Why does the pricing for hormone therapy vary so widely from clinic to clinic? The volume of a telemed clinic lowers the price of medication and services for its customers.
Hello, everybody, it is Sam Ridgway, owner of Viking Alternative Medicine and Mark from Texas asks, Why does the pricing for hormone therapy vary so widely from clinic to clinic? In order to answer this question, we first have to do away with all of the hype and glamour portrayed by many clinics pretending they have some magical concoction nobody else has, which, of course, justifies their expensive programs. We need to push past the promise of unrealistic expectations, like if you do this, you’ll have rock hard abs.
If you do that, you’ll perform like a porn star. If you do or take something else, you’ll be running marathons in a matter of weeks because all of that is bullshit. So in order to answer Mark’s question, we’re going to have to go behind the scenes and expose how things really work in the hormone replacement industry. What Mark is asking is, why will you find one clinic that charges, let’s say, 400 dollars a month for the exact same thing another clinic charges one hundred dollars for why the difference?
And it’s not that you’re getting better testosterone from one place over another. All U.S. pharmacies are tightly regulated and monitored for purity, strength and sterility. It’s not even expensive to make testosterone, so there’s really no reason at all for licensed pharmacies to cut corners. So it’s not medication quality that affects pricing. The truth is, it’s simple economics. And let me explain how things really work in this industry. When you place an order for, let’s say, 100 dollars, approximately 50 percent of that goes to medication cost.
So you half of your money is used to pay for the medication itself. And the remaining 50 dollars is used to pay labor costs to get that prescription written, approved, signed, sent to the pharmacy for fulfillment and tracked once the medication has shipped. It also has to cover the cost of a medical director phone system, software to store patient records, Internet, insurance, taxes and everything else every other business across America requires to operate, and whatever is left over is, of course, profit.
So as you can see, it takes a lot of active patients to make money in the hormone replacement therapy industry. And that’s where your brick and mortar clinic has a disadvantage because their hands are usually tied geographically. They have maybe a 30 mile radius around their physical location to pull customers from. So a successful brick and mortar clinic might have 300 patients, Max. And if each one of those patients spends two hundred dollars a month, that’s 60000 dollars a month in gross revenue.
But as we’ve already discussed, half of that is going to medication costs, leaving thirty thousand dollars to pay rent, electric the salaries of the entire medical team, customer service and the ordering department, et cetera. And at the end of the day, there’s no money left over, which is why they have to price gouge you just to keep their doors open. So it’s not necessarily greed, although there’s plenty of that in the industry, but it’s usually nothing more than a requirement for survival.
And that’s why you’ll spend hundreds of dollars more for the exact same medications. Now, compare that to a telemed clinic that has an exceptional marketing platform. Let’s say they can bring on 5000 patients from across the entire U.S., all of them spending the same $200, that’s a million dollars a month. And even if half of that goes to med cost, you’re still left with $500,000 to pay overhead. And yes, while you would need more employees to handle 5000 patients instead of 300, it’s not an exponential increase.
It doesn’t take 15 times the number of employees to handle the additional 4700 patients. And by implementing the right software systems, a lot of the mundane processes can be automated, further reducing the cost of labor. On top of that, the telemed clinic purchases far more medications from the pharmacies to service their much larger patient base. This allows the telemed clinic to negotiate volume discounts so the Telemed clinic can actually lower the price of the meds from, let’s say, $100 to $40.
And that savings gets passed on to the patients in the form of reduced medication costs. So when you compare a local hormone clinic to a telemed one, you actually get better customer service and a more knowledgeable medical staff. And this is because a telemed clinic can hire the best of the best from anywhere in the U.S. They’re not geographically bound to only choose employees within close proximity to the office. So would you rather have a medical staff that only works with 300 patients or one that has the knowledge and experience gained from working with 5000?
And in the end, you get far better pricing from a Telemed clinic. Pricing a brick and mortar just can’t touch. But there’s still another type of clinic we haven’t even talked about. What about the telemed clinic that still charges you the brick and mortar pricing? Well, they’re just assholes. So the moral of the story is volume makes all the difference. More patients means more profit. More profit means better employees. Better employees means better customer service and a more knowledgeable medical staff.
And in the end, you get all of these benefits at a fraction of the price. So in conclusion, Mark from Texas, to answer your original question, that’s why the cost of treatment varies so widely from clinic to clinic. You don’t get more because you spend more. The truth is you actually get less. But regardless if you’re getting a great deal or if you’re getting screwed, always remember you are never too old to live like a Viking until next time.