Going Cash… Is this Really the Answer?

by Bharon Hoag – Executive Director of the Ohio State Chiropractic Association

Over the last several years there has been a trend in which consultants and speakers at professional events are proclaiming that a physician’s only chance of survival is to establish a cash practice. One speaker even stated that if a doctor accepts insurance payments, he is actually trying to serve two masters; apparently implying that if you accommodate the insurance company, you essentially compromise the interests of your patient.

Although there are a number of issues involved, the key ones are the reasons why a practitioner would choose to “go cash.” I have no problem with cash practices and in fact, there are situations in which going cash is the right answer. One problem stems from the fact that by nature, humans tend to run from what they don’t understand. Few of us have the drive to master or understand all environments. Rather, we conform to situations and surroundings that provide comfort and make us feel better about ourselves.  The solution would seem to be to find your comfort level and use it as your basis.

Finding your comfort level

The challenge is to be sure you make an educated decision. Many consultants maintain that dealing with insurance providers takes you off-purpose; that it can influence doctors to treat patients based on their coverage rather than their need. Indeed, some doctors do this, and it is not appropriate.

Another problem lies in the fact most doctors and their staffs are inadequately trained in running the financial affairs of a practice.  The reality is that when you graduate from Chiropractic College you are a well-trained physician, not a business person. Nevertheless, when you open a practice you are expected know the in’s and out’s of running a business –but where did that knowledge come from?

Very quickly, you realize that you need to know what insurance groups you should be a part of. You need to know exactly what the insurance companies want. You’re supposed to know how to verify your patients’ insurance. You’re supposed to know how to communicate that coverage to your patient. In fact, you really don’t know how to do any of it. All you want to do is treat your patients and get them well, as you know you can.

Available options

The logical thing to do is hire an insurance person. Another problem? You look for someone that has experience, figuring they can train you and you will not have to worry about that part of the practice. But since you don’t know that side of the practice you can have no idea if the person you hire is capable and later, if they are doing a good job. You put your livelihood in his/her hands and hope. Doing practice analyses, I found in a few offices that the staff insurance person had been siphoning off money from the practice. The doctor had no idea because he/she did not understand what the staff person was doing.

Alternatively, the practice engages an outside billing company and then finds that it is little more than a glorified post office: the doctor is still responsible for communicating the insurance procedures to patients and fighting insurers for claims with little or no understanding of the processes involved.

What is the answer: go cash so you don’t have to deal with it? If so, what does that entail?

There are practices that do an amazing all-cash business. They make a good living; they have quality time with their families; their lives are in balance. But these are the exceptions: most are completely out of balance. Run the numbers and you will see that to collect $36,000 per month you have to maintain a level of 300 patient visits a week, at an average collection of $30 per visit. One of two things happen: you charge more, which means you must provide more services and  employ more people; or you work more hours to see more people. Either way, you are out of balance.

Few physicians possess the personality and persistence that it takes to craft and maintain a true cash practice.  Would you want to go through these struggles just because you don’t understand the world of insurance? Would it not be better to learn a few key things that will help you create practice procedures and methodologies that bring balance and allow you the revenue flexibility that breeds success?

Too many practices create policies or develop systems based on failure rather than knowledge. For example, you might create a call-back system for patients because you don’t want them missing appointments. But those calls ultimately will not make your patient stay committed.  Rather, you need to educate yourself and your staff to educate the patient.

Seek the knowledge you need

This knowledge is available, from myself and others. For example, I present at many professional events and state association seminars. I teach the basics of coding, documentation and practice management, helping doctors understand how to create successful systems in their practices. I have helped thousands of chiropractors over more than ten years to take control of their individual realities through education. I hope that when an opportunity arises that you will join me at one of these events and start learning the keys to keeping your practice at its most efficient and effective state – however you opt to be paid.

The key to any successful business is knowledge. Unfortunately your ability to treat a patient can represent as little as 20 percent of the knowledge that you need.  Many doctors never acquire that other 80 percent, relying on trial and error to make their practices function. Survival remains a month-to-month fight to meet overhead costs.

Don’t live that way. There are options. Search them out. Call me and we will talk and see what your first steps should be! Is “going cash” the answer? It may be, but make sure before you commit!