increasing popularity through different digital, press, and social media channels, you can consider raising your introductory rates.
However, be careful to not raise it too suddenly! Having 10K followers on Instagram won’t necessarily mean they will pay your higher rates. Here are a few things to consider:
- Do it through small increments of 10-15%, and see if that changes the amount of business or inquiries that you are receiving. This will help you make sure that people are WILLING to pay those rates, even as they increase.
- Increasing your price can also be a strategy when there are too many requests for you to handle, so you can decrease your session volume and work only with quality clients who are willing to make the higher investment in you.
3. Other ways to monetize through private pay clients
People love to have items to hold or events to experience. By keeping this in mind, prospective clients may likely value your advice even more when it’s provided in the context of something that is seemingly more tangible. In addition to counseling sessions, you can also consider offering the following private pay packages:
- Cooking classes - Experiential learning and direct application of how your client will live through your advice.
- Kitchen makeovers - Help them restock their kitchen with the essentials so they don’t have to think about it. Make sure you include the cost of restocking within your price, and you can bundle your counseling rate within it.
- Grocery tours - Take them to a grocery store and guide them through the shopping experience. Teaching them how to read labels as you go, and again, like the kitchen makeover, make sure you include the cost of their groceries within your pricing so you can bundle your rate. That does mean that you have to price out what you will buy at the store ahead of time, and have a general budget for the groceries.
Make sure there is purpose for each of these packages and a value-add that they understand is included. They need to understand what they are learning from this experience, how they will gain value from it, and why they need you to help them.
Simply telling them, I will tell you ‘how to shop’ is not really a value, but telling them ‘how to shop so they will feel more confident and knowledgeable in creating healthier budget meals for their whole family’ is definitely more valuable!
Having more tangible items that they can take away from the experience will also add value to those packages, so be sure to highlight that. For example, describing your grocery tour that comes with "$100 value of premium grocery items for one week to create 7 days of breakfast, lunch, and dinner’ is much more tangible to your customer than simply saying “Grocery Tour”.