Eva: Welcome to the "RealSelf University" podcast. I'm Eva Sheie, your host and director of practice development at RealSelf. My guests for this episode are San Francisco plastic surgeon Dr. Jonathan Kaplan and RealSelf CEO Tom Seery.

Dr. Kaplan's not your typical plastic surgeon. He also founded his own tech company called BuildMyBod and he's done more work than anyone to advance consumer price transparency in the marketplace. RealSelf CEO Tom Seery also joined me in this conversation with Dr. Kaplan. Tom founded RealSelf in 2006, and under his leadership the company has grown to facilitate millions of doctor/patient connections each year.

Welcome to the "RealSelf University" podcast. Today, my guests are joining me from the AAFPRS meeting in San Diego, and I have with me RealSelf CEO Tom Seery and plastic surgeon Dr. Jonathan Kaplan from San Francisco. He is the founder of BuildMyBod and we've invited him today to talk about price transparency. So welcome, Dr. Kaplan, and welcome, Tom.

Dr. Kaplan: Thanks so much for having me.

Tom: It's great to be here.

Eva: And we're talking about price transparency, and Dr. Kaplan, you're well-known as the true subject matter expert in the aesthetic industry on price transparency. So, can you just give us a little background on how you got there and what inspired you to start studying why price transparency is so important to patients?

Dr. Kaplan: Sure. I finished my fellowship at Cleveland Clinic in 2007 and then I went back to Louisiana, was employed physician at a hospital doing plastic surgery, reconstructive and cosmetic, and we just always had patients coming in and, you know, not having any idea how much plastic surgery costs, or specifically the cosmetic procedures. And I remember, the one thing that really did it for me was a patient came in, we were talking about liposuction and we gave her the estimate, she's, like, "Oh, I thought it was only gonna be $300." I'm thinking, "What do I do that's $300?" I was, like, "There's gotta be a better way to educate people." And I knew that the patients calling in, the front office staff going through all the pricing wasn't a good answer because they would maybe take too long on the phone call, maybe forget a particular price. Maybe they'd forget the OR fee or the implant fee and then the patient would come in and be so upset.

So, I was, like, you know what, there's gotta be something online, like, a price estimator that somebody's developed that basically takes the fee schedule that we know every office has the fee schedule that somebody has digitized it. I know somebody's done that, and when I went online, I realized that nobody had done that. There was maybe some terrible averages and things like that, and, you know, a lot of trade organizations will post averages, but they're only, like, the surgeon's fee. It's not even complete. It's not even the OR anesthesia fee, so there was really some terrible information online back in 2007, so that's when I started thinking about this and I was, like, you know, "I'm gonna have to come up with a better way to do this."

And because I was an employed physician, I had to go to the hospital first and say, "Hey, I've got this idea. Do y'all want to run with this?" And back in 2008, 2009, I mean, considering now how hospitals have no interest in price transparency, 2008, 2009, well before the Trump executive orders, they definitely had no interest, so they turned it down, and I said, "Well, I need it in writing because y'all own the intellectual property." And so, the next contract, they signed over the intellectual property rights of the idea to me and I have that framed, the original, and locked in a safe that nobody can ever get to. No...

So, anyway, so that's how I came up with the idea of starting this. And, you know, so I've created it, digitized it. My wife had some friends from high school that were computer coders and now they're my technical cofounders with the company I started, BuildMyBod Health, and we've expanded into, you know, aesthetic practices, because that was the most obvious place to start because it's cash pay. You don't have to deal with insurance. But since then, because so many people have high-deductible health plans now that people are paying out-of-pocket for medically necessary services, so it's not even about cosmetic anymore. It's just about paying out-of-pocket, so now we've expanded into surgery centers, and doctors that provide general surgery services, or bariatric services, or gynecological services, and the consumer can check the insurance plan and see what the negotiated rate is for the surgeon's fee, the facility fee, and the anesthesia fee. Our platform does all that now in addition to the straightforward cosmetic procedures. That's my origin story.

Eva: I'm shocked that someone thought lipo was $300. Like, I'm still stuck on that.

Dr. Kaplan: You're still on that.

Eva: So, at some point, you decided to actually study their behavior around this and you did a year-long study on the subject. So, how did you set that up?

Dr. Kaplan: Right. So, you know what I realized, is that you can't go around to different meetings talking about your product. That's obviously very promotional and commercial. And I realized, you know what, when I moved to San Francisco...my wife and I moved to San Francisco in 2013 and I was, like, "You know what, this is a perfect time to do a study. I'm coming to a new community. There's eight plastic surgeons in my building. I need something that separates me," so I implemented the price transparency into my own practice. I had already been doing that in Baton Rouge but to a greater extent in San Francisco.

And so, this is, like, a great testing ground to start collecting data, and so, over the course of a year, we collected data on how many leads we were generating, how many of those people came in, how many of those people booked surgery, and I was able to get that published in the "Annals of Plastic Surgery," a peer-reviewed journal. And then now that opens up so many opportunities to go to meetings and speak because now I can speak about price transparency and my practice based on peer-reviewed, published data, and it doesn't have to be promotional at all. I do my disclosure at the beginning and everything, but it's all kosher now. I mean, similar to RealSelf, I mean, y'all are a company, but y'all speak and y'all talk about your data and it's legit.

But as far as the study goes, what we found was that, of all the people that submitted wish lists over the course of a year with really no paid marketing, because I couldn't afford it at the time when we moved to San Francisco, but of all the leads we got, 17.8% of those patients came in for a consultation. And then of those patients that came in, actually, like, 62% of them booked procedures, and so I was really happy about that, you know, they are booking.

And then, what we also looked at that was really fascinating is we compared the patients that came in for a consultation that knew price, that were price aware versus the patients that came in for a consultation, they were not price aware, that, like, had no idea how much it was gonna cost, and we found that, no surprise, but now we have it documented, that patients that are price aware are 41% more likely to book a procedure than non-price aware patients.

And it's just a great way to kind of convey that information to the doctor saying, "You know what, you don't have to waste as much time on a consultation that'll end in sticker shock," and it's really a huge patient satisfier that the patient's not coming in and bearing their deepest insecurities about their body only to find out at the end, "Oh, sorry, I can't even afford this. Like, why did I not know this before I came in here? Why could you have not at least given me a ballpark figure?" And doctors, not just cosmetic providers, but all of health care, just nobody wants to talk about pricing. They think it's too complicated. They worry if they post their price, then their competitors will know about it, but they just don't realize that it actually can make their practice so much more efficient and then obviously, if we're really all about the patient, it's a better experience for the patient.

Eva: Do you have any more academic research planned?

Dr. Kaplan: So, that's the cool thing about...when you get started with all this and you do start to get some champions who come on board, that other people start to give you some of their data. So, for example, Brad Hubbard, a plastic surgeon in Dallas, he looked at his own data and he found that, over the course of a year that...you know, I told you that 17.8% of my leads came in for a consult. Well, he found that 7% of his leads came in for a consult, so that's a lower number. I get it. But when you look at the absolute number of consults that came in because they had checked pricing first, 105 consults were specifically from his price estimator on his website, so his absolute number was huge, percentage, 7% smaller, but 105 consults, that's a lot of consults from one lead source.

So, they come in and he says over the course of six months, he followed 'em out. Over the course of 6 months, 80% of those people booked, so 80% of 105 consults booked surgery. And then, when he did the math, he found that it was $12.50 cost per lead. $12.50 is pretty low. And I know that, you know, he might've had other advertising with RealSelf, you know, potentially, and, you know, they talk about advertising costs per lead is usually $100 to $300, and correct me if I'm wrong, but that's kind of a nice range. So, even if there still is a $100 to $300 of cost for advertising to get them to his website to check pricing, at least we're not adding on another $300 or $400 on top of that. We're adding, like, a $12.50, and this is all data from him. The other thing that's cool about Dr. Hubbard's study, and stop me if I'm boring you with the numbers, okay.

Eva: Never.

Dr. Kaplan: The other thing that he found was interesting is that he looked at his top three pages on his website. Like, I think the landing page was the most visited, then the photo gallery, then his price estimator page, and it's our price estimator that's embedded into his website. So, one, two, and three, landing page, photo gallery, price estimator. Those were the most visited from top to bottom. But then, when he looked at the most time spent, it was the complete opposite. They spent the most time on the price estimator page. That was number one. They spend the second most amount of time on the photo gallery and the third most amount of time on the landing page. And not that we really know what Google is thinking these days as far as their algorithm. You know, March and June kind of crushed my traffic on my website, but luckily my revenue stayed high because of social media, but that's a whole nother topic.

Anyway, you know, if the Google algorithm is true at all, that the more time people spend on your page, the more likely you're gonna rank higher on the Google search rankings, organic rankings, so that was another stat that he was able to find for us. The other thing that he found that was really fascinating also is that he's also in charge of an aesthetic fellowship clinic. I don't know if you know that the Dallas Plastic Surgery Institute, that's the group he's with, they have their own aesthetic fellowship that's separate from the UT Southwestern fellowship. So, because he was a paying subscriber to the BuildMyBod platform, we gave him another account for his aesthetic clinic.

And that was really interesting because, you know, I've told you that 7% of the leads that he generated came in for a consult. With the aesthetic clinic, which, you know, those people are maybe a little bit more price-sensitive because they're looking at an aesthetic clinic, that what they found there is that 25% of those leads came in for a consult and 50% of those people booked surgery, so he's generating leads for his fellow's clinic, so the truth is that every fellowship program in the country should be using a price estimator of some sort because the fellows are always trying to get the cases before they go out into the real world and this is a great way to generate practice for them. But anyway, so that's Dr. Hubbard.

As far as other studies, I am actually not doing other studies, but let me clarify, I'm not really, right now, submitting any publications, but I am still generating data. I'm still writing papers. I'm getting a lot of things published in "Modern Aesthetics," which I know, Tom, you write for them every issue. I'm a contributing author there as well now. So, a lot of my data, I'm putting there rather than going through the process of being a peer-reviewed article, because, you know, fortunately or unfortunately, these scholarly journals, they don't always see marketing as an important thing to publish.

Tom: Have you ever seen a cohort analysis where if you looked at individuals who didn't see this pricing data on your website or a website and the quality of that individual in terms of their likelihood to convert versus somebody who...you know, did you ever do that separation of populations so you could get a clear read on the impact...

Dr. Kaplan: Oh, you mean, like, the people who knew about pricing before the kind of people who did not know about pricing?

Tom: Yeah.

Dr. Kaplan: So, yeah, what we found is that people are 41% more likely to book a procedure when they're price-aware versus not price-aware. And the truth is that shouldn't be so surprising or profound, but until you come up with it in a study, almost nobody really believes you.

Tom: But I would assume your peers' objections would be...and I'd love to hear what some of the objections you've...

Dr. Kaplan: Absolutely.

Tom: ...heard over time, but clearly there's a lot of concern about price shopping being the wrong variable or factor you should be making a decision around cosmetic surgery, that you're encouraging behavior of commoditizing these services.

Dr. Kaplan: Sure.

Tom: So, I'd love to hear how, if I was one of your peers saying that, how would you counter that?

Dr. Kaplan: Absolutely, I get this question all the time, absolutely. So, there's a couple things. One is, you know, they're saying, "Well, you know, if you're using a price estimator on your website, you're encouraging people to price shop." Well, one way I look at it is that patients are already calling the office asking about pricing, so what I'm suggesting is have them go to the price estimator on your website. That way they can check pricing automatically. You get contact information in return, and it's done automatically rather than them calling your front office staff and taking up all their time asking about pricing questions and then after they get the price they hang up and you get no contact information out of it. So, yes, so we're really not changing the behaviors. People are already behaving this way. They're already checking pricing. It's just a matter of, do you want them to waste your front office staff's time or not?

The other thing is that, you know, just because we're talking about pricing doesn't mean we're trying to be the least expensive or that we're trying to compete on price, not at all. I'm just saying that you use pricing as the carrot to get them into your sales funnel. And so, when they check the price, you might end up being the most expensive. Nobody said you had to be the least expensive. And the other thing is, just because somebody's checking price doesn't make them a price shopper just like we wanna know how much a car costs before we go to the dealership or how much a house costs before we go to the open house. There's nothing wrong with knowing the price. And if you can get that information to the patient in a way that's automated and quick and it is clear that it's an estimate, then it's better for the patient, better for the practice.

Tom: So, for your peers who... I've talked to many doctors who've stated that it's really challenging to provide a price. There's a lot of factors that go into surgical, including things like, "Do I wanna deal with this patient?" I've heard that one, you know? "How much do I want to deal with them? Do I price matter my practice because I just don't wanna see that patient?" That's an example I've been given. Can you expound upon that a bit?

Dr. Kaplan: Sure, absolutely. So, yeah, no, I've definitely heard those objections before. And the thing is, as far as, like, giving them an estimate that is accurate, an accurate estimate. I know it sounds a little bit of an oxymoron, but the thing is, like, you know, somebody will say to me today even, "Well, you know, my rhinoplasties, sometimes I'll just do a tip rhinoplasty. I'll just do dorsal hump rhinoplasty. I'll do a septoplasty and a rhinoplasty." So, what I explain to them is that that's the beauty of our price estimator, is you can stratify. You can list all of those procedures. If we're talking about thread lifts, you can do small, medium, or a large thread lift.

And the thing is, even if the patient chooses the wrong thing, because there's that education gap, they don't know what they necessarily need, even if they choose the wrong thing, they still, on my website at least with a price estimator, they still have to submit a wish list with their contact information and so the office staff gets their contact information and then follows up with that patient and says, "Hey, we saw you're interested in a tip rhinoplasty." And then the person will say on the phone, "Oh, well, yeah, I've had 12 revisions," and then that's a great opportunity for the front office staff to have that conversation, educate them saying that, you know, that price might not be exactly right for you. It's the same educational process that every front office staff should be having, but now you have their contact information to educate them on that and then you have that conversation before, they come in with unreasonable expectations.

So, as far as like the different complexities of cosmetic surgery, I don't buy it because I've just given an answer of how you can handle that. The other reason I don't buy it is that even if you don't agree with Obamacare, one of the things they developed was healthcare.gov and what that does is that allows people to go on and shop around for their insurance plan, whether it's the Bronze, Silver, Gold, or Platinum plan with all these different insurance companies, that's different by region, different by state. That's complexity and it shows you the different deductibles and the out-of-pocket maximums. That's complexity. Whether you're getting a rhinoplasty with or without a septoplasty, it's just not that complicated. And I know they don't wanna hear that, but that's the truth. It's, like, in their mind it might be complicated.

The other reason, and this is a little bit nefarious, I guess is the right word. This is a little bit of a nefarious reason people don't wanna do price transparency. I had a person, we were actually in San Diego. It was somebody in this area. Not gonna name names, but it was somebody in this area that was using our platform and he had breast augmentation listed as one of his procedures, and somebody submitted a wish list, they came in and they booked it. And so, when he emails me and he kind of, like, I'm reading that, that those things happened, that somebody submitted a wish list. They came in, they booked the procedure. I'm thinking he's gonna thank me.

And he says, "But it was somebody that I clearly could've charged more for this procedure because of the way she was dressed and the jewelry she was wearing, and so I want to take down that procedure off of my price estimator because now..." Essentially, what he was saying is that he can't socioeconomically profile his patients, which, that's not a problem with our platform. That's not a problem with health care. That's a problem with how you were raised. That's a completely different issue. And I know that people may want to charge people different things, but I was just surprised, aside from that not being, obviously, not a gentlemanly thing to do, but I was just surprised he documented all that in an email to me. Kind of crazy. Does anything surprise you anymore though in this business?

Tom: I think, just, like, the news cycle, I get surprised. So, yeah, I still have room for surprise. I came from the online travel industry and then travel and one of the principles in travel is yield management, you know, changing your prices based on occupancy rate of this hotel we're in here in San Diego. I've always been curious, as doctors look at their business, how they don't also aspire for, "Well, when I'm really busy, I should maybe, you know, yield up. When I'm quite or off-hours or, you know, shoulder seasons, make my prices more favorable." First of all, I'd love to hear your thoughts on that construct and whether it would work in medicine and in cosmetic surgery and then how would that work in a world of transparency where the prices are fluctuating based on demand.

Dr. Kaplan: Right, so you're talking about surge pricing basically.

Tom: Yeah, it could.

Dr. Kaplan: You're talking about Uber and Lyft surge pricing. I've definitely thought about this, and I'm not gonna say if we are or not working on that, but it's something that we've definitely thought about. And I am very much aware of the fact that you're applying some economic factors to a very personal set of circumstances, so I'm not ignorant of that, but, you know, it's not really that much different. What I'm talking about is more automated as far as surge pricing, but it's really not that much different than when a doctor gets more mature in their practice, their more sophisticated clientele, they raise their prices. They're just doing it in a more manual, long-term setting. What you're talking about and what I'm talking about is more of a on-the-fly kind of adjustment in pricing.

Tom: Yeah, or even just reflecting seasonality, you know...

Dr. Kaplan: Seasonality, absolutely.

Tom: ...which is a very pronounced pattern in this world of aesthetics.

Dr. Kaplan: Absolutely. Although, it was interesting, I found that usually April is the busiest time of year for me this year because of the change in the tax code. Fewer people were getting a big tax refund check. They were getting more money all along during each paycheck. They're just getting not as much of a refund check or not at all. And so, what I found is that my peak wasn't as high in April, but my valleys weren't as low the rest of the months either. So, I agree with you, there's definitely seasonality, but I just wanted to point out that it was kind of interesting to me to notice that, for me, this year, instead of being peaks and valleys, it's been more moderate and overall the trajectory is going up. But absolutely, the idea of subjecting cosmetic prices to those kind of surge economics is a thing out there and people are obviously thinking about it.

Tom: One of the data points that we have on our platform as consumers, the number one barrier to moving forward in cosmetic procedures, both nonsurgical and surgical, with that 58% of those samples that we just recently gathered said that the number one factor preventing them from moving forward was affordability, saving up the money for a procedure. These are expensive. Relative to all the other discretionary decisions we make in life, these are very expensive, and also, there's a lot of risk factors that people went into this decision. You know, you're the guru of pricing, what do you think a consumer believes when they're looking at that price, and what do you have to do to educate them to understand it better? Because if I'm just concluding as a consumer, "Well, this is just so you can pay for your country club, your kid's private school, and your next Maserati," that's probably not the best position to be in. Can you just go into that [crosstalk 00:20:18]?

Dr. Kaplan: Absolutely, and that actually brings me back, reminds me of another question you asked me that I wanted to touch on, is that when it comes to pricing, is that you were saying, is that really the most important thing that the patient should be considering? You know, what about board certification, things like that? And what I always tell people is that pricing is absolutely not the only pain point. It's definitely not the only pain point, board certification, experience, getting time off. Those are the other pain points. My argument though is pricing is the ultimate pain point. It is the one without, they will not be able to do it. They can get time off. If they can't get the financing, if they don't have the money, they're just not gonna be able to do it.

Now, what you bring up about, you know, people, like, what they're paying for, that is actually more complicated in the age of social media. So, for me, social media, I'm on Instagram. I do Instagram stories a lot. I show the surgeries during the day with the patients that, you know, sign the waver. And then, in the afternoon, in the evenings, I show some of my home life, of my home life I wanna show. And if I ever had a Maserati or I ever had a Ferrari, that's one of the things, mental note, is I would never show that. And anything life experience, I show them. I'm showing people something that I think that they would either find interesting or something that they could do.

Like, if I go on a trip to Hawaii, other people could go on a trip to Hawaii, but I don't necessarily show them whether I'm sitting in first class or not. So, I do want to be approachable on social media so that when people see that number, they maybe feel more comfortable. And the truth is people are watching me for three, five, six months a year, so they do really know me well enough to know, "Well, oh, yeah, he's kind of a normal guy," which is the way I wanna portray myself because I really do feel that way. But yeah, we try not to make it look like they're paying for all these other expensive things.

The other thing that I do and that I think takes transparency to another level is that if they're looking at a mommy makeover, when they put in that they wanna the price of a mommy makeover, they put in their contact information, that email is generated and it goes out to them. It goes out to our front office staff. We just don't say, "Mommy makeover, $15,000." We actually break it down into the surgeon's fee, the OR fee, the anesthesia fee, the implants, the cosmetic insurance, the garments, so that kind of speaks to your point that they've kind of, in a sense, know what it's going towards. Now, they don't necessarily know that it's going to my nurse who's making X dollars an hour, but by breaking down that transparency, we're taking it to another level, so they really see what each factor is going towards rather than just, like, this black box with this one big number, and I think that's a really important part of transparency too, is not just selling the price but telling them where everything is going.

Tom: How important do you think it is for surgeons to be offering multiple options to that consumer who doesn't have the money, financing, and so forth? Do you think that's something that is important for your peers and your practices to do or is it just that cosmetic surgery maybe is not attainable for a population and it's, don't stick them into plans are going to give them 26% interest rates?

Dr. Kaplan: Yeah. I guess I'm a little bit more conservative on that end that I do feel like people have a personal responsibility for the decisions they make. And when we sit down with them, we talk about financing. You know, you might think somebody doesn't have the money, but maybe they just got a settlement. Maybe some family member is gonna give them some money. Maybe they're just going through one of the four, five different financing plans we offer. And we tell them about all the percentage rates and we let 'em know that, you know, this is six months no interest, but then after that, if you don't pay it off, it's gonna go up high. So, we are just transparent about those financing charges, and I don't believe that, certainly nobody needs cosmetic surgery, so we're definitely not trying to convince people that they need to get it or that they should go broke trying to do it, but all we can do is offer them what we can do safely, what we think that they can get a big improvement from, what they'll be happy with, and then go over all those financing charges, all those details that are important, but they ultimately make that decision.

So, one of the other things I've talked to you about, like, my own statistical data from my practice. I talked about Dr. Hubbard's data and from his practice and from his aesthetic clinic. But just to kind of show you how price transparency is for all of health care, I have a multispecialty clinic that does bariatric surgery and general surgery and gynecology, they have price estimators on their website and they just submitted a paper to the "American Journal of Surgery," statistically...I think you get that journal, don't you, Tom?

Tom: Yeah, yeah. It's one of my favorites on weekends.

Dr. Kaplan: Oh, but they submitted a paper and it was a great paper because it has nothing to do with cosmetics essentially. It was just all about medically necessary elective procedures that will probably be paid out-of-pocket because they haven't met their deductible. I mean, this topic is more than just cosmetics is the point I'm making. But anyway, one of those data points they found in their study was that, of all the people...it was, like, three months that they ran their study for and they got 98 unique leads of people submitting a wish lists checking pricing, so some of those people might've submitted more than one wish list, but 98 unique individuals over the course of three months were submitting wish lists to check pricing on bariatric surgery, general surgery, gynecological services, and 21 of those people who submitted wish lists came in and all 100% of them booked a procedure. It was really interesting.

And so, this is, like...we're not even talking about cosmetics anymore. Everybody is so thirsty for price transparency and it is a huge market of patients to make very happy providing them a good transparency. And that's one of the things, like, with the surgery centers that don't just offer bundled rates or cash pricing, we are able to allow the consumer to check negotiated rates based on their insurance plan and everything, so it's very flexible and nimble kind of a technology.

Anyway, so another topic I wanted to talk about if you don't mind is the same thing you see with every practice, cosmetic practice I'm talking about now, is that we all do the same thing and it's just this dogmatic approach that we all have and I don't know why, but when a patient comes in for a consultation and they decide they wanna get, like, a bunch of nonsurgical services or a surgical service, you book them for another day when you have time to do that. You know, you book them in the operating room. You book another day when all the different devices are available if it's nonsurgical.

And what the doctors do is they take a deposit and then they say, "All right, the rest of the balance will be due two weeks before," and it's just amazing to me that we've all continued to do this. I used to do it too, is that two weeks before, you then have to have another conversation about all the pricing. You have to try and track down the patient. You call 'em and to get the balance, and maybe the phone number's wrong. Maybe they don't answer. Maybe you're playing phone tag. Maybe they give you a credit card and the credit card is declined. And it is just this really frustrating experience that every doctor's office does two weeks before the procedure to get the balance. So, what I said, "You know what, I'm tired of this. I've had enough of it. I wanna find a way to get patients to book and pay in full at the time of their consultation." Get it all done. Just take care of it.

And so, what I found, I came up with these five pillars of transparency. So, basically, it all deals with educating the patient as much as possible before they come in for the consultation so they're ready to go. One of them is social media. Get them to know who you are in the operating room and outside the operating room, inside your clinic and outside your clinic. Provide a lot of educational videos on YouTube and other services, RealSelf, things like that. Blogging, doctors always get frustrated the patients are reading all of these things online that, you know, it's bad information.

Well, you gotta give them a replacement. You gotta give them something instead. So, blog. Document some things on your website. Write some things on your website that is good information. You gotta tell them the pricing ahead of time, because if you want them to book and pay in full at the time of the consultation, they have to know how much it costs. They have to have their financing in order. And then, also, email marketing, so that way you can kind of have a month-to-month, staying in touch, touchpoints throughout the year so that by the time the patient comes in, they are fully informed and they know what's going on.

And so, what you can do once they come in for the consultation is you offer them an incentive to book and pay in full at that time. Because the reason you wanna do all those things, those five pillars, is that you don't want them to just, like, "Oh, I'm just gonna get this incentive and them I'm gonna have buyer's remorse." You don't want that. You want them to be fully informed. So, what we do is we give 'em a discount on the surgical fee. Other people could say, "Oh, we'll give you a free syringe," or something, to get them to book and pay in full.

The point I'm getting to is that once we've started that, that we did a study based on that and we found that, of all the patients that came in for a surgical consultation, that 72% of them booked and paid in full at the time of consultation. So, I want you to imagine that all of the calls you're trying to make two weeks before the procedure, trying to get in touch with that person, playing phone tag like I said, and then erase 72% of that frustration and it's, like, it's a totally different experience. It makes me happier. It makes my front office staff happier. I mean, the whole price transparency thing, it's such an opportunity that doctors are still stuck on this thing, "Oh, we can't tell them the price ahead of time and they're ignoring all the potential benefits."

Tom: Yeah, I was just thinking back to some objections, and one that I've heard in conference settings is, "Well, my staff is really well-trained at handling those inbound inquiries and can help them understand why the prices are what they are, so we really wanna get those phone calls, and we can manage those and they're really important. If it's just on the internet, you know, anywhere on the web, it just takes away that unique opportunity," and I just would love to hear what you would say to your peer who runs that.

Dr. Kaplan: Right, absolutely. So, that's the thing, is that, you know, you can look online. The patients can look online and find averages, U.S. averages or regional averages. You know, that's fine. That is decent information. But if the consumer wants to know what that doctor charges, they have to contact that doctor. And so you can have either 10 people that are ready to call and make that phone call and ask the front office staff how much it costs or you can have 100 people that are more willing to go online and automatically check pricing from that doctor's website. It's a numbers game.

I mean, I don't think I have to prove it to anybody that you're gonna have way more people up at the top of that funnel just starting their research that are gonna be much more willing to automatically submit a wish list, but more importantly, and I can't stress this enough, is that the benefit of getting those hundred people is getting their contact information, building your own email database, because as we know, with your money or your life, you Google Update in March, then again in June, it can really affect your web traffic, and if you have no email database, your hands are empty. But if you've been really emphasizing email generation, lead growth, and things like that, you're gonna end up with a huge email database.

Like, I got to San Francisco six years ago. I had 200 email addresses. Now, I've got over 9,600. So, if Google affects me or Instagram affects me, which, you know, algorithms are changing all the time, I can then email all the people that I have in my database that I know are interested in my services, so that's what I would say to those doctors that say, "Oh, our office staff is better at it." They have to look at the bigger picture. They need more leads. They need to protect themselves, and there's no better call-to-action button than get a quote now.

Eva: I heard once there was something, like, 6,500 plastic surgeons in San Francisco Proper, which is what, 8 square miles?

Dr. Kaplan: Seven square miles.

Eva: Seven square miles?

Dr. Kaplan: Yeah.

Eva: It's probably more now.

Dr. Kaplan: I don't really know the number. I just know there's eight in my building.

Eva: There's eight in your building.

Dr. Kaplan: And three of us have an operating room. So, when I took over this practice six years ago, I was thinking, "Oh, I got my won operating room. That's a great marketing edge." Oh, except for the other two guys down the hall.

Tom: You know, being in San Francisco, you're in the heart of tech, and I'm just wondering, your own observation, I don't wanna bias you with my views on this, but as you look at millennials and the next generation of patients, how do they wanna interact with the office, by what format, what vehicle? Because you and I have been talking a lot about phone calls, which makes us sound kind of a little older, I think, but sorry, my bias just crept in a little bit, but I'd love to hear you talk about, generationally, where things are going.

Dr. Kaplan: No, you're hitting to the heart of the matter. So, I sent out an email newsletter at the beginning of September to, like, 9,600, 9,700 people and then I looked at the heatmap after so I can see, you know, what people click on in all the different links that I have, and one of the highest links that people clicked on was, "Text the office now."

Tom: That's right.

Dr. Kaplan: That says it all, and then, you know, clicking on checking pricing, that was really high as well. But texting is huge. People love the ability to text. The other thing I would say, and this is sort of a version of texting, is Instagram direct messaging. We get a lot of patients through Instagram direct messaging asking us about price. We send them a link to the check the price and then we get their contact information, and then we're able to connect that Instagram handle with their contact information, because their Instagram handle, the example I always use from Louisiana is Sexy Cajun Diva. That's their Instagram handle. You have no idea who that is, but once they submit a wish list, you've got their name, email address, phone number, city, state, and ZIP code.

But yeah, definitely, text, Instagram direct messaging, and it might be a little bit different, you know, maybe for somebody that's doing facelifts. That's an older generation. But I think even they like text as well. They might not be using Instagram direct messaging, but they might be using Facebook messenger. That's probably the distinction with that generation, that older generation. But if you don't have text messaging available in your practice yet, you gotta get it. And what we did is we got rid of our regular desk phones and now we have a software that we use with the computers that the girls at the front desk have a headset with Bluetooth and they make the phone calls through the computer, through this software, and that same phone number that everybody calls into our office, you can text that same number too. Even though that's always been a land line, they can use that same number as a text messaging portal.

Tom: How do you handle...since text messaging allows people probably to be a little bit bolder and, you know, a little less cautious of how they communicate compared to the phone? Do you see more individuals coming forward saying, "I'd like a discount. How about a price break?" Do you see more of that nature in those channels?

Dr. Kaplan: Yeah, I mean, we definitely see that. I don't know about if I see it more. We definitely see that either way, but people ask about military discounts or employee discounts because they're employees of the hospital next door or something like that. I definitely feel like there's a lot more emojis with texting. Nobody's really acting out their emojis when they call, but it definitely is a much more relaxed conversation via text and people are just so appreciative that you text them back. I mean, if we're talking about patient satisfiers, yeah, there's price transparency, but just texting. Being approachable. Being easy to get in touch with. I mean, it's like the same thing that's always been said, the same cliché, you know, to be a successful doctor, be available, be affable, be able, well, be available is still true just in a different way with texting and all.

Tom: So, where do you think, 5, 10 years from now, assuming you're still practicing, you haven't gone off and retired, become a full-time author or an entrepreneur in some other pursuit, what do you think is gonna be different in your practice that's just, you know, something maybe you're just starting to see come into sharp focus or into focus now?

Dr. Kaplan: Yeah, I think one thing is just, like, a decade, well, two decades ago, liposuction was, like, this bad thing that you shouldn't be doing and now it's, like, very common. Brazilian butt lifts, things like that, you know, everybody's kind of bad mouthing that, but as more research is done and safer techniques come up, that's gonna be a standard thing that people are doing. I'm doing that now, but I think that'll be a busier part of my practice going into the future. And also, as far as, like, how people would be interacting, I think there'll be a lot more of Instagram direct messaging. I think there's gonna be a lot less patients calling. I think your website will be a lot less important from the perspective of education. I think it's more gonna be just all about lead generation. Like, wherever they're learning about you, you just have as many portals available on your website to capture that person's contact information. I don't know if I'm gonna be so bold just to say that the website's gonna go from 10 pages to 1 page, but I think it's going in that direction.

Tom: Perhaps maybe a page per channel, for instance, appropriate landing page for Instagram for instance.

Dr. Kaplan: Correct. Correct. And it's like have one of those link trees where it goes to each individual page, right. You know, I still blog because it gives me an opportunity to give patients something good to read, but if that's not gonna help me as much in the future for an SEO perspective, then the patients may not be coming to my website to read my blog posts, but they'll at least be landing on there to check pricing and that'll capture them in that sense.

Tom: Or podcasting.

Dr. Kaplan: Or podcasting. I tried podcasting for BuildMyBod. We did podcasting a few years ago. We did about 28 episodes. But after a while, I got tired of talking about plastic surgery and so I started to try to do a little bit more investigative journalism and I tried get Sientra to talk to me about, you know, after they had their implants taken off the market, and they're back and everything's fine now, but I wanted to talk to them about going through that process, and they were really interested in going on the record about that.

I tried to talk to a hospital CFO about price transparency. He was not interested in talking about that. So, I quit because it became not as interesting to me because I really didn't wanna talk about plastics. One of my favorite podcasts though was from a general surgeon that I worked with in residency and he lives in a small, rural community in Louisiana, and when I call him on the podcast and say, "Hey, how's it going?" This is all part of the recording. He's, like, "Yeah, I'm just making a holster for my handgun." And I was, like, "Okay, we're keeping that in the podcast," that people need to know, this is a general surgeon making a holster. Like, he could easily go out and buy a holster, but he's making his own. But yeah, I tried podcasting, so hopefully y'all enjoy it.

Tom: One of the things you haven't mentioned on the reputation management front is patient reviews. And you live in the heart of Yelp land, and I've heard from San Francisco surgeons that Yelp is a big deal in San Francisco where in other cities...

Dr. Kaplan: Google maybe is bigger.

Tom: It may be or some other platform. Can you talk a bit about how Yelp affects your practice, how you think about online reviews, and just a little bit of that?

Dr. Kaplan: Yeah. I mean, Yelp is awful. People hate Yelp. I mean, business owners hate Yelp. I'm not gonna hold back on this. The thing that I think frustrates people the most about Yelp, and I don't think doctors really have an issue with consumers having an opinion and writing a review, but the thing that Yelp does, it's so dishonest, is that they have this algorithm that filters out reviews and people don't really understand this. So, like, you can go to my page and I have, like, 75 reviews, I have four-and-a-half stars, so I'm good in that respect, but if you scroll down the page further, it'll say filtered reviews and there's, like, 60 filtered reviews.

And what they'll do is if it's somebody's first review and they didn't check in when they're at your office and they write you a five-star review, they'll filter it. They'll say, "Oh, it's not credible. We don't know who this person is." But there's also been somebody that wrote me a one-star review that only had one review and they keep it and that's unfiltered. They keep that live, and that's really frustrating. And, of course, the patient was blaming me for something that they did or whatever. But anyway, so it's very frustrating with Yelp because they're not even-handed. You know, people can seem uncredible with one review, but if it's a one-star review, they'll keep it, and if it's a five-star review, they'll filter it, so that's what's so frustrating about Yelp. I don't pay them for any advertising.

And that's the other thing, is I did pay them for advertising when I first got to San Francisco for, like, six months because people said, "Oh, Yelp is really important," but you pay 'em and they don't help you with the one-star reviews, and so I'm, like, "What am I paying you for then?" You know? So, Yelp is awful. The thing...and I know a lot of people will disagree with me about this, but when it comes to reviews, I don't answer any of 'em online. Offline, absolutely, I address them all, good and bad. But online, I don't address any reviews because, one, if it's a bad review, if I try to say something to them online, I feel like I can't really win the argument, and maybe that's not really the right approach. Maybe I shouldn't be trying to win the argument. I just feel like it's a losing battle trying to do anything online when it's a negative atmosphere, so I don't respond to those.

And then, I also don't respond to the five-star reviews because if I respond and say thanks to the five-star reviews but I don't respond to the one-star reviews, people will say, "Well, I guess that one-star review was true. He didn't respond to it." So, I don't respond to any of 'em online. I call the one-star reviews offline, try to talk to 'em. But at that point, we really have talked to them a lot, and every patient, after I operate on them, I call 'em and check on them that night. They have my cell phone number. You know, if they feel like they can't communicate with me with my cell phone number and they have to take it out on Yelp, then that's a whole nother issue, so I don't respond to any Yelp reviews. But luckily, we have four-and-a-half stars. We wanna keep it there and keep just treating people right. And it does really help. I'd absolutely believe that having a few bad reviews makes it look much more credible than just having all five-star reviews.

Tom: One of the data points that is from a national perspective, not just looking at San Francisco is that...and this is self-serving, okay?

Dr. Kaplan: Yeah, fair enough.

Tom: Just is, seventy-three percent of people we've surveyed on our platform who are nonmembers, not people who've become RealSelfers and are really into it, said they trust RealSelf more than Yelp, which we love to talk about.

Dr. Kaplan: That's great.

Tom: And it may be one of the factors you're describing, which is consumers are sort of caught up in, "Well, what's up with this filter thing and all that?" But I still wanna go back to, why is it...so it seems in San Francisco that stat wouldn't hold up, that the trust must be there with Yelp. Otherwise, you would've said to me, "Yelp is irrelevant. Let's move on, Tom."

Dr. Kaplan: Yeah, yeah, it's definitely not irrelevant. Maybe it's just because they were the first. They've been around the longest. And, you know, in other places where Google is more ubiquitous, that Google can have a stronger footing, but I think just Yelp's been around since the mid-2000s.

Tom: It started in San Francisco.

Dr. Kaplan: Started in San Francisco, of course, and they're still around. And I don't know how they do it, but they still have people paying for advertising. I have seen a stat that they have a very high rate of people not renewing after the first year. You know, these are small mom and pop operations, small businesses. I mean, I consider what I have as a small business. And after that first year, there's a high rate of people not renewing their Yelp payments or their bribes. But I think it's just because they've been there so long and people are just used to doing it, because even I use Yelp to see what time somebody is open 'til. Like, you know, a restaurant, I mean, it's super convenient to find that, and so I think it's that convenience. The other thing they've done that's smart is that they bought Grubhub and so it was a very natural collaboration, that if you're looking up what time a restaurant's open, "Well, maybe I don't even need to go to that restaurant. I'll just order it online and they'll deliver it."

Tom: Actually, I was just gonna ask you, it's a great segue into online booking. What are your thoughts? You seem to be very open to modernizing your approach to the patient and prospective patient. What about online booking? Would you be willing to allow a patient to go direct booking into your calendar for a consultation? Just, can you talk to me about that?

Dr. Kaplan: Absolutely. I love it. Totally, 100% all for it. We have a software that we use. So, this is one of the things that's cool about moving to San Francisco six years ago, is that every business you go into, they're doing something new and different even if it's not medical. For example, I walk into the salon to get my hair done...and actually, I didn't even walk in yet. I went on Yelp to find a place to get my hair cut near where I live and they had online booking, and I was, like, "Oh my god, that's really convenient." I booked it. We're still friends with the people who run the salon. They're great.

And when I got there, I was, like, "What kind of online booking software do you use?" And they told me, it was called Salon Transcripts. It's for a salon, STX, and that's what I purchased. I bought Salon Transcripts. I used it in my office, and it makes perfect sense because it's true online booking, which I'll get back to what that means in a second, but then they also deal with loyalty rewards programs. They deal with your product inventory. So, for a salon, that makes sense. For a cosmetic practice, that makes sense too. You got all the skincare products that you're trying to keep track of, your purchase orders and things like that.

But the reason I really like their online booking is, compared to Zocdoc, and I've got no dog in that fight with Zocdoc, but Zocdoc is a fraud in the sense that they talk about their online booking, but they're really not. You go on to Zocdoc or the widget on the doctor's website and you click an appointment, that sends an email to the doctor's office saying, "This person requested 2:00." There's absolutely no connection to their actual schedule, and so then they call back and they say, "Oh, well, you know what, 2:00 just got taken." You're essentially lying to the patient right off the bat, "2:00 just got taken. How about 3:30?" And then, you see. So, that's not online booking. That's just generating an email. But STX, Salon Transcripts, that's the calendar we use on our desktop at the front desk, so when somebody books an appointment online, they go right into that spot.

Now, the other caveat is that we then call that patient, and if we didn't get enough information through their booking of, like, what they're coming for, we do ask them what they're coming for, but also, everybody pays a consult fee. So, we call 'em and we say, "It's $100 for a consult fee," and they either pay it or they don't, and if they don't, then they're taken off the schedule. So, we do follow up with everybody, but it is still really convenient to have online booking. I used one in my presentation earlier today. I used an example of a patient who uses Instagram direct messaging, asks us how much something costs. We give her a link to our website to check pricing. We get her contact information, and then in that same Instagram direct message, she says, "I'd like to schedule a consultation." We send her a link to our online booking portal. She books online. We do a FaceTime consult and she books and pays in full, and this is all, you know, digitally. She never called. She never had to call. Everything was done, and that's great patient satisfaction. So, obviously, I'm a huge fan of online booking.

Tom: Yeah, I like the way you articulate that ecosystem and, overall, never a call.

Dr. Kaplan: Never a call.

Tom: That's fascinating.

Dr. Kaplan: And it's okay, and that is okay. But, I mean, do you feel like people are still giving you pushback, that, like, they're still bemoaning the fact that patients use reviews to make decisions and things like that? I mean, I think that horse is kind of out of the barn now, right?

Tom: I think facial plastic surgeons have a lot of sensitivity still around the fact that they do high-risk cases, they get penalized for taking a difficult case, and many are rightfully so concerned about their practices sort of have to go to, you know, the simple cases and give up on ones they normally would've taken if they didn't have people posting online. But I would argue reviews have become so common and so commonplace that the pushback I hear is mostly from individuals who are pretty worthy of getting this scrutiny...

Dr. Kaplan: It's a nice way to say it.

Tom: ...or relatively exposed, because they just haven't gone on in. They didn't make it part of their practice protocol, to make sure patient reviews were happening. In Canada, there's challenges in other countries where you're not even supposed to solicit a review, so everywhere is a bit nuanced, but I think it's...

Eva: I uncovered a problem this year where we kept teaching, you need to ask, you need to ask, and everyone started asking and doing a really nice job asking, but then they were all asking when people were on their way out the door, so then everyone started telling us, "We ask, but they don't do it."

Dr. Kaplan: Right, they're already on their way out. I thought you were gonna tell me that they're out also asking the patients that weren't particularly happy and then they were encouraging bad reviews.

Eva: Well, there's that too. If you don't ask everyone, then you just end up with...

Dr. Kaplan: The one trick that I've learned, and I'm not saying that not everybody else knows this, but from somebody that used to work at Yelp, that the only trigger I can offer somebody is that when they're there and you're asking them, ask them to open up the app and check in. They don't have to write the review right then, but they've got to check in while they're there. And then, even if it is their first review, they'll stick. They won't be filtered out. Checking in is huge.

Eva: I'm pretty proud of myself right now. I knew that one.

Dr. Kaplan: You knew that one.

Eva: I did. I mean, I want people to write reviews on RealSelf.

Dr. Kaplan: Of course, right, of course. And that's great. That is really great. That's really flattering that a higher percentage, they trust the reviews on RealSelf. That's a great stat.

Tom: I think the style of the longer format, sharing your journey just engenders greater trust.

Dr. Kaplan: Absolutely.

Eva: The other thing is you have to look at the source of your traffic in Google Analytics and see where your traffic's coming from because there is not a lot coming from Yelp, or from Healthgrades, or from Vitals, or from RateMDs. So people aren't coming in to the office and saying, "I found you on Healthgrades," and yet we have this finite number of patients and we try to send them to all these different sites instead of focusing on where we're actually getting traction.

Dr. Kaplan: Absolutely.

Eva: So, being more strategic about that consideration instead of where you're gonna send people to write reviews, at this point, I think it's pretty simple. It's RealSelf, Yelp, and Google.

Dr. Kaplan: Yeah, I'll take somebody out to dinner if they tell me they got a referral from Healthgrades.

Eva: I know, right? Exactly.

Dr. Kaplan: They can choose the restaurant.

Eva: So, before we kind of wrap this up, there is one question that we ask every guest and it is, what is your superpower?

Dr. Kaplan: Oh, that's easy, stubbornness.

Eva: Oh, interesting.

Dr. Kaplan: In regards to price transparency, that one thing that really has surprised me is that the resistance to it after all these years.

Eva: I know.

Dr. Kaplan: And, I mean, like, President Trump has written executive orders on it. This is coming down the pike. This is happening and people just bury their heads in the sand and just think, "Oh, we don't have to deal with it." And it's funny because the people that are dealing with insurance, they go, "Oh, it's too complex to deal with the insurance price transparency, so we don't have to do it," and the cosmetic people say, "Oh, it's too complex to explain whether they need this type of nose job or that, so we don't have to do it." Everybody thinks they don't have to do it, but I have news for everybody, they all have to do it. They're all going to do it, and why? Not because the government is saying you have to, but the consumer is gonna demand it.

Tom: I've always respected you and thought of you as one of the most resilient individuals and believers in something that ultimately is good for the market, good for consumers, and so I encourage you to keep that superpower going because I think you're breaking through. It's gonna happen.

Dr. Kaplan: Thanks. And I feel like maybe resilient actually has a better connotation than stubbornness. I like your word better...

Tom: Take it, it's all yours. I used that word at our company standup recently.

Eva: Resilience?

Tom: Resilience and encourage, and later I looked and said 2019, the word of the year is resilience.

Dr. Kaplan: Oh, really?

Tom: And so, oh, I thought it was original thought.

Eva: It came from somewhere.

Dr. Kaplan: Well, great. Well, thank y'all so much for having me. This has been great. Great talking to you both.

Tom: Thank you for sharing so much.

Eva: Thank you, Dr. Kaplan.

Tom: Thank you, Dr. Kaplan.

Eva: Thanks for listening to the "RealSelf University" podcast. The mission of RealSelf is to create a world where every investment in modern beauty is worth it and the mission of RealSelf University is to help aesthetic professionals do just that. The mission of this podcast is to uncover stories and data from our industry's most interesting and successful personalities. If you'd like more information about becoming RealSelf-verified, go to realself.com/network and enter referral code PODCAST to receive preferred rates.

I'm your host and producer, Eva Sheie. Our postproduction is by Daniel Cruzer. If you'd like to be a guest on the "RealSelf University" podcast, have feedback or questions, email me at university@realself.com. Support us and help us keep this effort going by subscribing to our podcast on Apple Podcasts, Spotify, or wherever you get your podcasts. All of our learning and practice development resources are available on-demand at university.realself.com.