Balancing Patient Relationships and Practice Freedom (S1E8)

Welcome to the Cash Practice Solution, where we help healthcare providers take control of their practices and deliver exceptional patient care. I’m your host, Dr. J, and today, we’re starting a new series on balancing patient relationships and practice freedom. This  relationship is everything, but without freedom, you’re not going to be able to do it for very long.

The Patient Relationship Spectrum

In this first discussion, we’re going to explore the spectrum of patient relationships, and the impact of insurance-based payment versus a cash-based practice. Now, understanding where your practice falls on the spectrum is critical for determining the right path forward. Needless to say, we’re the Cash Practice Solution. Our team has put together a really cool graphic that fleshes this idea out well. And you’ll be able to take a look at it. Just click at the bottom of the screen and you’ll be able to access that graphic. You’ll get a visual impression of that whole, insurance-heavy, cash-free practice; the opposite of the freedom that you have through a cash practice, and how that kind of transition works. So click on the bottom if you want to take a look at that diagram. We believe in the Cash Practice Solution. The insurance-based situation is not ideal because of the patient relationship issues. On one end, you have the revolving door practice, where you treat mostly people that  you really don’t know well. You can think about these patient relationships  in terms of the same type of relationship you would have with patients at an urgent care center. In emergency medicine, (which I practiced for a really long time)  you don’t see the same person really, hardly ever – maybe a couple times a year. Typically that’s an annoyance because they keep coming back, because they don’t receive care from someone who knows their story. Patients frequently come and go based on their insurance status. If you’re an insurance-based practice this tends to create really low return rates. Eventually, you wind up with a lot of strangers coming through, and because of that, there’s not a lot of word-of-mouth referrals. (Word of mouth referrals are what help cash practices flourish). On the other hand, when you have a strong patient relationship (which is how cash practice usually works) you receive referrals and have a high patient retention rate.  People generally are not going to spend their cash unless they know you and like you.

It’s all about Trust and Loyalty

Ideal Patients, that trust you, are loyal, they return regularly, and everybody that they know, or see at parties, church (wherever they’re going), they’re going to have conversations about the great care they are receiving. I was at a wedding just this past weekend for one of the children of a family that I’ve been taking care of for probably almost 20 years, one of the longest practice patients that we have. As I walked in I realized I  knew probably 50 percent of the people at the wedding because they had referred all of their friends, all of their colleagues, and it felt a little bit like being a rock star because everybody knew me. It was good to hear, “Dr. J, you saved our life, or really helped me out”.  I might not even really know them personally that well, but in that environment, where you are trusted and you have the ability to really care for the patient, because you are not bound by the insurance companies rules and regulations, that referral pool is powerful.  There were approximately 20 or 30 patient families represented there all referred from this one family. Basically referrals that built a group which built a hub for  other referrals.  Let’s look at the insurance world versus the cash practice world. If you rely heavily on insurance, you’re likely dealing with treatments that are guided by insurance protocols, lots of admin costs, you’re constantly following the codes that they’re paying for (instructing you on what you’re allowed to do, which drugs are approved), and all sorts of red tape. On the other hand, in a cash practice, your bottom line will be better. You’re just going to have a whole lot more normal cash flow regularly, and your patients will be healthier because you’re doing what [by your experience and training] what  you know works without anyone from an insurance company or a third party telling you, “we’re not going to cover that anymore,” “I know that’s your antibiotic that you like that works in that situation, but it’s not on formulary so you can’t use it.” It’s a six dollar difference [maybe], but now you can’t use it. It’s crazy. 

Why I Stopped Taking Insurance Payments

My switch to cash practice started in 1990. I opted out of Medicare because I was kind of proud of the way that we were able to take care of patients without interference. We were doing everything online in 1990, which was pretty cool.  But man, the administrative stuff was intense. It was a headache. And when it came down to their enforcement it was just unbelievably draconian. Medicare came with incredible penalties. I don’t know if you know this, but for federal contractors [in the United States], in order to be investigated for fraud, it’s $200 million before they trigger. For a physician, it’s 50 cents. Right? So, that’s how Medicare works. If you’re a doctor, you’re under the gun. And not only enforcement, but there are all sorts of rules for how you bill, how often you can bill, how often which procedure is covered. It’s insane. Once I was done with Medicare I really got excited about integrative medicine. I’m a D.O., so I do some manipulative medicine, and naturally the supplements and nutrition come in, with the diagnostic tests that go with it. And insurance companies say, “experimental, no pay, non-covered service”. Pretty much every insurer it’s very rare that they cover services. Services that are necessary if you’re going to do good care. Patients want this kind of care. They’re asking, “Hey, can you help me with my nutrition plan?”, “Can you help me with my diet?” Well, without nutritional support and help, how are you going to do it? You don’t have the diagnostics. You’re kind of guessing. So you have to do tests, but they’re not covered. Then patients get upset. That’s it. Because you order the test and they’re either mad at you, or if you can explain it enough and they’re reasonable, they’ll be mad at their insurer.But either way, they’re mad. It’s just not good. 

Empower Patients

You don’t want patients to be exposed to the unexpected (Surprise!) expenses. They don’t like that. Nobody likes that. It’s avoidable in a cash practice because you can discuss expenses up front. You can negotiate a price, and create a structure where there is a plan.  You  can desire to do these diagnostics. You can tell them in advance. And I often negotiate this with a patient, “We can try the treatment without the testing. I’ll be guessing reasonably. It’ll be an educated guess, or you could spend the $300 on that and maybe not go out to dinner this week, – kind of your call.” Then the patient and you have to make a decision. When it comes to insurance, you never know (typically, those costs are much higher). Diagnostic testing and treatments are much higher than we can offer in a cash practice. In an insurance practice, the patient gets upset with you because you’re ordering tests that cost them money their insurance doesn’t cover, and it damages your relationship. That’s the driver of your marketing, really, better than anything. 95 percent of my patients are word of mouth. That’s how it works, and that’s because of the relationships we have.

Is Your Practice A Fit the Cash Practice Model?

Because every practice is different, should everybody switch to cash? Primary care is really the sweet spot – pediatrics, obstetrics, gynecology, family practice, general practice, internal medicine – that kind of entry-level care (tier one). If most of your patient relationships are because of the insurance that you’re in (which a lot of practices work that way) – you open the door, you take some insurance panels, and you get started with cash patients. If you’re in-network. If that’s 100% of your practice, you have some unique challenges. Switching to all cash is gonna be a little bit more demanding. So, you should plan on not just a few months, but at least a year to make the switch. But, if you’re willing to be patient, and start to work your practice toward cash, and really learn about it, you can do it.

Steps and Timeline to Transition to a Cash Practice

We’ve done a bunch of podcasts in the past (look at the beginning podcasts and work your way through) [because we talk about] how a cash practice works, how you can switch to cash practice and the podcasts are a good foundation. One of those points is that if you’re in insurance practice, your patients come to your practice expecting their insurance to work. They are used to coming to a certain physical space and using their insurance. In planning (a year or two), you might want to change your physical location. Just get a new space, if you’re renting, and then you’ll have the new space as all cash, and its easier for people to make the switch in their mind because they are not at the same location where they have been able to use their insurance. [Not being restricted by the insurance companies} you have the  freedom to practice according to your best judgment and your conscience, and this will reduce your overhead by 30 to 40 percent.  You get to practice the medicine you want. You are allowed to do what you know works. You cut your overhead almost in half by getting rid of third-party paperwork. Be creative. Think about the ways that would help you make the switch. Start talking to your patients who are under insurance and say, “Hey, I’m making the switch,” or “I’m thinking about making the switch” give them the opportunity to follow you down this new path. If you are the  kind of person who’s just incredibly warm – great personality and kind. Everybody that you talk to (whether they’re an insurance patient or somebody at the PTA), you just have the ability to bring them into what you are passionate about and you create great relationships really, really easily, the insurance safety net is a whole lot less of a deal.  Maybe you can’t make a really quick switch to cash practice. You don’t have to be limited by the care you give just because you take insurance. I know doctors who are just incredibly warm, and their patients all love them. Even though they take insurance as payment, the quality of care they give doesn’t suffer and their relationships are really solid. If you have that kind of personality, over 50 percent of your patients are going to stay with you when you decide to go to a cash practice (some – as high as 80 percent will stay).  Some of that has to do with your pricing. (Previous podcasts will teach you about best pricing methods). As you switch to cash, you’re going to see that your clinical decision-making becomes more important, you can be  really, really clear about the kind of decisions you are making for your patients. You don’t have to check with the insurance. You don’t have to check which codes cover [treatment]. You just make the decision. You can make sure that your pricing is reasonable to cover the cost and you treat the patient.

The Bottom-Line Impact of Switching to a Cash Practice

Instead of investing your energy in just idiotic documentation compliance (which is one of the reasons that I just absolutely couldn’t tolerate it), you can take back 30 to 40 percent of your overhead and two or three hours a day. That’s with really great technology and all the other tools that are available which allow you to save another couple of hours a day. Making space for you to double your output, and increase your profitability. And then, you’re the kind of doctor patients will spend their money with,  and you’re worthy of it because you now have the time to spend with the patient, not the paperwork. They’re worthy of every penny that they’re giving you, and you’re giving them something that’s more valuable than anything else they can get – the relationship, the knowledge, the whole system that really works. The sweet spot is a really strong patient relationship and not taking insurance. That allows you to achieve optimal revenue and you can work pretty much as much or as little as you like. You can work five days a week if you like (if that works for you and you have the energy for it), and you want to see patients for seven or eight hours a day with good technology. That’s that’s the whole thing – seven or eight hours. The documentation is cut down so much that you don’t have additional documentation time that you’ve got to make within an appointment. A minute, or two minutes, is plenty to do all of your documentation with proper technology. You can have very low patient turnover and have amazing outcomes. We have a saying (and we’ve, we’ve worked with this for years), “The freedom to choose is the power to heal.” If you have the freedom to choose, in a cash practice, which you will, you’ll see your patients do much, much better (the frustration level goes down, their peace goes up) because you’re doing the right thing. It’s impressive. 

Is Your Practice in the Right Stage to Transition to Cash-Only?

I know that it’s a thought that you’ve probably had  – How much impact do you really have? Do you really matter personally?  (You, as the clinician, practitioner, provider, nurse practitioner) you are the medicine when you walk in that room confidently, and you give them everything that you’ve got. You change them before you make any treatment available – before you prescribe an antibiotic, before you do hands-on treatment, before you do anything – you’ve made a change.Look at where your practice fits in this pattern. Where are you (lots of cash, a little bit of cash, heavy insurance)? Look at the spectrum and consider you. What’s driving you? If you have questions about it, send them to us. We’re going to recap this series as we go through and we’re going to answer as many of those questions as possible. And if you haven’t already done it, at cashpracticesolution.com, there’s a scorecard and you can fill that out. It goes through a lot of really good detail, so that we can give you a really good assessment of what kind of steps you need to take to have an incredible, transition to a cash practice. And, if you listen to your patients (yes, listen!), learn their story, and just love them wholeheartedly, you will be unstoppable, and you will succeed. So thanks for listening and we’ll see you next time.