Price Transparency in Plastic Surgery

Jonathan Kaplan

There's just so many other bad things that can happen if you just try to think that, oh, I'm just going to get them in the door even if they, you know, if they don't know the price, and then they will lower the boom on them 45 minutes into this potentially free consultation after they've, you know, exposed their deepest darkest secrets, undressed, and then tell them the price. I mean, it's nonsense.

Max Baybak

Hello everyone, welcome back to Next Level Practices. This is the podcast where, if you've been listening, you know we talk to founders and CEOs of companies that have products and services that can help you market your aesthetic practice and, as the name states, take it to the next level. So today I have a guest who has a really fascinating product and platform. I've been wanting to do this interview for a while, very excited about it. My guest today is Jonathan Kaplan. He's a board-certified plastic surgeon based in San Francisco, and he's also the CEO and founder of BuildMyHealth, which is a price transparency or a price — tell me again, Jonathan, how do we — what do we call it? A price transparency platform?

Jonathan Kaplan

Price transparency platform, price estimator platform, lead generator — that's — where does it go?

Max Baybak

That's what I was — well, we're going to get into how it can be all those things, and that's what I'm really excited about. We do have, as you know, some of our clients use it, and I've got to get my hands on it, and I want people to understand, because I really see that it can be so much more than a price estimate estimator — but that's the word I was looking for, price estimator platform. So Jonathan, thank you so much for joining us on the show, really excited to have you for this conversation.

Jonathan Kaplan

My pleasure, thanks for having me.

Max Baybak

Yeah, yeah, thank you for taking time. I know you just came out of the OR, is that right?

Jonathan Kaplan

That is correct. We had a breast aug lift and lower eyelid lift on the same patient.

Max Baybak

So I think this is really cool. When I said I was excited about having you on the show, I really mean that. And I think that one of the things that's really unique about your product — and anytime you have a product where the founder really is the user — and in the technology startup world, and you know, you're from San Francisco, or you're in San Francisco, so you know, in the Silicon Valley world they call that founder-market fit, and I'm a big, big believer in that. And in the time that I did spend in startups — that you can have someone who has a great idea and lots of money to throw at it, but they are just lacking and missing the nuances of it, or they don't have the story behind why they started — that product really didn't come out of true need.

We can always build a really fancy story after we create a product and say, oh, it was because I saw this, you know, need. But if it was — we can always write that narrative after the fact when we create a product or a company or a platform or a service. But when it's truly born out of real need by someone who's practicing in that space, or in business in that space, those are always the best. So I want you to — I would love it if you would tell myself and our listeners a little bit about the story, a little bit about yourself in general, and kind of how you came to — what the story is behind starting BuildMyHealth.

Jonathan Kaplan

Happy to. So I am the youngest of seven kids from Alexandria, Louisiana. My dad was a general surgeon, my mom graduated in business and then went back to nursing school, so I grew up in a medical family. And wanted to be a doctor like some of my other siblings, and went to, you know, college undergrad in Texas, came back to Louisiana for medical school, and then did my plastic surgery training up at Cleveland Clinic, and then headed back to Louisiana for my first job.

And I finished my fellowship in 2007. 2005, Hurricane Katrina hit New Orleans, so it was the biggest natural disaster to hit the US. 80 percent of the city was flooded. A big portion of the population in New Orleans shifted to Baton Rouge. So when I was coming out of training two years after Katrina, there was a job opportunity in Baton Rouge because the city had been overwhelmed by so many new residents there. The training programs in New Orleans had shut down temporarily, so they were sending more of the residents or fellows to Baton Rouge to train. So one day I'm finishing my plastic surgery fellowship, the next day I'm the program coordinator for the plastic surgery fellowship for LSU and Tulane in Baton Rouge, because they had shifted them from New Orleans to Baton Rouge. And so I was employed by a hospital — that was my first job, Our Lady of the Lake, really big, nice private hospital that's now got a huge graduate medical education program.

And so I was there for a total of six years. But anyway, about a year, two into it, I started noticing, just like any cash-pay practice, that patients are always calling asking about pricing, and so that's kind of what started the idea behind building this platform. So as I was employed by the hospital, my ideas were the hospital's, contractually. And so I had this idea — you know, patients are always calling asking about pricing, and you know, doctors typically handle, or the front office staff handles it, one of two ways: either they say you've got to come in for a consultation before we can give you pricing, which just aggravates the consumer, and then the other option is to go over through all of the pricing on the phone, and it takes several minutes, and then the patient just says, all right, thanks, and they hang up, and you don't have any idea who they are — you don't get a lead out of it.

So that was the original — that was the impetus for the idea that I had. And the idea was that by the time patients come in for a consultation, the office manager, the practice care coordinator or patient care coordinator goes over the pricing with them, because they have a fee schedule. They all do — we all have a fee schedule that's on paper or in Excel. So I said, well, why don't we digitize that and then put it on the website, but not just as a static list of pricing, because you might not get a patient's contact information out of that. And also, if you just list a whole menu of prices, it's pretty overwhelming. It'd be like going to the car dealership and saying, I'd like to know the price of this car, and instead of giving you the price of that car, they just give you the whole catalog of all their cars and all their makes and models and all the things that you can have. It's overwhelming.

So I said, let's digitize that, put it on the front end, but put it behind a curtain, so that the patient doesn't see the price for that particular procedure until they put in their contact information. And so that's how we developed it, as an app first, an Apple iPhone app. But I should step back — before we actually developed it, I brought the idea to the hospital and said, hey, I have this idea. This is back in 2009 at this point. And I said to the hospital, like, hey, I have this idea of price transparency where people can check pricing for the cosmetic procedures I perform.

So fast forward to 2021: Trump-era price transparency rules required that all hospitals in 2021 put all their prices on their website through a price estimator, and the hospitals sued to not have to do that. So you can imagine how the hospitals didn't want to show their pricing in 2021 — you can imagine how uninterested they were back in 2009. So it took a couple years before they agreed to do it, to let me do it, because they weren't interested in doing it. I said, well, can I have the intellectual property rights to it? And so they signed over the intellectual property with this idea to me in my next contract, and so we went live in 2011 as an iPhone app. And I'll stop there.

Max Baybak

Thank you for all that background. I was just going to say it's kind of a good — kind of a boon for you that they were uninterested — you're able to take that IP with you.

Jonathan Kaplan

Thank God I got it all in — I got a signature. I have to have the documents signed, showing that if anybody comes knocking, I've got proof that it's mine now.

Max Baybak

Smart, very smart. Yeah, thank you very much for that background. And I have been able to interface a little bit with the platform due to that — like, we have some overlap in our clientele, as I mentioned. I have a lot of questions for you about it and kind of the thought process behind it. But will you, just for anyone who hasn't seen it — and I know they're out in podcast land and can't be able to visually see — but give us a description of what that looks like, interface-wise and user-experience-wise, today. You kind of did, but maybe, what does that look like? You mentioned it started as an app, and it exists now on websites, right? So tell us a little bit more about that experience.

Jonathan Kaplan

We've moved away from the iPhone apps to where it then became a standalone website, buildmybod.com — we've changed our name to BuildMyHealth, but it was a standalone website where you could go and you could find doctors near you. And now we've shifted, in addition to having that website — now we've shifted to where there's a price estimator embedded into the doctor's website and also a chatbot embedded into the doctor's website. So whether it's a price estimator or a chatbot, the idea is that you can go check pricing, and after putting in your contact information, you get an email breakdown of the pricing.

So if you're on the price estimator, the first thing you'll see on the doctor's website is a "get a quote now" button. You click on that button, brings you to the pricing page where the embedded price estimator is. Then you can — if you're looking at insurance-based pricing, you can choose your insurance plan; if it's cash-based pricing, you can choose the category, like breast or injectables, and then it brings you to a page where it lists all of those procedures. And you can just click on the plus sign, adding those different things to your wish list, is what we call it. And then after you've built your wish list, you still don't see pricing. You are then requested either to do Google single sign-on or create your own account, putting your name, you know, email address, other demographics, and then after you click submit, once we've verified your email, you get the pricing breakdown on the screen.

So it's not just price transparency of, like, a tummy tuck, it's 12 grand or whatever. It says tummy tuck, but then it breaks it down into the OR fees, anesthesia fees, doctor's fee, garments and things like that. We don't want it to be a black box — we want it to be true price transparency, where people see the line items of what you're interested in. So the consumer sees that breakdown, and it automatically triggers an email that goes to the consumer and also to the doctor's front office staff. So the patient sees a breakdown of the pricing and sees the doctor's email, or the office staff's email address and phone number, and then the office staff gets the same email with the patient's name, email address, phone number, the procedures they're interested in, a breakdown of pricing. And then they can communicate — you can follow up with the patient, and you encourage them to come in for a consultation at that point. You know, if they decide to come in for a consultation, you've gotten rid of the sticker shock, and your consultation is less likely to be futile or a waste of time.

Because we found that patients who came in knowing pricing through our platform, that they were 41 percent more likely to book a consultation once they came in, because they knew the price. You know, because — I mean, one of the experiences I had was that patients would come in for liposuction, before the price estimator, and we gave them the price, and they're like, oh, I thought it was gonna be like three hundred dollars. It's like, there is nothing I do that's three hundred dollars, certainly that's surgical. So I know other people are out there, and they see this — other practitioners are out there, and they waste time on these consultations. So now we're just making sure the patient has a good idea of what it cost, and you get a lead in return, and we can sync that into your email marketing database, so that you're just passively building that email database, which I know we'll talk about a little bit more.

But the main thing is, you know, doctors are worried that patients will see that, and they'll say it's a race to the bottom, that they'll, you know, they'll be looking for the least expensive price. But the thing is, nobody knows how much it costs until they put in their contact information — by then you've already captured that, and it's way more efficient than dealing with those phone calls people asked who are just tire kickers. You're allowing them to do that automatically through the price estimator or the chatbot. And for insurance-based services, they can put in their member ID number from their insurance card, and they can actually see what their responsibility is. You know, if they've already paid some towards their deductible, their out-of-pocket maximum, their co-insurance, they can actually see not only what the total cost is but what their responsibility is.

And I know that's getting out into the weeds with the insurance-based patients, because maybe not a lot of listeners are doing that, but there are some plastic surgeons out there that are doing both reconstruction and cosmetic. So you can allow these patients to see that they will owe some money — even though they have insurance, that they are still going to have to pay something out of pocket — before they even come in for the consultation.

Max Baybak

Yeah, there's absolutely overlap in our clientele and our listener base here with insurance, but it is largely aesthetics, which means largely cash pay. But obviously you as a plastic surgeon understand what those overlaps are, and so that's also fascinating — you have that entire insurance component where they can put in their own information and get a personalized quote. That's pretty cool. Sounds like a lot of work had to go into that.

But I will say one thing, from what you were just saying, is I can't tell you how many times I've had to learn the lesson over and over again in sales that I could have saved so much time, you know, prepping this custom quote, if I just, like, coughed up a range in the beginning and the person went, oh, that's not what I had in mind. Okay, good, fine, I'm glad we know now. We can, you know, we can explore other options, or you can go elsewhere. But I've wasted time, and I've had to become — I've had to mature on this aspect, I think, in my own business and in multiple businesses that I've been a part of, where you just go, like, just cut to the chase and let's just stop wasting time — set the right expectation right away.

So that's a really good learning I think that could be applied here, and I understand why there's trepidation, but I think it applies here as well. And I feel like I know the people who are not all for this, that are nervous about this — they're afraid the patient's going to see it and they're going to leave, whereas if we had the opportunity to show our value, and, like, that our doctor's board certified, and get them into the office, that we can convince them to do it.

Jonathan Kaplan

And I don't believe anybody's that charming. I think you might be so charming that once you get them in, that you can convince them to leave a $500 deposit or a $2,000 deposit. But by the time, you know, it gets to two weeks or three weeks before the operation, they're going to realize that they don't have the money. And that's the thing, is that price is not the only pain point — it is the ultimate pain point. It's the one thing that they cannot overcome. If they can't get financing, if they can't borrow the money from somebody, if they can't get the money, they're not having this procedure. If they have a job, they can get somebody to cover for them; if they have kids, they can get somebody to watch the kids. But if they don't have the money, they're not getting it.

So if you convince them to come in and you get a deposit, two to three weeks beforehand, when your office staff is acting like a bounty hunter trying to track down the balance, you're gonna find out they don't have the money, and then you're gonna have to postpone the operation and or cancel it, and then they're gonna want their non-refundable deposit back, and then you potentially get a bad review. So there's just so many other bad things that can happen if you just try to think that, oh, I'm just gonna get them in the door, even if they, you know, if they don't know the price, and then they will lower the boom on them 45 minutes into this potentially free consultation after they've, you know, exposed their deepest darkest secrets, undressed, and then telling the price. I mean, it's nonsense. It's insane.

Max Baybak

I could see both sides of the argument, but I definitely see everything you're saying. Here's what I would say — I understand the trepidation about the race to the bottom. I think that's, obviously, for obvious reasons, a larger concern in non-surgicals, simply on supply and demand fundamentals of how many, you know, new surgeons, board-certified surgeons — hopefully, if people are making that distinction, and there's more education to be done there — side note — more consumer education, right, so that they can factor that in against price, hopefully. But there's less supply coming into the market, if we're going to look at it as building blocks — I don't mean to minimize, you know, plastic surgeons down to building blocks, but simply saying that that market supply is slower, demand is increasing. So I don't think the race to the bottom is as grave there, so to speak. But I do understand that the fear of publishing pricing is that it will get that type of a race among competitors. So I understand that.

Jonathan Kaplan

I do want to point out two really quick things, though. One, you're not just — keep in mind, you're not showing the price. The patient has to put in their contact information before they even get the email to see the price, so you're not just listing it as a static menu. But the other thing is, the race to the bottom — that's a separate decision that doctors have to make. So it's true — just because you're showing your pricing doesn't mean it's the least expensive. Again, the patient doesn't know if it's the most expensive, least expensive, until they've already put in their contact and you've captured that information.

Then if you choose to lower your prices because you're worried that somebody else is — that you're going to try and undercut your competition — it's not because you're choosing to show price is why you're undercutting your competition. That was something you were going to do anyway, in my opinion. So I think that is a separate mentality, to undercut competition, a race to the bottom — not whether you show your pricing or not. Because even if you're not showing your pricing as a price estimator like I'm talking about, you still have secret shoppers calling your office asking how much you charge. So if people are wanting to be the low-cost leader, they're going to make that decision with or without our platform, with or without price transparency. So just want to throw that out there.

Max Baybak

I can make a counter argument, but it's not diametrically opposed — we're still pretty close. But let me say this, and you probably have thought about this: the industry that maybe is actually quite — again, not to compare, because no comparison in terms of technical skill and so forth — but the automotive industry. Car dealerships have hated price transparency as well, and everything that Elon Musk and Tesla are doing — just, like, buy the car, we ship it to you — it's just completely transparent. It's breaking the mold and pissing so many people off. But actually, what I would say is that, unfortunately, free market dynamics and economics are gonna — I don't think, actually — in some cases you might not have a choice. You might not say, I'm gonna hold firm — the market may push you down. But it's not your transparency that's pushing you down, it's the demand for transparency through technology, through the internet, which is happening, and you can't fight that change.

So I'm saying the same thing as you, but I am saying, I think if it's gonna happen — I'm not saying it's gonna happen, but if it's gonna happen, it's going to happen. And, you know, you can't really fight it. That's how I would say — you really can't fight those market impulse, you know, dynamics, and it's worthless to do so. You need to figure out how to ride that wave to your best benefit, I would say.

Jonathan Kaplan

And that gets into the benefit of just building this huge email marketing database. Because these people, maybe they're not going to come in to see you now, but they're interested in the service you provide — that's why you're on your website. I mean, you could build a huge email marketing database saying, we're going to give away a free car, that, you know, enter to win a drawing, but those aren't your patients, you know, who are wanting a free — who want a free car. That's not really cosmetic patients. If they're checking the pricing for your services, that means they're going to get those procedures from somebody eventually, and even if they don't get something from you now, maybe down the road they will. So at least you've captured them before maybe your competitors have.

Max Baybak

Absolutely. I want to back up to something else you said. I mentioned this before we started rolling, but you know, I want to talk about people on the show — I want to talk to founders like yourself, CEOs of companies that have these products. We focus on helping people build that core web presence and everything that goes into that — I don't have to unpack that now — but there's a lot of sort of what you might call an adjunct or satellite sort of service that really makes sense for someone to also be incorporating. And I'm super excited — I research those so that I can talk to our clients about it, so I can give our clients an edge, and the idea was, let's just have these people on a podcast to talk about it instead, and so that's the idea.

But I find that in almost all cases, and especially the good companies, there's a philosophy behind it — behind the company, really. There's an overarching or underlying philosophy as to why they think this is good, and sometimes it butts up against maybe not a controversial issue, but a hot-button issue, and in this case it's price transparency. So I love unpacking all the ins and outs of this with you. One component of it that you just mentioned is — you don't believe people — this stood out to me, and I also have sort of a counter argument, but again, we're not that far apart — people could be that charming.

So someone would say — I've been dealing with practices for 10 years in the aesthetic space on the marketing side, and have inevitably and sometimes unwillingly become a consultant, but that's just kind of part of it. You know, hopefully I can set them up for success. I can't be their full-time consultant, but if we're getting good leads and there's something happening there, we just always end up getting involved in a little bit of the front desk and the next point of conversion. And sometimes it's to correct ourselves — I'm not of the mind that, oh, we never did anything wrong and your front desk is always messing it up. Sometimes they're doing a great job, and we go, these leads are asking questions that are indicative of the fact that the way that we're acquiring them needs to change, and so we do take those learnings — so it goes both ways.

But the most time that I spent dealing with a practice is at the front desk. I really couldn't tell you much else beyond that in any expert way of what happens in a plastic surgery practice or med spa — some, but not with any great depth of knowledge. But we talked about that phone answering, those phone skills, the conversion, ad nauseum. And there are people who would say that they don't want the price shoppers at all — just, it's wasted my time. There are people who say they love that, because they have the opportunity to kind of convert them. And there are those, I would say, kind of diamond, you know, needle-in-a-haystack rare finds of people who can take that inquiry and convert it into an appointment without really answering the question, maybe only giving a range, and that is nice — I think it does sometimes exist. But they're hard to hold on to, and it just doesn't scale — that's what I would argue there. You can find those people, and I've seen some people who are just the best, but there's just not enough of them for all the practices. They're out there and they go, how do I solve these problems? You have to think in ways of things that can actually scale.

I'm noticing, as this industry is advancing and developing, that it's adopting more — and I mean aesthetics in general, but plastic surgery private practice — it's adopting strategies from other sectors that it just didn't have for the longest time, whether that be better business analytics and business intelligence, and just a lot of different practices, automation — a lot of things that have been happening in other sectors for a long time. And I'm going to talk about that in a minute, because I know I've been preaching — it's not anything, I don't think, super profound, but I've just been pointing out that there's a lot of good practices in e-commerce that actually really apply here, but they've been challenging to implement, and I'm going to talk about how I think BuildMyHealth can help with that in some ways.

But the charm comes in the scalable charm, let's call it — I'm just terming this right now — can come in all the nurturing. Yeah, it's nurturing. Well, you're finding a hack, you're finding a successful pattern, but if you can't find it in a scalable way, then did you find a pattern? Did you find a real solution? Especially as practices want to grow bigger and open multi-location — it's like, cool, you sort of tricked yourself in thinking that you found a solution. You didn't really, because you can't scale this. Maybe you can with training, maybe you can with understanding certain personality traits in your hiring — so I'm not gonna say it doesn't scale entirely, but it's very hard.

So if you can figure this out on the back end — meaning you've captured the lead, which you brought up, as you brought up several times now, as a key point, and I am right there with you as a marketer — and then you figure out how to educate them on why price is what they maybe shouldn't be entirely focused on when it comes to aesthetics, educate them on why you're coming to a surgeon with a certain certification and training, and additional training, and all kinds of extra credentials and qualifications. So that's what the good person does on the phone, but theoretically, could you do that at scale? Not everyone's going to open those emails, but could you do that at scale through a nurturing process? And I just wanted to offer that up, and I have other questions, but I'll let you answer if you have any thoughts about what I just said.

Jonathan Kaplan

Yeah, I mean, definitely being able to capture all those emails — because that's what everybody wants to know, is how much it costs. So you're just building — you're just filling that funnel, that sales funnel, chock full of tons of — it's like the cup overflow with — I mean, there's tons of patients, who are consumers, who are considering pricing. So that's going to be the thing. Like, if you ask them, do you want to sign up for our newsletter, are you ready — do you want to book a consult — they're not ready to do that yet. Well, one, they probably don't want another newsletter, but they're not ready to book a consult, they're not ready to get an online consultation. But pricing — that's at the top of the sales funnel. Whether they're just starting their research or whether they're down at the bottom of the funnel ready to pull the trigger, everybody wants to know the price, and that doesn't make them a price shopper.

You may be weeding out price shoppers, but just like you want to know how much a house costs before you go to the open house, or how much the car costs before you go to the dealership, everybody wants to know the cost eventually. It's very appropriate. And no, you're right, it's definitely not what you should be basing your decision on, but people are going to do that no matter what we say. Some people may learn from that — that's not the best, you know — you shouldn't try to save money on, no, anesthesia, and you shouldn't try and save money on cheap charcoal — those are things that you don't want to cut corners on.

But the idea is that you're getting those patients into your sales funnel, and then that one really good front office staff who's good at calling patients back can then follow up with them via email or phone, or just, you know, those 12 additional touch points, if you send out a monthly email newsletter, that you're just getting in touch with those people, and eventually they're going to come in, or they're going to let a friend of theirs know about you, and they're going to refer somebody. And so just getting all those patients in your funnel is definitely the scalable approach.

Max Baybak

I really like the way you brought that up. Oh — I just had a feature idea for you as you were talking about this. You have thought of a lot of things — as I was looking through some of the videos on YouTube, I was like, oh, he's thinking about a lot of ways to use this information. But you might have already — I bet you thought of this, but I just want to ask you, now that you've built it up like this.

Jonathan Kaplan

I sure hope I have. We'll see.

Max Baybak

You brought up a good point. I was saying scale — scale the nurture after the fact, versus try to scale — get them charmed all in that one moment, when you just have that precious moment to get them on the phone, and if you lose them, they're gone forever. I was just thinking through email nurture, but of course, you could call them. So have your staff, who is also still good at closing and converting — but now they have multiple shots at it. It can be frustrating sometimes, because you get that lead and they never answer the phone again or whatever, but you technically, theoretically, have multiple shots — they could pick up the phone and they could call them.

And then another point, and then I'm gonna get to my feature, I apologize. You brought up — people are gonna ask anyway. I think it's like a mental block before I can go through the next — if you read sales books, and I've read a handful in my day — it's not something I would claim that I'm a pure expert on or something, but I know a bit about the philosophy of sales — and you know, you're removing these different objections and barriers, and sometimes that first one, like, allows the person — something that I tend to try to do is get the person to stop thinking about money for long enough that I can get the other benefits to kind of sink in. And I say you can do this a number of ways — you can just say, like, let's just pretend the money's not there, and I'm gonna take the pressure off, but just — let's — can you talk to me about this without talking about the money for a second? And however you get them to actually truly assume that vulnerability, you're in a totally different position with them, where now you can get those other things across. So I would say, you're right, they're going to ask it. There's still more to do in the sale, but it might just be kind of like a mental barrier to you being able to get those next barriers removed until you answer that.

So the feature is this: could the person respond with the email saying, was this in my budget — was this in your budget or not — and then they could tell you basically their level of interest based on that, and you could spend your time on the people in the follow-up based on their answer. So they — they — yeah, you follow?

Jonathan Kaplan

Yes. So we do a certain — something sort of similar, is that as part of the process, when they're going through to check pricing, we ask two questions. How soon are you looking to get this done — so we're curious about how far down the funnel they are, and then we have, like, immediately, or a few weeks, or a few months, so we kind of see how serious they are at this moment. The second question we ask is, can we follow up with you? And you'll have people — absolutely, or, okay, I guess I do have a few more questions, or, no, don't follow up with me. So we do kind of get drilled down to that a little bit with those two questions, to see if that's something that they are seriously considering.

Max Baybak

I think your questions are better, because if they say, can you follow up, then they are tacitly saying, yes, I'm good — yes, follow up, please. So rather than only making it about money too much — because actually, I think you're — yes, so that's awesome, and I love that, because ultimately a lot about marketing is capturing and filtering, and you want to try to capture with as much specificity and targeting as possible, but you're still going to have to filter. And this is a time saver, ultimately — we talked about that, not answering the phone. So if you can then also go, I'll still follow up with these other people, but I'm going to prioritize them, right?

Jonathan Kaplan

Also have their zip codes, so that's another way to prioritize — is, like, okay, this person's local, I'll follow up with them, as opposed to the person that's 3,000 miles away.

Max Baybak

So speaking of, like, the maturation of this industry and sophistication and adopting things — like, lead scoring is something that this industry really hasn't thought about too much. I do know some practices that try to get there, but they're, like — they have full phone centers and call centers and so forth. That's where you're getting to it — I have one practice that insists that we put the zip code in, because they would prioritize those leads, and I think it's very smart.

And I used to work — this was in a different industry a long time ago — we'd capture leads and we'd ask survey questions in this form, and if they didn't answer it certain ways, we wouldn't consider it a lead. They would still follow up, but we would exclude it from the cost per acquisition. So the cost per acquisition was only these leads that answered a certain amount of things the right way. So you could still follow up with those other ones, but that's just bonus stuff, you know, bonus leads that you could follow up with and nurture, and maybe they'll turn into something down the line. But in other words, there are ways to filter and measure this, and separate the wheat from the chaff, and know what you're dealing with, and know what your cost per acquisition is on a good qualified lead. Even if you think what you're doing is cheapening what you're doing, you're actually just finding the people who are not going to be a waste of your time — and, like I said, capture and filter. So I think it makes a lot of sense.

Jonathan Kaplan

And you mentioned cost of acquisition — that's something that we also allow for, is that when the person comes in — like, so, you know, however much the platform will cost, each time we generate a lead, we know the cost per lead. But when they come in for a consultation, that wish list that they've submitted, that pops into the provider portal, and so you can take that lead and update it as needed for the official consultation. So it's kind of this, like, end-to-end process. I also think of it like kind of a cafeteria — that you start, you get the tray, and then you move on and you get this drink, or maybe you put it back, you get this food, put it back.

So they've submitted the wish list, the office staff has access to that lead, the person comes in for a consultation, you update or edit that estimate as needed, and then you set that as the final quote — that shows the person's come in for a consultation. So now you know your cost per consultation, and then if they actually book, you mark that, and now you know your cost per booking. So you have your cost per lead, your cost per consultation, cost per booking. It's just a really nice way to keep track of that, to measure, you know, whether these leads are worth anything, whether these people are coming in or not.

Max Baybak

Yeah, and what I was getting excited about as you were saying that is, you can also prioritize your leads by the level of, like, what they're interested in. So — and a lot of lead capture already will capture, what are you kind of interested in, procedure-wise, but if you can get more specific on that, you can then prioritize your higher-value leads, because you have a way of — based on what they're interested in, and if they agreed to follow up, etc. — then you really know. And this can actually do away with a lot of the frustration at either the front desk or, as I would argue, people need to have dedicated — you can call them different things — sales teams, essentially, is essentially what their function is. We see this more and more, and I applaud it, and it's a cost that seems like one would want to try to avoid when keeping costs down and running a surgical practice, but in cash-pay aesthetics, like, you have to do it, I think, to really win. The practices that try to have someone doing that and wearing other hats, I think, end up being frustrated — their people end up being frustrated. But one of the ways you can make it better for the person doing it, or at least make it feasible for someone who's wearing multiple hats to do it, is to help them prioritize and bubble up to the top the high-value stuff. So I really like that.

Ultimately, lead gen is what I was excited about on this. And so when I first saw it — and it was one of our clients in Tennessee that showed me it — and I said, this is great. I had had one other client that I knew that was doing something like this, but they weren't using your platform, so it was a little bit more rudimentary, in that a person put in their email to get pricing and they were just sent, you know, just via an autoresponder email, a full price list. There's a lot of reasons that's not great, as you talked about, but also, you kind of have to just be willing to let anyone see your full price list, including competitors. But that thing blew up. They were in a very saturated market with a lot of interest, a lot of consumer demand, but, like, to the tune of thousands of leads per month, just saying, hey, I want my price list here. And they wouldn't even follow up with a single one — they didn't care, they just put them on their email list. That was their strategy, because they were full up enough. But this built an email list.

So we live in an information era. There's two things you can do with this information — there's an information economy, right? And you can either run a business — when it comes to information, there's kind of two major ways people use it, which is, they're either using it to monetize it, or they're using it as lead magnets, right? So, a way to give something away for free to get something in return, which in many cases is a lead. And I think it may be overlooked — we've talked about why you should sort of not fight the trend of price transparency, because it's kind of already happening, but let's talk about the benefit of it. It's a piece of information that you can trade.

So, forgive me, because I'm kind of going off on a tangent here, but I mentioned earlier, talking about how, in the e-commerce world, there's these best practices that I want to see more adopted by aesthetics. Those have largely been thwarted by kind of dark pools of data in databases, and HIPAA trepidation, let's call it, to make systems in the medical world talk to each other. Because in the e-commerce world, I buy something, it shoots it right over automatically — auto-magically, as I call it — to the email marketing program that sends out an email, that notices whether or not I purchase within the next week, which sends me another thing, which then tells Facebook that I should run an ad, and you have all this awesome stuff happening completely automatedly. But if these systems don't talk to each other, it won't happen.

But there are ways that we can do things, but we need that email capture. In buying a product, I can just buy the product — I'm a first-time shopper, I put in my email, it's an inherent part of buying the product. Or I come to the site and it says, hey, get 10 percent off your first purchase — I'm interested in testing that more for only non-surgical; I don't really like it for surgery, I think that that's not the right tone — but just having a little pop-up, and you capture that. However, like you said, if you can trade this information — so I'm always telling people they should work on strategies to buy lists — and this is — I'm sorry — not — never to buy a list, I apologize — to build a list.

Jonathan Kaplan

Yeah, I just gave a talk on email marketing which I specifically said — if you think you can buy a list, think again. It's not legal, and it won't work.

Max Baybak

But actually, people do say, hey, I want to be doing more email marketing, but they haven't been making the effort at the front desk for years, like some practices, to say, hey, would you like to opt into email marketing, to be compliant, and so they don't have a list at all, and they cannot email market. So one of the suggestions that I give them is to do something like your platform — whether they use your platform or they want to go with the more, you know, rudimentary, basic way to begin with — and it's an awesome way to build a list, and you can build that up to thousands, to tens of thousands, and work in an email strategy which trickles and harvests value out of that list over time.

And I'm gonna — I want to give you a chance to get a word in edgewise here, but you also brought up another thing, which is that the other tactics that people utilize don't target your consumers — they target price-sensitive people. Giveaways are a great example. There are some hacks to make sure that you target sort of a high-value person with a giveaway, so that you're not just getting a price-sensitive person — but inherently, a giveaway person wanted the thing for free, they don't want to pay for it. So, cool, you got a thousand emails on your list for giving away a car, giving away a surgery — which I wouldn't really advise, I have seen it done, though. But are those people who didn't win the surgery really customers for the surgery? No.

So two points I'm hitting on here is that you brought — you're trading this data that you have, that is of value, as a lead magnet — that's the term for it, for anyone who's not aware of that — and then you're targeting people who came to you through whatever channel with some organic intent to learn about your services. That is what I think is — that's probably the most powerful thing, and then there's all the other benefits — save you time, it's happening anyway, might as well — but that's the key, to me, right there.

Jonathan Kaplan

Yeah, and the other thing is, we've actually come up with some creative ways to apply — like Amazon — any and anytime anybody wants to compare a good e-commerce strategy, they mention, like, you know, Amazon, and we've applied something like that to this. So yes, we have the lead generation from people checking pricing on services — surgical services or non-surgical services they're interested in. But one thing that is a huge gaping hole — and I think almost all websites that doctors use — as far as, like, their online store: how does their online store work? They list all the products, they list all the prices. So the only people you're going to find out who they are, are the people that buy it — again, people at the very bottom of the funnel. So we know people who are looking through the pricing of their store — most of the people aren't going to buy it, they're just looking to see the price.

So what we've done with our price estimator is that you can sell — we actually have the merchant services built into our platform, where you can buy skincare products, you can buy bariatric supplements, you can buy Botox and fillers, other non-surgical things like that. But to see the price of those things — like, say you want to buy it — you have to add it to your cart first, and to add it to your cart, you have to create an account or put your contact information in, if you already have an account. Once you add it to your cart, then you see the price, and if the person buys it, great — you get their contact information. But again, as I said, most people are not going to buy it. But because they had to create an account, put in their contact information to add it to their cart, 15 minutes later, just like Amazon, they get an abandoned cart email saying, hey, you left that Botox in your cart. That same email goes to the office staff, who sees that person's name, email, phone number, and things like that. So that's, like, a whole nother category of leads that we're capturing that a PDF that you're talking about can't do — that you're actually capturing the people who are thinking about buying from your store — you're still getting their contact information.

And you may say, oh, well, people, once they see they have to put in their contact information to see the price, they're going to stop there — they're not going to put their information in. We found that that only stops 13 percent of the people. So that means 87 percent of the people that started the process go through, put in their contact information, because they realize they can't get your pricing information anyplace else. You're the only one who has that pricing information — just like I don't have other doctors' pricing information, they don't have mine. The only way you're going to get it is from me. So it's this carrot that you can't really — it's just too hard to — it's too tantalizing, that if you want that information, you're gonna have to put in your contact information. And people are getting more used to that now — they're not so averse to that. The doctors might be averse to providing the pricing, but the consumer really wants it.

Max Baybak

No, you said it exactly right — this is the way the consumer wants to act. There's a lot of other examples of that — SMS and other things. People want to chat — as you mentioned, you have a chat version of your tool for price estimation, right? And so we need to move to where the consumer wants to be. And you're opening up, through this — this is what I get excited about as a marketer — is you open up the capabilities to do some things we've been doing so successfully for a long time in other industries. But being that there's kind of this brick-and-mortar component — or, not, you know — something that you — there are products you can buy online, but you're not transacting, strictly speaking, online, so it limits it. So there's clever products like this, and platforms like BuildMyHealth, that are helping with that, and I love that it's opening the door to those things. Do you have information — and I don't know if you would share it, or if you even have it — kind of an aggregate of kind of conversion rates, generally speaking, from, hey, I just want to get a price, to, let's just call it, consult?

Jonathan Kaplan

Yeah, absolutely. And also, that being able to track that more automatically — when the lead comes in and then you update the estimate when they come in, we're going to get even bigger data for more doctors, to be even more accurate or more granular. But based on the manual studies that we've done, that I've gotten published, actually, we found that of all the people that submit a wish list, 17.8 percent of them, over the course of a year — 17.8 percent of them came in for a consultation, and of those, 62 percent booked. And I mentioned this quote earlier — this figure earlier — that 62 percent that book after coming in for a consultation, that they were 41 percent more likely to book a consultation — book a procedure — than the patients that were not price aware. So yes, 17.8 percent over the course of a year come in for a consultation after submitting that wish list, and then of those, 62 percent book a procedure.

Max Baybak

Is the 41 percent more likely based on a comparison of consult to procedure from people who didn't request the price? Where do you derive that from?

Jonathan Kaplan

Oh yeah, the 41 percent more likely — it's the people who come in for a consultation, and you've got the ones that did not know price ahead of time versus the ones that did know price ahead of time. These people who knew price ahead of time were 41 percent more likely to book a procedure than those that came in for a consultation not knowing price ahead of time.

Max Baybak

Ostensibly, the lower number — those patients were more struck by sticker shock, more so, sure, than the ones that were ready to book. Is that based on just asking the question, if they're likely, or the fact that they did proceed to go ahead and do this — based on that they actually — okay, so they were not only more likely, they in fact did?

Jonathan Kaplan

Correct.

Max Baybak

And so you've done this study — that's interesting, that's fast.

Jonathan Kaplan

It's been published. You can find the study — it's in the Annals of Plastic Surgery. You don't have to have a subscription — I paid extra to make it open source. I mean, it had to get accepted first, and then I paid extra for it to be open source. But if you just Google "price transparency online age Jonathan Kaplan Annals of Plastic Surgery" — any of that combination — you'll get the article and the full PDF of it.

Max Baybak

Cool. You know, it'd be another interesting — that's great, people should definitely go look that up — I know I'm going to. And the other thing that's interesting, as a study that could be done — we could collaborate on this together if you wanted to — that doesn't tell the whole picture until you look at your cost per acquisition. So I could then compare that to a group of leads — a cohort of leads that were obtained via a paid channel, advertising of some kind — and go ahead and look at what their conversion rate is to surgery — I'm sorry, to consult, and then to surgery or treatment — and whether the percentages are better or worse.

What I can promise you right now is the cost for the initial lead acquisition on this price point side is dramatically less — or is going to be, for the most part, less — simply because even if I brought them there through a paid channel, to the site, and then they filled out the BuildMyHealth wish list, rather than going to "ask a question," "request the consult" — we try to give them a couple ways to convert, because if you say, like, "request consultation," they may go, I'm not really ready for that — I don't know, do I want it? So you want to give them lower friction, lower asks, and go, okay, what about just "ask a question," or, you know, "get a price." Guaranteed, those lower-hanging-fruit, lesser-friction asks are coming at a lower cost acquisition. As, for example, that one surgeon I said was getting thousands of price requests — even if those were coming through paid channels, or even if you attributed your SEO costs and divided it across all those leads, it's a way lower cost per acquisition.

I know you have other things to do today — patients to see — so I want to be mindful of your time. I could honestly do a two-hour show, because this is, like, super fascinating. I almost want to ask you to come back and do a part two, because we didn't get at all into — we scheduled this show, and then, kind of, since then — we've been talking for a while about doing this — the No Surprises Act came out, and I know you recently — speaking of articles that you've authored — I recently read the article you published on ModMed about this, and I wanted to get into it with you today, but, like, it's almost an entire episode — I wonder if we should do that. But you can do a little teaser now, and then we can do a separate episode about that. Yeah, I'd love to hear kind of what you're talking about with that, what your stance is on that, and what people need to know about the No Surprises Act.

Jonathan Kaplan

Yeah, they definitely need to know about the No Surprises Act, because most aesthetic providers think that the No Surprises Act — one, they don't know what it is, but whatever it is, if something came out of Congress, it certainly doesn't apply to aesthetic providers. If it deals with health care, certainly it only deals with doctors that are dealing with Medicare, Medicaid — which is actually the one group it doesn't deal with. But they would think it just deals with insurance-based services. But the No Surprises Act — it was implemented — I mean, we're already past the implementation, so if it's something you're thinking, oh, that's coming down the road, I'll prepare for it in the future — you're already non-compliant, let's just say that.

But it was implemented on January 1st, and the No Surprises Act partly deals with reducing surprise bills. You know, people go to the ER, and, you know, their insurance covers the ER visit, but the radiologist that read the x-ray or the anesthesiologist that put in their epidural was out of their network, and so they got struck with a surprise bill — where if they have out-of-network benefits, they have higher cost sharing; if they don't have out-of-network benefits, then they're on the hook for all this, even though they have insurance. So the No Surprises Act eliminated the possibility of doctors sending surprise bills in an emergency situation, and certain non-emergency situations they eliminated, but others you can get consent ahead of time.

But the part that the aesthetic providers need to know about is that with the No Surprises Act, they're now saying, if people are paying for services not using insurance, that they're either uninsured or they're self-pay. And what they really intended to mean by self-pay was people who know that there's a cash rate that's better than if they went through insurance — so they have insurance, but they're choosing to pay cash for that MRI because it's way less expensive. But that self-pay also applies, by the letter of the law — also applies to aesthetic services. So for the first time I can remember, the congressional legislation coming out is affecting aesthetic providers who don't take insurance. And so now you have to provide a patient with a good faith estimate, according to the No Surprises Act, which just details what certain things have to be within that estimate, what disclaimers have to be within that estimate.

And so — I mean, not to be too promotional, but what we've done is that when the provider goes into the database, or to the back end, takes that patient's estimate and updates it for the official consultation and the official quote, our system automatically includes those government-derived regulations, or the government-specific disclaimers, that have to be part of that estimate now — we automatically put it in there. So when the patient signs the quote, they're also signing that they got those disclaimers that the government requires. Now, this absolutely applies to aesthetic surgeons — even though I don't think it should, even though I don't think it was intended — but the terminology they use, self-pay, absolutely applies to aesthetic providers.

Max Baybak

That's — yeah, I don't think you're being — I like you being self-promotional. If you've created a tool that's going to help people, you know, who are not sure what to do with this, like, let's talk about it. That's the whole point of this — is to help people discover solutions that they may need for problems that they're facing. This is one that a lot of people are trying to figure out right now. And I, you know, got to see some snippets of the webinar that you did on this, which we should include in the show notes, by the way.

Jonathan Kaplan

Okay, I was gonna say, where do they go — but exactly, look down in the show notes.

Max Baybak

And we'll actually give you a YouTube link.

Jonathan Kaplan

So yeah, down here — you check on the YouTube link. That way you don't have to sign in for it, so it's not — it's not another lead grab. If I sent you the GoToMedia — GoToWebinar link, then yes, you'd have to, like, register or whatever for the video, but we'll send you the YouTube link. That way you don't have to register — you can just watch it on your own free time.

Max Baybak

What if they want to know how much the webinar costs, though, Jonathan? I'm just — I'm just kidding. Okay, so — but ultimately, I caught that point that you brought up — although you said cash pay traditionally means something a little bit different, but it did — that's exactly — because I was trying to understand for myself, where does this fit in? It's pretty clear where it fits in for an aesthetic practice that has the overlap into insurance-based services. And while there are a few that are really 100 percent purely aesthetic — we do represent, or work with, and help do the marketing for practices that are 100 percent aesthetic — so I was trying to understand those two kind of archetypes, if you will, and how does it apply. And ultimately, my conclusion is it applies to both of them. Is that yours?

Jonathan Kaplan

It does, and I'll clarify that. The No Surprises Act, you know, deals with mostly out-of-network billing — a lot of plastic surgeons who do breast reconstruction bill out of network, which means they can get a higher reimbursement rate; there's a higher cost share for the patient. And then the other part of the No Surprises Act is letting people know their costs when it's self-pay, which is — aesthetic has wrapped into that. The thing is, though, if you're doing an out-of-network service — again, if it's an emergency situation, you can't bill out of network. But if you're doing breast reconstruction, it's an elective procedure, it's not an emergency — you are allowed to get consent from the patient to do the procedure as an out-of-network procedure, and they're signing on the dotted line showing that, or testifying, I guess, that they understand they're going to get an out-of-network bill. They're going to get — not a surprise bill, because they're being allowed to know about it ahead of time.

So for those out-of-network procedures, not only do you have to get consent for them, you also have to provide them with an estimate of how much their out-of-pocket expense is going to be. Our system, kind of like I alluded to earlier, allows you to put in their insurance information, and it automatically can check what their — how much they paid towards their deductible, their out-of-pocket maximum, and what their co-insurance is, specifically for out-of-network benefits — or it'll let you know that they don't have out-of-network benefits. So our system can let them know that, and it includes the consent form for that — basically, I call it a financial consent — letting — that they understand that they're going to get an out-of-network bill.

So yes, even for insurance — the plastic surgeons, for example, who are dealing with out-of-network insurance have to have them sign that, have to provide them with an estimate, which they're probably not used to doing as of right now. And if it's self-pay, not even using insurance, you have to provide them an estimate. So the whole price transparency thing — don't take my word for it. The federal government has already decided this is going to apply to all of medicine, because healthcare is the only segment of the economy where you find out how much something costs after you did it. The federal government is changing that. It's like — the amount that has transpired in the last four years when it comes to price transparency, it's kind of mind-boggling, because you felt like it was never going to happen, but it's clearly happening now.

Max Baybak

Look at that — you started BuildMyBod in the same year that Bitcoin was created, and you were just —

Jonathan Kaplan

Wish I would have invested in that too.

Max Baybak

No, but you were looking at the future. Um, you know, like you said, you obviously had a vision that's taking some time to come to fruition across all of medicine. From a marketing perspective, I see it — obviously you have a lot more insight into it as a board-certified plastic surgeon. But everyone, again, check the link down below — the webinar that Jonathan did is a treasure trove of information, and you can also call him directly on his cell phone for free consulting on the No Surprises Act — of course, I'm just kidding, Jonathan.

I do want to let you go. I had a million other questions, because you have so many cool features that you talk about that I actually don't have that much familiarity with, I haven't played with, on your platform — everything from — I listed out some things here — memberships and subscriptions, I wanted to hear more about the chat, the financing aspect, where you can connect them to financing at the end once they've gotten the pricing, surge pricing —

Jonathan Kaplan

Pretty cool — the idea that the patient could come in not only knowing the price but also be pre-approved for that amount. Because we always say, wouldn't it be great if patients came in pre-approved? Well, how do they get pre-approved for the right amount, or around the right amount, if you won't tell them how much it costs ahead of time? But yeah, surge pricing is another big thing — that the prices automatically adjust and increase based on how much demand you have. Then the other thing we talked about before was the fact that you can actually see how your prices — how the provider can log into the back end and see how their prices compare across our network of doctors.

Max Baybak

That's another one I wanted to bring up — that's another one to bring up. But we've unpacked a lot of it. So, people want to learn more about it, potentially look into, you know, implementing BuildMyHealth in their practice — where do they go?

Jonathan Kaplan

They can start by emailing me if they want — jonathan, j-o-n-a-t-h-a-n, at buildmybod.com, b-u-i-l-d-m-y-b-o-d dot com. Or they can just go to buildmybod.com and they'll see a link where they can become a price transparent provider. It's a link at the top — they click on that, they create their own free account, they can log in, they can start adding procedures and prices, and again, they'll see how their price is compared to other providers across the US, region, state, 50-mile radius, and zip code. And then at some point they'll hit a paywall, and then we can go from there, about as far as including the price estimator on their website, or the chatbot, if they choose. But a lot of features that — yeah, we didn't get to all of them, but a lot of things that come with it.

Max Baybak

Super cool. Well, Jonathan, thank you so much for your time, man. Like I said, I know you have patients to get to — I'm going to let you run. Thank you so much for spending this time with us. I love what you're doing, I want to hear more about it — maybe we can do another show, talk more about potentially the No Surprises Act — although your webinar may kind of solve — answer most questions people have — but I'd love to kind of track what you're doing and ask you to come back again. And I look forward to seeing you at some of the upcoming conferences throughout 2022.

Jonathan Kaplan

Absolutely, look forward to it. Thanks so much for having me.

Max Baybak

All right, thank you again. Thank you, everybody — catch you next time.