Your neurotoxin reprice: the decision, with your numbers

A client lesson is the library's method applied to one clinic and one decision, written the week the decision comes up. This one was written for Harbor in September, when the July supplier increase had cost three points of margin for two months.

Sample. Harbor Aesthetics is invented. This page shows what a client-specific lesson looks like; the method is Finance 7, the numbers are illustrative.

What happened

On July 1 the supplier raised the 100 unit vial by $45. At 95 usable units a vial, that is 47 cents a unit. Price stayed at $14. Neurotoxin margin on the scorecard went from 71% in June to 68% in July and stayed there in August. Across 4,100 units a month, the increase cost about $1,930 a month of contribution, or $23,000 a year if nothing changed.

Your unit, before and after

One unit of neurotoxin	June	July, no change	September, repriced
Price to the patient	$14.00	$14.00	$15.00
Product cost per usable unit	(6.20)	(6.67)	(6.67)
Commission at 20% of revenue net of product	(1.56)	(1.47)	(1.67)
Card fee and consumables	(0.56)	(0.56)	(0.59)
Contribution per unit	$5.68	$5.30	$6.07

Note the commission base. Because Harbor moved to commission on revenue net of product in May (see the decision log), the injectors' pay did not rise on the supplier's increase and does rise on the reprice. Under the old plan the injector would have taken 30 cents of every dollar of the increase before product.

The options we looked at

Option	Contribution a month, 4,100 units	Risk
Do nothing	$21,730	$23,000 a year given away; margin stays at 68%
Reprice to $15 a unit, members held at $14 through December	$24,890	Low. Announced two weeks ahead with the reason. Units per patient and rebook watched for two months.
Renegotiate to the next volume tier by consolidating filler orders with the same supplier	$23,100	Medium. Ties filler purchasing to one supplier; saves 35 cents a unit if the tier holds.
Both	$26,300	The reprice now, the tier at the January contract review.

The decision

Reprice to $15 on September 8, members held at $14 through December, tier renegotiation at the January review. The desk sentence: "Our product costs went up over the summer, so neurotoxin is $15 a unit from the 8th. Members stay at $14 through the end of the year, which is one more reason to join." Twelve members joined in the two weeks after the announcement.

What we watched after

September margin: 72%, back above target.
Units per patient: 39, up from 38. No pullback.
Rebook at checkout: 67%, up three points. The announcement did not cost visits.
Two patients asked about the price. Both were offered the membership; one joined.

Where Benchmark came in. The margin dip showed on the scorecard in July; the unit table and the four options were built in August; the announcement, the desk sentence and the member hold were written with the team; and the three numbers above were watched for two months. This is one of the monthly initiatives in the plan, and the method is Finance 7.

See the rest of the sample area

The dashboard, goals and progress, and the value tracker.

Harbor Aesthetics is an invented clinic; every figure is illustrative. Full disclaimers.