The 5 Biggest Mistakes I Made in Starting My Cash Practice (S1E4)

Hello and welcome to the Cash Practice Solution Podcast. I’m Dr. J and today we’re diving into an expensive (originally painful) topic that’s now close to my heart – The top five mistakes I made when starting my cash practice. If you’re thinking about making the leap into a cash-based model or you’re in the early stages, these lessons might save you a lot of time, money, and stress. Also, if you want to maximize the cash practice you’re already doing or start on the right foot in a new practice right, you need to check out our cash practice scorecard. It’ll help you make all the right decisions from the very start. It’s linked in the description at cashpracticesolution.com. 

MISTAKE 1 – I Set Prices for My Cash Practice Too Low

So let’s get into it. Mistake one (an easy rookie mistake), is setting prices too low. When I first started my cash practice, I made the (yes, rookie mistake) of setting my prices too low. I wanted to match local practitioners, thinking that would attract patients. Spoiler alert – it didn’t work out as planned. I actually worked with a doctor who was charging $19 a visit, and I wanted to charge a little more than that – $29 (or something like that). It was a tiny bit of money. People bitterly complained, even at that. So, some of the patients who were attracted by the lower prices ended up being less than ideal. They complained that the fees were way too high (that little bit of money), even though they were lower [by far] than the value I was providing. It was a really harsh lesson that pricing should reflect the value of service, not just what the other guy’s charging. Because – if somebody’s just writing a prescription and you’re out the door, versus engaging (and really doing a great job for the patient); it’s a different service. It might use the same [insurance or billing] code, but it’s a different service. Here’s what I learned: Extended office visits, even though they take more time, are worth more minute-for-minute than short ones. So, a 30-minute visit can accomplish way more (way, way more) than two 15-minute visits (if you get my meaning). Basically, when you price according to the actual value you provide, patients are way more satisfied, and of course, your reimbursement is better.  There was this one time that a patient came in with horrible back pain (he couldn’t walk), and my staff checked him out. We were super busy, so I only had a few minutes to spend, and the three-minute procedure that I did (prepare the patient, do the injection), completely resolved the pain. He was great. He stood up, walked to the front, and had to pay several hundred dollars for the treatment. He said, “Three minutes of work – how could that possibly cost that much money?”. One of my staff members looked at him and said, “That’s not for three minutes of work. That’s for 30 years of professional experience”. That quieted him down. He was much better after that.  That is the value that needs to be reflected in your pricing. We’re not all the same.   Different doctors have different levels of experience, skills, and connecting ability. Setting fees based on the true value of our services is not the same as Medicare or insurance companies’ caps and reimbursement levels. I’m sure you know that, but that’s why a cash-based practice makes so much sense – because you can price according to what you provide. Otherwise, you don’t, and when you do that, you can’t give the kind of service that is the very best you can do; and that is not doing anyone any favors. 

MISTAKE 2 – I Didn’t Identify My Ideal Patient

I didn’t really know what I wanted in an ideal patient. I didn’t know what that profile was. What was my ideal patient? So, one of my biggest aha moments was realizing the importance of defining that. What was my ideal patient profile? In the beginning, I was seeing anyone and everyone who walked through the door, which is understandable (because you need to make a living). I get it. I didn’t know who were the ones who would be my ideal patients. I hadn’t developed that sense. It felt like I was working kind of in an urgent care center – super busy, but not really building relationships (meaning that the staying power of the practice wouldn’t be there). They would go down the street to another urgent care if they just needed urgent care.  So, I really needed to ID the patient who would be the best [for my practice]. Without a clear idea of who that was, I was seeing patients who weren’t a good fit for my practice. They took time and energy. In the end, they got average clinical results – either because they didn’t comply, or we just didn’t really connect.  When you don’t have an ideal patient profile, your marketing efforts are difficult, and spotty at best. You might attract patients, but they’re not the ones you want to build a practice around. Here’s the thing – ideal patients refer others who are just like them. So, take really, really good care of your ideal patients. They have friends who are just like them. They have the same level of commitment. They have that same level of interest in the care type you provide (and we all provide different care). We all do different things. I do integrative regenerative medicine, and you may do something in family practice, or something in gynecology. That’s great!  So, we all do different things. But, the patients who you really embrace and connect with – they’re going to refer patients who are just like them. If you don’t define that patient, you’ll be struggling to get patients to move on (that you’re not helping) to discharge them, and you know, breaking up is hard to do. It’s not good. It takes a lot of energy. It’s always very painful for me. I hate that, but having an ideal client profile is so much better.  I spent far too much time trying to build relationships with patients who [maybe] weren’t really interested in a doctor-patient relationship. They just wanted some quick treatment. Until I got clear on who I wanted to serve, my practice didn’t flourish. But, once I did, “Annie! Bar the doors”. It was really, really good. 

MISTAKE 3 – I Rented Space Too Long

I rented a space for too long (even though it wasn’t years, and years, and years) – six or seven years. I saw the growth trend of my practice was obvious – things were going very well. I knew I’d need more space, but I hesitated by three or four years. So, that was three or four years before I was really ready to jump in. I was worried about the financial commitment (because you know – cash practice) and all. It’s nothing to be scared of – cash practices do well universally. Everybody does well if they listen, learn, and love. If they do the cash practice solution model, it works. But, I was afraid to buy a building. I was experiencing rapid growth and pretty good cash flow, but the third-party thing had me nervous. I kind of thought if I had a downturn, I’d be in trouble – I couldn’t cover the debt. If the cash practice didn’t pan out well, I didn’t really have the support that I want to give you – which is: Don’t be afraid to fail. If you do the simple things that we’re going to teach you at Cash Practice Solution, you’ll succeed.  Looking back on the time that I purchased the building – it was one of the best decisions I have ever made. My office building is one of the best assets I have in my collection. None of my colleagues were buying buildings. Everybody said (well, you know), “The insurance companies are going down.”, “The reimbursements are going down.”, and “…really can’t justify the investment based on the business curve”.  But, in a cash practice (it operates really differently), the growth trajectory is something you can literally bank on. It works, and it is different. It is consistent.  If I’d taken that leap earlier, I could have capitalized on that growth sooner. Now, I don’t pay rent on a building. I own it. Don’t be afraid to invest in your practice. If you see the growth and you really are good at this (you’re a good doctor), you’re going to succeed. Trust and act accordingly. 

MISTAKE 4 – I Got Stuck Moonlighting in Corporate Care

This is interesting. Because I did a whole bunch of ER work (and for years), I held on thinking it’s a safety net because I didn’t have anybody who is a cash practice person who could say, “Cash practice really works and it’s really successful”. But, I’m here to tell you I was caught up in the short-term security of the ER work. I kept on working on contracts with them – spending time there instead of on the practice. But, ER work is exhausting and took away a lot of my energy and time when I could have been building the cash practice (which is far more profitable at every level: financially, emotionally, personally, in terms of academic growth, etc.). In the ER, there’s no such thing as an ideal patient. You do your best for whoever comes through the door, and that’s just exhausting. While I was dreaming of a practice focused on complete care, I was in the trenches dealing with fragmented care of patients who were taking too many medicines for things they didn’t need. That’s the emergency room. And the longer I held on, the longer I delayed fully committing to the cash practice. Once I did finally let go, that’s when my practice really began to thrive. You need to have the energy to put into your practice and your patients – you need to have that.  So, if you’re holding on to a side job that you don’t absolutely need the money because your overhead is too high, don’t do that. Ask yourself if it’s really helping you, or holding you back (because, it’s not security). Your security is building your cash practice. 

MISTAKE 5 – I Resisted Personal Branding

This is probably one of the most significant mistakes (and I think almost everybody at one point or another will have the same struggle). I resisted personal branding – I didn’t think the “Dr. J” brand would be important We have one doc that we work with in south Texas – literally, she is a rock star. She’s beautiful, talented, and incredible. I told her, “You should just personally brand your brand. You’re, you’re a shoo-in for people to just fall in love with you. You can’t not do this” (I’ll tell you more about her in a minute).  I resisted the idea for years. I thought it was egotistical and self-centered (that wasn’t cool). A patient who was a really top marketing executive told me that I was way out of line and she gave me a reality check. She convinced me that the personal brand wasn’t about self-promotion – it was about connecting with the right patients and making my practice attractive so they’d stay and build lasting relationships. I was a little self-centered about being self-centered, apparently.  After some time, I finally embraced the idea, and the “Dr. J” brand was born. And let me tell you, it has been a resounding success. You can be “Dr. K”, “Dr. M”, or “Dr. whatever brand you like”, but it should be personal – so that relationship between you and the patient is personal. I used to worry that a personal brand would stifle growth, and the patients wouldn’t trust the staff I would be hiring (as other clinicians), as much as they trusted me. I was wrong. Boy, was I wrong – many patients actually prefer seeing my colleagues (despite my initial fears, my ego is still intact).  This experience taught me the power of personal branding in attracting and retaining patients. If you’re on the fence about it, I encourage you to dive into the personal branding thing. It’s worth it. Just as an example – I don’t know if you’ve ever heard of the Mayo Clinic. 😉 I hope that sharing my [they’re not that embarrassing,] top five mistakes helps you avoid them in your own journey. Remember, setting the right prices, defining ideal patients, investing in your space, letting go of side gigs, and embracing your brand are all critical steps in building a successful practice. And if you want to maximize your cash practice or start out on the right foot from the beginning Check out the cashpracticesolution.com website, where we have the scorecard for even more tips. Go on to the website and we’ll show you all sorts of technology and white papers and things that will really help you out.  On the next podcast, I’m going to share with you the two-million-dollar practice. Until then –  Listen to your patients Learn their stories. Love them (commit to them), and you will be unstoppable.