WCA Numbers Part Three
how we decided to raise our prices
Thanks to everyone who said kind things about the last post. I hope it’s useful background for this one, which is about WCA’s prices — past, present and future. A note to new subscribers (welcome!): one of the goals for this newsletter is to create financial transparency around WCA’s, and POCA Tech’s, operations. Other posts about numbers are here, here, here, and here.
When I gave up on paid employment in public health acupuncture and decided to take my chances on working for myself, the main thing I wanted was stability. I was so, so tired of worrying about budget cuts that could erase my job with one stroke of somebody’s pen. This article, forwarded by subscriber Elizabeth Ropp, about California Governor Gavin Newsom cutting acupuncture from the state budget, brought back those memories:
The latest state budget proposal excludes acupuncture from the state-subsidized Medi-Cal services for low-income and vulnerable individuals, sparking a furious backlash from patients and the Chinese American community—especially in San Francisco...
Man Mei Cheung, a 68-year-old Chinese immigrant with a disability and chronic arthritis pain, … said her body pain situation is severe, and as a low-income disabled person living in public housing, she would take acupuncture treatment at least twice a month because it’s included in Medi-Cal benefits.
“How can I pay out of pocket for this?” Cheung said in Cantonese. “Without acupuncture, the pain will just kill me and ruin the quality of my life.”
...In response to the criticisms, Newsom’s office said in a statement that the governor had to cut many programs he’s supported before. The acupuncture cut is expected to save about $5.4 million from the General Fund.
If you haven’t worked in public health acupuncture or in a community clinic, you might not have met the people for whom acupuncture is a life-changing intervention for chronic conditions, who also can’t afford the ongoing treatment they need. In my experience, treating those people is extraordinarily motivating; they’re the cure for wondering whether acupuncture works. They’re also a demonstration of how capitalism isn’t set up to align resources with needs, particularly in healthcare 1
Here’s a short history of WCA’s prices.
In the early 2000s, my partner Skip and I had public health acupuncture jobs where we were being paid $15/hour (equivalent to $26.60 today, according to this inflation calculator). Even though our hours often didn’t add up to full time, we’d supported our household of five for the previous seven years on those wages, augmented with earnings from our tiny private practices. We knew the funding for our jobs was unstable and we needed to make other plans. The only way to earn a living as acupuncturists was to get serious about building a business. Our logic in creating a sliding scale practice went something like this:
1) The going rate for acupuncture is $60 and we know most people can’t afford that.
2) We’ve managed to get by on $15 an hour so far.
3) Instead of looking for people who could pay us $60 per treatment, what if we targeted people who could pay us $15 per treatment? Four people paying $15 each is the same as one person paying $60, right? We like treating multiple people at the same time, in the same space.
4) And if we could find four people who wanted to pay us $15 each, we could continue to treat the people who can pay little or nothing, as long as we have enough chairs and we work fast. (Because treating those people is really important to us.) If we offered a sliding scale, maybe people who wanted to —and could afford to — pay more than $15 could help offset our costs?
5) And if we got enough people to participate, the overhead for the business (which we don’t actually understand at all) should work itself out? We hope?
(Maybe we don’t need to understand it as long as it turns out okay.)
That was the sum total of our business planning.
We knew this strategy wouldn’t make sense to other acupuncturists, but it felt right to us, so we went for it. And it did turn out okay. We kept the same sliding scale of $15 to $35 for the next 17 years, while hiring other people, opening more clinics, and starting up a school. Rather than raise our prices, we focused on streamlining our operations so that we could treat as many people as possible (a strategy that Whitney of SOAP describes concisely as “butts in chairs”). Our partnerships with CODA and CareOregon stabilized our cash flow too. Finally, in late 2019, we reluctantly raised our sliding scale to $20 to $40 per treatment.
At which point we got a bunch of emails from patients saying things like, “It’s about time! We’ve been wondering how you were keeping the lights on!”
That was nice; it was also a relief to make more money. WCA always runs on a shoestring, but as the new scale took effect, we realized that our previous $15 to $35 shoestring had gotten worn down to something more like a fraying thread. The new scale gave us a fresh, clean, full-on shoestring again. (Then the pandemic hit.)
Anyway, over the last year, as inflation became harder and harder to ignore, we asked ourselves, do we need to raise our prices again? It’s been almost five years, and everything seems like it costs so much more. We’re still adding shifts back after the pandemic so we can’t be as busy (yet) as we used to be. Our shoestring is looking a bit worse for wear.
Cue: How to Solve a Problem.
We started out by acknowledging that we don’t like having this conversation. It took us 17 years to raise our prices once, obviously we don’t want to do it again! We recognized the potential for us to have a big internal fight about it, after which we’d all probably feel terrible. So we said: let’s not! Can we try accepting that we don’t like talking about this but also, we have to be able to do it? We’ll have to raise our prices someday, how will we know when if we can’t even have a conversation? Could we just work on creating a positive space to have it in?
We decided to hold a Finance Retreat. We made sure to set ourselves up for a good meeting, with plenty of time and better-than-average snacks.
In the retreat, WCA’s Finance Circle talked about what made us not want to raise our prices, which is, obviously, not wanting to turn people away. (See above: “Without acupuncture, the pain will just kill me and ruin the quality of my life.”) Somebody asked, I wonder how many patients we lost the last time we raised our prices? Hmm, no idea, we said. How could we find some information about that? Well, somebody else said, maybe we should look at how many people are paying less than $20 now. Let’s do some data mining.
We did, and wow, a lot of people are indeed paying less than $20 per treatment at WCA. So that means, the last time we raised our scale, the clinics made more money but we also didn’t turn patients away? The people who couldn’t afford the price increase just kept paying what they could afford while the overall cash flow increased? Weird! And great!
So we could do it again if we needed to, and it seems like we need to?
(We don’t need to understand it, we just need it to turn out okay.)
Starting August 1, 2024, WCA’s sliding scale will be $25 to $45. POCA Tech student clinic rates stay the same at $10 to $20. If the low end of the scale is too high for you, please let us know, we’ll work something out! We want to serve you regardless of what you can pay. Whatever you contribute, matters.
I’m sure the way WCA makes financial decisions is appalling to some people (actually I know this because they’ve told me so). All our financial decisions, though, have added up to decades of stability for the clinics and the people we serve. It’s a shoestring version of stability, heavily dependent on intuition and on giving ourselves to our problems as if we trusted them (and ourselves). Our approach wouldn’t work if enough people didn’t love community acupuncture in general and WCA in particular.
But so far, they do. And we’re grateful.
That’s a quote from my friend Dilip Babu, who’s a physician and also a WCA acupunk. Stay tuned for an interview with him about integrative medicine.
(Side-note - the cut in Acupuncture benefits through Medi-Cal did not go through.)