Switching from Insurance to a Cash-based practice

If you really want to freak a doctor out - tell them to stop taking insurance and go all cash. Yikes!! Is it impossible? YES, it is possible!!

And although at first, it sounds really appealing - no contracts, no hassle with deductibles, no biller costs - the fear of playing outside the insurance fence is immediate. The safety and security of insurance payments, and the built-in referral system, all disappearing overnight begs the question, "How will I survive?"

The truth is many medical providers have successfully switched from insurance to cash-model. You can learn from their stories as well as embracing simple business truths when considering a switch. Like I always say, "Work backwards!"

What are some of those truths?

• HAVE A PLAN

THE WORST THING YOU CAN DO IS THINK YOU MAKE A TRANSITION OVERNIGHT, WITHOUT IT TORPEDOING YOUR PRACTICE. YOU WILL NEED A 3-12 MONTH IMPLEMENTATION PROCESS DEPENDING UPON YOUR PRACTICE TYPE AND CHARACTERISTICS THEREIN. YOU WILL NEED TO LOOK AT EVERY ASPECT OF COSTS AND WHAT VOLUME/PPH IS REQUIRED TO MEET YOUR BEP (BREAK-EVEN POINT). IT TAKES TIME, BUT YOU'LL THANK YOURSELF LATER.

• PLAN ON DIE-OFF

YOU CAN EXPECT BETWEEN A 40-60% DECREASE IN PATIENTS ON YOUR BOOKS WHEN YOU MAKE THIS SWITCH. WHY? WELL, YOU'VE BUILT A SERVICE AND NAME BY TAKING INSURANCE. WHEN YOU SWITCH, SOME PEOPLE WON'T BE ABLE TO AFFORD SEEING YOU, OTHERS JUST WON'T WANT TO PAY WHAT YOU'RE ASKING, AND STILL, OTHERS WILL BE MAD AND TAKE IT PERSONALLY THAT YOU'VE CHANGED YOUR MODEL. HOWEVER, IF YOU PLAN FOR THIS EMOTIONALLY, MENTALLY AND FINANCIALLY, IT WILL MAKE THE PROCESS EASIER.

• OFFER FINANCING

SO YOU'VE SWITCHED TO A FEE-FOR-SERVICE OR CASH MODEL. CONSIDER MAKING IT EASIER FOR YOUR PATIENTS TO SEE WITH WITHOUT SHELLING OUT ALL THE MONEY UP FRONT. THERE ARE MANY FINANCIAL TOOLS OUT THERE TO MAKE THIS TRANSITION EASIER FOR YOUR PATIENTS. THERE ARE COMPANIES WILLING TO EXTEND LINES OF CREDIT TO YOUR PATIENTS (WHO QUALIFY) WHO THEN CAN STRETCH THEIR PAYMENTS FOR YOUR SERVICES 6, 12, 24…EVEN 60 MONTHS!!! 

• REFOCUS YOUR TARGET.

UNDER THE OLD INSURANCE MODEL, YOU’RE BASICALLY TIED TO A CLIENT DETERMINED BY YOUR INSURANCE CONTRACT AND SPECIALTY. NOW THAT YOU’RE CONSIDERING A CHANGE, YOU NEED TO CHANGE YOUR TARGET. WHAT DOES YOUR IDEAL CLIENT LOOK LIKE FINANCIALLY, CLINICALLY, SOCIALLY, AND SO ON. CONSIDER IF YOU’RE NEW MODEL FOCUSES ON THE USAGE OF A CLOUD-BASED EMR, WILL YOU’RE IDEAL CLIENT HAVE ACCESS TO A COMPUTER? SIMPLE QUESTION, BUT ANSWERING THESE WILL HELP SHAPE YOUR MODEL EVEN BEFORE YOU IMPLEMENT IT AND HOPEFULLY SAVE YOU A FEW HEADACHES. 

• BUILD A SUPPORT NETWORK.

ONE OF THE SILENT KILLERS OF MAKING A SWITCH IS THINKING YOU CAN DO IT ALONE. CONSIDER YOU ARE CHANGING YOUR ENTIRE CULTURE FROM WHEN YOU FIRST STARTED MEDICINE. IT'S A HUGE UNDERTAKING AND CAN BE OVERWHELMING AT TIMES. THERE ARE OTHER PROVIDERS WHO HAVE GONE BEFORE YOU AVAILABLE TO SHADOW, CALL AND COLLABORATE. ADDITIONALLY, THERE ARE ORGANIZATIONS AND CONSULTANTS WHO HELP WITH PLANS AND STRATEGY FOR SUCCESS. (HELP THE DOC SPECIALIZES IN THIS SERVICE.) WHATEVER YOU DO, PLAN ON INVESTING INTO THOSE RELATIONSHIPS. THEY WILL BE INVALUABLE TO YOUR SUCCESS. 

Of course, there is a myriad of other questions and facets to consider. The good news is there are answers and you can be successful! Let me know if you're interested in joining a MasterMind Group on this subject.