There’s no doubt things are changing rapidly in the healthcare world. As costs continue to escalate beyond affordability, many chiropractors sit motionless in their offices like those on the Titanic hoping everything would be okay. Future success in the chiropractic practice will be directly decided by those decisions made today regarding the economic model a practice elects to follow.
Unfortunately for many chiropractors, this decision will be based out of fear rather than strategy. As all costs continue to climb, many chiropractors choose the path of least resistance and decide to get rid of x-ray (insurances don’t pay for them), get rid of staff (constant cost regardless of weekly practice income fluctuations) and stop taking insurance (too much work with billing, must have malpractice insurance, too stressful with patients). All of these choices are made out of fear and lack of business maturity, and in most cases will lead to a struggling or failed practice.
The key to succeeding in the future practice is to build two boats, one that participates with the available insurance coverages out there, and the other to build the cash, or out of pocket, practice. Both require significantly different attitudes and guidelines, but both can help lead to more secure future in a very unstable industry. So our goal with this article is to provide docs with a strategy for long term practice and personal success.
Cash Practice Alone
Most offices that have become strictly cash generally have reached this state out of fear and a lack of a good business plan. It’s easier just to get rid of the insurance CA, stop the pain of getting rejections from insurance companies, and make people pay on the spot for their services so the office doesn’t have to wait for their money. It’s kind of like someone getting out of a contentious marriage, and vowing to never get married again. They just don’t want to go through that type of pain again. So, they sit alone the rest of their life thinking this is best only option available.
The truth is, this practitioner needs a developmental program to help them understand the laws of business and the guidelines required to have a successful practice utilizing both insurance and cash relationships. Giving up the insurance pipeline, when so many people are covered for so many services is short-sighted and not recommended, if long term future success is the goal.
Likewise, building the P I practice that depends 100% on inflated third-party pay is like playing Russian roulette. I call this type of practice Musical Chairs. It can change by the minute, and if you’re left standing (or depending upon them for all of your income), there is a high risk your practice will seriously suffer if the industry ever makes a major change. This is not a recommended approach to long term future success.
The Good, the Bad, and the Ugly of a Cash Practice
Initially, a total cash practice seems like a great idea. Never having to deal with the frustrations of an insurance company again is a wonderful thought. Dropping malpractice insurance premiums will certainly help the bottom line. Less stress, a smaller staff and no more rejections have to make life a lot easier. However, the first downside of this type of practice is also less income.
The insurance industry pays rates much higher than what the general population can afford. Assuming there was no stress in filling out insurance forms, mailing them in and having them pay, any office would welcome the inflated rate of pay (despite the fact these rates are much lower today). But, the stresses of working with insurance companies cost every office. They cost on the mood of an office, on the workload of an office, on the motivation of an office, and on many other levels. So a doc has to weigh out the benefits vs. the costs to determine if participating with insurances is worth the price paid.
Organization and good clinical procedures will help to make participation with insurance companies more palatable. Offices that have weak procedures and poor documentation will always have a stressful relationship with insurance companies. But, offices that have strong procedures and good documentation have good relationships with insurance companies. In addition, honesty with all patients as to what is the appropriate responsibility of the insurance company and what is the appropriate responsibility of the patient also helps to make an insurance practice very workable. The practice that can only work with people who have coverage, and don’t know how to work with people who have high deductibles and high co-pays will never find it easy to work with insurance guidelines.
An example of how you don’t want to do it is the practice that will only suggest custom orthotics when they see the patient has some type of coverage for custom orthotics. This is a backwards and failure oriented practice. The successful practice examines the patient and determines what the needs are without any knowledge of what the patient’s insurance coverage is. The recommendations are based on what the patient needs, not what coverage they have.
When I have a patient we fell needs custom orthotics and I see they have no insurance coverage, which is the majority of patients, I employ a successful strategy that has worked for years. I have visual evidence (digital scanner) that makes them see and understand the imbalances in their feet and the detrimental effect it has on their total musculoskeletal system. I then explain it will only get worse over time, then I tell them the range of cost of custom orthotics in our area, and they are very happy they’re able to get them for that cost. This all happens in about 5 minutes of show and tell. They’re now willing to pay out of pocket. I do this every day I’m in practice.
Public Perception in Seeking Care
The number one question the public asks when they call our office is, “Is it covered by my insurance?”. To say no ends most relationships before they ever have a chance to build. The public is oftentimes willing to accept sub-quality care if their insurance only covers that care. So, to not accept insurance, especially in these hard economic times should not be considered, especially by the new practitioners out there.
I’ve found that once I get a patient into my office, anything is possible. They may end up spending an exorbitant amount of money out of pocket, because they’re giving us a chance to show them why we are the preferred provider in their life. But, if they never come in, everyone loses.
The Insurance Practice
This is a component of a practice that requires skill, patience, dedication, communication, organization, and resilience. All of these qualities are the very qualities needed to be successful in life, so an office should not run from working with insurance companies so they can avoid the pain, they should accept the challenge so they can develop their business model and be able to help more people.
The one problem with offices that accept insurance is that they don’t spend time on improving their skills at developing the cash, or out of pocket, portion of their practice. These skills can be discussed in another article on another day.
My final recommendation, don’t take the easy road. Use all possible programs available for more patients to come into your office. This will help build a secure practice for the future.
Dr. Tim Maggs has been in private practice for 35 years. He has specialized in the diagnosis and treatment of sports injuries throughout his entire career.
Dr. Maggs has been an active participant in sports as well, having run 16 marathons, spending many hours on his mountain bike, playing basketball and extensively working with athletes. His wife, Trudy, and four sons, John, Connor, Tim jr., and Tom, are all actively involved in fitness and a healthy lifestyle. John is a 2011 graduate of the Air Force Academy and Connor is entering his senior year at The Air Force Academy.
In the mid-1990’s, Dr. Maggs, together with 3-time Kenyan Olympian Joseph Nzau, developed a Kenyan training program in upstate New York. The team ran under the name of Team Stick. For 3 years, Dr. Maggs treated and traveled with the 20 plus runners to races all over the country.
In 2004, Dr. Maggs recognized the need for improved diagnosis and treatment of sports related injuries in the middle and high school age group. It was at this time he developed the Concerned Parents of Young Athletes™ Program. Dr. Maggs goal is to have all middle and high school athletes go through not only the standard medical exam at the start of each season, but also a biomechanical exam. This would look at the musculoskeletal system, in detail, and allow these young athletes to begin correcting imbalances, weaknesses and biomechanical faults long before they become injuries that create disability and premature degeneration. Today, Dr. Maggs works with athletes from more than 25 high schools, and is the Director of Sports Biomechanics at Christian Brothers Academy in Albany, New York.