The following is a mentoring article for health practitioners.
There have been some interesting discussions in mentoring sessions lately about the economy and its impact on even well-established practitioners.
One of the first signs that people are spending less, has started to trend. Have you noticed more of your regular clients rescheduling, extending the time between follow ups? There might also be an increase in request for medicine repeats.
Why we need boundaries around repeat prescriptions
It’s timely to review your policy around repeats outside of consultations. I base mine on both TGA guidelines and best practice: no repeat prescriptions when more than three months since the last consultation.
Does the client still need the remedies? What’s changed? If there’s been no improvement, is the prescription working? Have any other comorbidities arisen? Are they taking any new prescribed OTC or POP remedies since their last review? For example, one naturopath found their client had begun taking more than 300mg of B6 a day on top of her rolling prescription for a multivitamin.
Do you charge for a repeat? When I had a bricks and mortar clinic, I always added a dispensing fee on herbs. Ten years ago that was $15. Where a client needed a mini phone consult to adjust the prescription, there might be an additional charge on top. Why? Because your time is money. How long does it take to call or email, review, dispense, take payment and arrange collection?
Prepaid repeat: If you work solo and spend time following up payments, only dispense when the client has paid for the remedies, or are collecting items at a pre-arranged time where it’s agreed that they’ll pay on collection.
Using an online dispensary: In some circumstance I’ll pre-approve a repeat (for example, if I’m going on an extended break). Using Ariya, it’s as simple as adding one repeat to the order and making sure to add the prescription expiry date so that it is within three months. As this takes seconds to implement, I don’t charge. I’m not dispensing the remedies, the payment is made directly to the company and the usual rebate applies to the sale.
Keep up with supplier price increases
The end of financial year is almost here, so it is important to review all your fees and costs. When was the last time you increased your fees?
If you have your own dispensary, take into account any supplier price increases. Integria, for example, usually schedules an increase 1 July. Not only place your orders now before the rise but remember to adjust your herb and supplement prices for the new financial year.
I frequently see practitioners skip this fundamental business practice, resulting in lost profit by absorbing multiple price increases. If there’s been more than a year since you reviewed this, especially with fixed price herbals, do this now.
Standard mark-up (profit) varies between 30 and 60%. On average it’s 40% on top of the cost of the herbs (priced individually per herb/ml) plus bottle plus label and dispensing cup etc. If you’re working online, postage and packaging is an additional cost.
Where you’re charging a standard price per size of bottle and haven’t revisited pricing for a couple of years, you may now have a minimal mark up on some prescriptions or worse selling some at a loss. Herb prices have sky rocketed and I’ve seen busy practitioners loose thousands of dollars of potential income a month!
Don’t get me started on the trend of a “200 ml” (etc) prescription, squeezing an extra 10+ mls into the bottle (and at a standard 200 ml price)! How much do the free 10 – 20 mls you’ve given away, cost you in a year?
Consider signing up with an external dispensary to compare their cost to the client for a handful of recent prescriptions when priced per ml/herb plus standard retail mark up. How does yours compare? Are you under of over charging?
I hope you’ve found these tips useful. Reviewing your pricing can be confronting, but it doesn’t help your clients if you go out of business.
If money is on your mind, check out these tips to financially futureproof your business.
Gill Stannard has run a successful naturopathic practice since graduating from the Southern School of Natural Therapies in 1991. She mentors health professionals in business and patient management. If you’re a practitioner, sign up for the free mentoring newsletter and explore the online mentoring resources.