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President's Message
Lessons from the Organic Carrot

Sandra Haber, Ph.D.

I am honored to be President of the Division of Independent Practice for 1998. My goal for the year is straightforward-- to increase the number of fee-for-service patients by 10% for every member of the division. I can accomplish this. You can accomplish this. We can accomplish this by working together.

Like any good business, increasing sales requires a product of excellence, a sound marketing plan, and the investment of a great deal of energy and resources. My four presidential columns will run as a series addressing various aspects of self marketing. I will not be dealing with Managed Care issues. Rather, I will assume that members participate in managed care to varying extents determined by personal necessity and geographic penetration, rather than by choice. "Do what you need to do." That being said, I will dedicate my energies to increasing the number of self pay clients. I hope that you will join me in that goal.

I believe that in most communities, there are a number of clients willing to pay out of pocket for psychological services. The actual numbers will vary according to the economc level of the community, but in most cases, independent practitioners will be able to offer a series of services that fall outside of the usual health care network and that consumers perceive as valuable. My belief has been fueled by the data collected by Dr. David Eisenberg, who has investigated the use of alternative medicine in this country and spearheaded the first Alternative Medicine conference presented under the auspices of Harvard Medical School in 1995. His research noted that the 425 million visits to providers of alternative therapy in 1990 exceeded the 338 million visits to primary care physicians during that same period. Alternative medicine is a 10.3 billion dollar a year industry which is mostly paid out of pocket.

This data clearly indicates that it is a fallacy to assume that the public cannot afford non-reimbursed health care services. Perhaps we need to look at consumers through a different lens. In the area you serve, do potential clients utilize the services of manicurists, masseuses or yoga instructors? Do clients have tutors for their children? What kind of cars do they purchase? Are neighborhood restaurants frequently patronized? Is there a local health club? Do the ice cream shops feature "premium" ice cream? How do movie theaters and concert sales fare? Are there successful plastic surgeons in town? How popular is cosmetic dentistry?

Certainly, there are many working people that simply do not have the discretionary income for any of the above extras; with respect to psychology, any independent services that are purchased may need to be in the form of a group, a reduced fee, or a focused, short term treatment. However, it is also true that there exists in many communities a substantial number of middle and upper class individuals who do have discretionary income. These potential clients are able and willing to purchase services.

Now let me add another piece of data--this time of an experiential nature. This is a true story about money and decision making that contributed to my thoughts on the marketing of psychological services. It is the story of the organic carrot.

Several years ago, I was walking down the main street of my neighborhood. I noted that the health food store was expanding for the third time in the past decade. I entered the store and noted that carrots cost 99 cents a pound. I then left the store and on the very next block came to the neighborhood supermarket where I found carrots that cost 39 cents a pound.

Both the health food store and the supermarket were doing well --each had its devoted customers-- yet the health food store was selling foods for almost three times as much. When one considers a basketful of produce, this becomes a significant difference in expenditure. I wondered, 'what makes people willing to pay more for seemingly similar products?'

The answer of course is that the health food store sells organic fruits and vegetables while the supermarket sells ordinary (aka pesticide sprayed) products. Both items look the same. For many people, both items taste the same. But the customers in the health food store believe that the organic foods are healthier and are therefore willing to pay three times as much. It is an extension of the belief that you get what you pay for.

Customers who buy organic foods believe they are getting a better product. The organic vegetables may indeed be superior, but in fact, the evidence is mostly that of face validity. The organic produce has successfully differentiated itself from supermarket produce.

We can learn from this that there are consumers for each type of product. For some, price is the key variable. For others, it is the quality of the product that determines the purchase. And in the latter group, we learn that people will pay for higher priced products and services as long as they can differentiate the higher priced item as being of superior value.

The same principles underlie the marketing of independent psychological services. The problem does not solely rest with the consumer's ability to pay. A good part of the problem rests in our failure to differentiate ourselves and our product as superior and worth paying for. Have we made it clear to the public that independently practicing psychologists are able to address issues that are untouched by traditional health care? Have we made it clear that independently practicing psychologists deliver their services while maintaining patient confidentiality? Have we made it clear that independently practicing psychologists are free to determine and deliver the optimum course of treatment unhampered by conflicts of interest from unseen third parties?

The conclusion is obvious. Let us all resolve that during 1998, we will address these problems and differentiate our product to a substantial portion of the public who stand ready, willing and able to pay for psychological services.

Think organic carrots!


Jeff McKee
Thursday, May 07, 1998