After 22 years, one practice had patients paying anywhere from $1,500 to $6,900 for identical services: a pricing nightmare nearly every entrepreneurial physician faces.
The complexity wasn’t intentional. It grew from well-meaning decisions to avoid “difficult conversations” about price increases, creating a web of legacy rates that threatened the practice’s sustainability.
During a session of our monthly virtual meetings, which we call the Afternoon Report, Dr. Jordan Lipton of Signature Healthcare and Dr. Radley Griffin of Griffin Concierge Medical shared their hard-won lessons from decades of pricing missteps and breakthroughs. Their experiences reveal why most physicians struggle with pricing psychology and offer a roadmap for creating sustainable pricing strategies.
The Hidden Cost of “Compassionate” Pricing
The most expensive mistake both physicians made wasn’t charging too little initially. It was avoiding regular price increases for years.
Dr. Lipton’s practice started in 2003 with rates between $1,500 and $2,000. Then came five years without any price adjustment. When he finally raised rates, it barely kept pace with inflation.
Three years later, his practice repeated the mistake. Then came seven more years without increases.
“We didn’t learn from our mistakes the first time,” Dr. Lipton admitted.
The pattern is common among entrepreneurial physicians. We start with conservative pricing to build our patient base, then avoid the uncomfortable conversation about increases. Meanwhile, overhead rises, staff salaries grow, and the gap between revenue and expenses widens.
Dr. Griffin’s practice fell into the same trap during the 2008 recession. “We actually ended up lowering our prices since we weren’t getting any customers,” he said.
Consider that every other business your patients interact with raises prices regularly. Their gym memberships, insurance premiums, and country club dues all increase annually. But physicians often treat pricing like a moral issue rather than a business necessity.
The entrepreneurial physicians who build sustainable practices recognize that regular, modest increases prevent the need for dramatic overhauls that shock patients and stress teams.
The Psychology Behind Physician Pricing Fears
The breakthrough for both practices came from understanding patient psychology around pricing and confronting their own limiting beliefs.
“You know, our fears as physicians and our own self value, we need to have people in our lives who basically sort of smack us around a little bit,” Dr. Griffin explained. “We’re not martyrs, by any stretch.”
The luxury car analogy proved effective. Patients don’t resent seeing an expensive car in the parking lot. They feel proud to associate with success. The same psychology applies to healthcare pricing.
Dr. Griffin shared the story of a patient choosing their higher-priced practice since “we must be better, as we’re charging more.”
Another physician on the call mentioned patients who asked, “What’s wrong with you guys? You must not be very good,” when quoted lower prices than competitors.
The pricing psychology exercise that helped Dr. Griffin overcome his fears involved identifying the number that scared him to ask patients to pay, then adding 20% to that figure. That terrifying number became their new rate structure.
Jack Purcell, a financial advisor who worked with early Private Physician Alliance board members, put it bluntly: Most entrepreneurial physicians were charging too little since their patient demographic had significant price elasticity. These successful individuals were willing to pay 25–50% more for quality healthcare without it materially affecting them.
Physician pricing fears often reflect our own mindset, not our patients’ actual willingness to pay for exceptional care.
Two Successful Approaches to Legacy Patient Pricing
When facing years of pricing neglect, practices have two choices: gradual increases over time or comprehensive restructuring.
Dr. Lipton’s practice chose the gradual approach, implementing regular 3–10% annual increases for existing patients and starting new patients at higher rates. This prevents future pricing disparities, but it also means legacy patients may never reach current market rates.
Dr. Griffin’s practice took the dramatic approach: comprehensive repricing to bring everyone to the same level. Griffin’s COO, Kelly Hood, presented multiple scenarios showing they could lose half their patients and still maintain the same revenue and profit.
The “rip the Band-Aid off” strategy resulted in increases ranging from 30% for recent patients to 400% for legacy patients. The practice staggered implementation over two years and lost just 14% of patients (well below their worst-case projections).
Both approaches work, but they require different risk tolerances and market conditions. The gradual approach feels safer but perpetuates complexity. The comprehensive approach creates short-term stress but establishes long-term clarity.
The choice depends on your market dynamics, patient demographics, and your team’s capacity for difficult conversations. Charlotte, North Carolina, with high competition, favored gradual increases. Tampa, with less competition initially, supported dramatic restructuring.
Building Pricing Discipline for the Future
The most valuable lesson from both practices isn’t about the specific rates they charged, but about building systems that prevent future pricing problems.
Both practices now implement regular, predictable increases. Dr. Lipton’s practice raises rates 3–10% annually based on overhead increases. Dr. Griffin’s practice plans 3% annual increases starting in 2026 after their comprehensive reset.
The communication strategy evolved, too. Early attempts to explain and justify increases triggered more pushback than simply implementing them. Patients who value the relationship and service rarely notice modest increases; those who argue about small increases may not be ideal long-term patients, anyway.
Auto-pay systems eliminated much friction. Dr. Lipton’s practice has nearly 90% of patients on automatic billing, with 30-day advance notice. Only about 5% of patients raise concerns, and many don’t even notice annual adjustments.
The psychological shift from viewing pricing as a moral issue to treating it as a business necessity changed both practices. Regular increases became routine rather than traumatic events.
Entrepreneurial physicians who master pricing psychology create practices that can invest in better technology, hire exceptional staff, and deliver consistently superior patient experiences. The alternative, pricing neglect followed by crisis management, threatens everything you’ve built.
Your Next Step
Ready to develop a sustainable pricing strategy with support from peers who’ve navigated these challenges? Private Physicians Alliance members access detailed implementation guides, tested communication templates, and confidential discussions about specific pricing scenarios in their markets. The network also offers all members 1:1 mentoring sessions for specific questions on all topics, including pricing models and business best practices.
Evaluate your current pricing against market rates and overhead growth. If you haven’t raised rates in over a year, you’re likely falling behind. Consider implementing age-based tiers and committing to regular 3% annual increases to maintain pricing discipline.
The physicians who thrive in entrepreneurial medicine aren’t the ones who started with perfect pricing. They’re the ones who learned to price confidently for the value they deliver.