Groupon and competitors like Living Social offer daily deals on services and goods. The discounts — often only available to first time purchasers — lower the barrier of trying a new provider or product by tantalizing potential buyers who don’t want to commit without a trial. These sites definitely generate a new customer base with the hope that losing the money on the initial deal converts those first-timers into loyal customers whose lifetime value far exceeds the discount.
Groupon can be a useful tool in your practice growth strategy and can have a major effect on building your patient base when you provide the service and value to convert voucher purchasers into regulars.
Yet, choosing a medical or dental provider should be a more carefully considered decision than trying out other service-based businesses, like a restaurant. It isn’t exactly beneficial to healthcare providers or patients to experience a rush of one-time clients who never return.
So, are Groupons right for healthcare providers? Do they have a positive long-term ROI or will you lose money treating a series of one-off patients who came in just for the first-timer discount? Also, what are the ethical and legal ramifications of offering discounts for healthcare?
Are Your Peers Using Groupon?
Looking at what similar practices are doing can help you decide if marketing with Groupon will be helpful for your practice. Searching on Groupon you can find deals on many health care procedures including Lasik, massage and chiropractic sessions, dental work, and cosmetic surgery. NBC News reports that about 9% of all offers on daily deal websites in November 2011 were for dental or medical treatments. Those numbers are escalating as copycat sites pop up based on the success of Groupon.
The type of deal provided by medical or dental groups varies, but some examples include:
- A full medical checkup with blood, stool, and urinalysis for $69, discounted from $200.
- A flu shot for just $17
- A dental exam and cleaning for $99, down from $142
What Kind of Patients Will You Get From Groupon?
The NBC report indicates that many uninsured individuals rely on health-related deals from Groupon and Living Social to lower their healthcare costs. This may mean they’ll visit a different doctor or dentist each time as they find new coupons. This doesn’t provide much of an ROI on the initial discount you’ve offered, and it also lowers the quality of care you’re able to provide.
Groupon also doesn’t vet their sellers, so patients are often making a health care choice based mostly on cost savings. Unlike purchasing medical services and treatments through regular channels, many Groupon shoppers don’t do research about the provider, or get referrals from people they trust, even for an invasive procedure like cosmetic surgery. You have to decide if it’s in line with your practice’s brand to offer discounts or if it lowers your perceived value.
But There Are Benefits to Marketing with Groupon, Too…
Some practices do see a benefit when using Groupon to advertise. Dr. Gregg Feinerman, an ophthalmologist who runs his own vision center, uses the service. Through Groupon, he offered a 58% discount off Lasik eye surgery with the goal of bringing in patients under the age of 30 and building up a referral system. Initially, he wanted to offer the surgery at $3,000, but Groupon pushed it down to $2,100.
Thomas Cho came to Dr. Feinerman because his insurance only covered 20% of the high cost of Lasik. Not only did Dr. Feinerman generate new revenue, the Lasik surgery went well and Cho gave the vision center a five-star rating on Yelp. This positive review helped build the doctor’s brand and credibility, yet also brought in new patients. So, while Dr. Feinerman only saw Cho for one procedure, Cho’s lifetime value was much higher than that initial $2100.
Groupon seems to work best for large, one-time procedures on new patients and not counting on them returning to your practice in order to make up the initial loss.
What Are the Legal and Ethical Ramifications of Offering Deals Through Groupon?
According to MedpageToday’s Kevin Pho, MD, it’s a matter of ethics for many healthcare professionals, but there are potential legal issues as well. In some states, laws prohibit a fee-splitting scenario for medical businesses. For example, New York statutes define using a third party – such as a daily deal site like Groupon – for soliciting patients, as unprofessional conduct.
Other countries are taking a stand against the medical community’s use of this kind of marketing altogether. The British Association of Aesthetic Plastic Surgeons issued a formal statement against marketing cosmetic surgeries through discount sites.
“The trivialization and commoditization of medical procedures is appalling. It seems to have come down to the level of loyalty cards, money-off vouchers and even competition prizes.”
The BAAPS goes on to point out that using this marketing strategy lowers the actual value of both the service and medical brand.
Despite this, services not covered by insurance, such as cosmetic injections and dental procedures, are becoming more common on the daily deal sites. For instance, Invisalign is often seen on daily deal sites and is not usually covered by insurance providers for adult patients. Another example is Groupons for Botox and other injectables… even larger cosmetic procedures!
Things to Consider Before Using Groupon
- Check with a lawyer to make sure offering a discount through a third party is legal. In some states, it may be a clear ethics violation, or at least a gray area.
- There may be Medicare penalties, though this again is a gray area. The Anti-Inducement Provision provides for monetary penalties that may apply, so it’s important to check.
- State and federal anti-kickback laws also broadly prohibits this type of solicitation for patients from practices that rely on federal programs like Medicare, Medicaid and veteran’s benefits.
The positive side of the marriage between health care and Groupon is both generating new patients and building brand awareness. It also helps patients who may not otherwise be able to afford the checkups or screenings they need.
At the end of the day, whether or not to use Groupon is a personal decision, and one that depends on what result you expect (e.g., returning vs. one-time patients), if coupons are in line with your brand, and how you ethically feel about using Groupon.