Q&A: What Will My Patients Think When I Switch to a Private Pay Physical Therapy Practice?

Questions? Insurance Reimbursement Cash Paying Physical Therapy Patients

The fear that we will lose all or most of our current patients when we switch from a traditional insurance based practice to a cash based, private pay or self-pay practice is a very important and real fear to address.  It is very natural to think about all of your patients leaving You because you now are asking a price thats 3 to 5 times their current co-pay.  These are the people you have helped, developed personal relationships with and progressed through lots of pain, suffering and agony to a point where they are feeling so much better.  You don’t want them to think you are greedy, selfish, or worse not concerned about them.  When they leave, you don’t want it to feel like a slap in the face.

This is an issue and the problem exists because our current payment system is messed up, not natural and puts the payment responsibility in the hands of someone other than the person who receives your service, the person you interact with on a weekly basis.

Making the Switch

Switching payment systems is not a decision that is made based on the personal values of our patients.  Nor is it a decisions that you’ve made in haste.  It is a decision that hundreds of other therapists have chosen, that almost whole professions (dentists, psychiatrists/psychologists/mental health counselors) have made due to decreasing reimbursement and personal values based on how we want our patients to be treated.

If you are transitioning from a traditional insurance based practice to the private pay model, you are not only changing your payment system, but I’m sure the amount of time you spend 1-on-1 with each patient.  Instead of 15-20 minutes a visit, 2-3 times a week, you may be going to 30-60 minutes 1-2 times a week.  The total time you spend uninterrupted may increase significantly, and at the least it will stay the same, but now that patient only has to miss work to come in to your clinic once a week and not 2 or 3 times.  You will also find your patients improving quicker and spending less time in therapy and they may even tell you when they are ready to be discharged.

One thing I’ve come to terms with is that I can not heal the whole world, nor can I heal everyone in Greensboro.  Neither can I “fix” my patients.  I can however, help people who want to participate in their own care and healing, who take charge of their own health and who value to 1-on-1 hands-on time that they spend with me and with themselves at home.   I believe that a physical therapist should have the time to spend with a patient that is focused on that 1 patient and that patient only.

What to Expect

When transitioning from a traditional insurance based physical therapy practice, you should should notify your current patients, just as you would an increase in fees and expect to “lose” some patients.  You can post a sign in your office, send out an email to your list of patients and a typed and signed note detailing your payment policy change, but do not make any excuses.  You will gain new patients, they will be a different type of a patient, ones that value and buy in to your program and therapy and your new payment model.  You will retain some of your current and longstanding patients who my already be this type of person, and who also realize how awesome you are and know and understand your value.  The patients you lose, some will try someone else and return, others you just have to let go.  They don’t understand what physical therapy can be, that’s OK.  They may just be there because their physician told them to go or you are the closest therapist to their home or work.  Yes, there are some patients who may not be able to afford your new rate, but then they couldn’t “afford” to come see you 3 times a week for $30-50 either.

You should also expect to see a significant reduction in the amount of patients you treat each week.  Your total amount of treatment hours per week may stay the same, but the total number of patients you have may drop from 150 to 18-25 patients per week.   At this point in my life I do not want to treat more than 25 patients a week.  I have tuesday and thursday mornings off from work so I can workout and take care of my body.  I spend monday and friday afternoons with my 2 and 4 year olds.  Other than those times, I’m at work treating patients and doing my administrative duties.  My weekly average is around 15-20 patient visits and I see 1 patient per hour.  Last summer I saw 22 -25 patients a week for 3 months straight.  I was slammed, backed up on paperwork and that was a lot for my body.  Patients I see, get better so quickly that I’m always going,”wow, I just discharged 5 people this week.”  I consider it low volume, but high quality. Fluctuations seem greater when the volume is lower.  I don’t want to treat 8 patients a day, much less 30.  I saw 43 patients in one day as a PT student.  I’m not doing that again.

You should also expect to lose some referral “sources,” however you will gain new ones.  I like to think of them as referral “avenues” or “partners” that becomes a 2 way relationship.  Physicians may no longer want to refer their patients to someone who does not “take insurance.”  Physicians do not understand what this means for their patients either.  This is why I’ve spent a lot of time marketing online and making it easy for patients to find me when they search for a physical therapist in my town or their condition online.  I just saw a new patient today, and had another patient contact me today through my website, both of whom found out about me “online.”  A huge number of my new patients mention that they found out about me on Google.  You can learn some of the most efficient and effective marketing strategies I use to target patients directly in my eBook, Dominate the 1st Page of Google in 30 minutes.

Making New Connections

Other referral “avenues” or “partners” that I have had significant success with are yoga instructors, personal trainers and bicycles shops.  I ride bicycles and practice yoga, which connects me to those communities.  I also encourage my patients to utilize their services when appropriate.  There are many strategies to build potential new referral “partners”, however my best referral “partners” are people who have been my patients. This type of word-of-mouth advertising is the best, strongest and least expensive form of marketing.  This is why I ask each and every one of my patients to let people know about us.  I use Aweber not only to provide educational newsletters for my patients (sent as blog broadcasts), but to automate email messages so each of my patients receives information, videos, inspirational messages, etc related to their treatment.  Most importantly,  in this automated series, I ask them directly to let their family, friends and co-workers know about us.

“It takes one to know one,” and people who have experienced what it’s like to be on my treatment table know the value of my service and can convey that to their friends, family and colleges.  When is the last time you paid for a physical therapy treatment?  Have you been to a bodyworker for therapy? When was the last time you had a massage?  I know I’m due for some good bodywork soon.  Are you?

Switching to a Private Pay Model

As you switch to a self-pay model, you want to attract the type of patients who value what you offer.  These are not just wealthy people, but also students, people who are unemployed, farmers, teachers, nurses, administrators, etc   People who understand the value and benefit of a good one-on-one session with a knowledgeable and well trained physical therapist.  Feel good about yourself for offering a high value, low volume service.  Your patients will find you if you make yourself and your practice available and visible.  There are many low cost or Free methods of attracting new patients, discovering new referral avenues and treating patients in the way that YOU feel is best.

What has been your experience switching from a traditional practice to a cash based practice?  What direct to patient marketing strategies have worked best for you?  What is your biggest fear?  What is holding you back from making the transition to a self pay model?  Let us know your thoughts and opinions in the comments section below.

 

CashPT Checklist Cash Based Physical Therapy

 

About The Author

Aaron LeBauer

Aaron LeBauer PT, DPT, LMBT started a 100% cash based physical therapy practice right after graduation. He's on a mission to save 100 million people from unnecessary surgery & enjoys helping passionate therapists build successful businesses without relying on insurance.

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4 Comments

  • Ashley

    Reply Reply September 15, 2013

    Great article about cash-pay. It really helps to explain the benefits of this premium service. Also gives some great advice on how to transition into this avenue.

  • Lynda Huey

    Reply Reply December 11, 2013

    Thanks, Aaron. I suspect we pay a lot more overhead here in L.A. where we pay $25K a month to our landlord for our pool and gym areas. But we do have the absolute best therapy pool in Southern California, 92 degrees, salt water. I’ve written 4 books on water therapy and am the most recognizable name in that field in L.A. Nevertheless, I remember when we had to discharge 61 Medicare patients in July, 2007 because the cap went into effect then. Only 2 continued their care paying cash. It was chilling. That experience made me leery to go to cash pay. Thoughts?

    • Aaron LeBauer

      Reply Reply December 12, 2013

      Lynda,
      Thanks for your comment. I doubt your experience at that time in physical therapy was an isolated one. My first thought, is that most of the people who left and did not stay on as cash paying patients did not place the same value on your service as your cash price because they had been receiving the same service at a much lower cost. My analogy is that these patients were eating a grass fed hamburger at your restaurant instead of going to McDonalds for a Big Mac. Then all of the sudden you were asking them to pay $8, which is still a good deal in a restaurant, all because the government changed your currency.
      When you build a cash based physical therapy practice your patients will not all convert with you because of their expectations and values. Patients who value the service you provide will pay the amount that they think you are worth, however many do not value expertise, 1-on-1 care and think that physical therapy is just a modality of exercise. That’s ok. Not everyone is going to get it or be the patient that is best for my practice or yours.

      To answer your inquiry about your overhead, I really need more information about your practice and what you envision as your ideal cash based practice.

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