5 Reasons Cash is King in Chiropractic
It’s no secret that more and more doctors are seeing the writing on the wall and converting to a higher percentage of cash operations. Many are going 100% cash as a response to the increasing regulations, decreasing reimbursements, higher operating costs, and overall frustration with the insurance based system.
Who could blame them? Most chiropractors would take an insurance free clinic over an insurance clinic any day, if they could know their income wouldn’t decrease.
For others, it is still difficult to let go of the old safety blanket. The third party payers. Separating from the old source of income is a scary thing, but what many doctors are finding is that the grass is greener!
We’ve surveyed a dozen 100% cash based chiropractors in the Midwest. All of whom operate on different cash based models, and none of whom submit any claims for reimbursement. Here are the top 5 reasons for their conversion to cash and why they’ll never go back.
- 100% Collections – Chiropractors historically would only collect anywhere from 70% – 85% of their billed services. Our surveyed doctors indicated that a major frustration in the insurance-based chiropractic world was their low collections numbers. It’s not fun to work your tail off and only receive a portion of your earned revenue. Their overhead doesn’t magically decrease when they don’t collect for all the work they’ve done. Cash chiropractors take payment prior to administering their services and collect 100% of their billed services. They go to bed at night proud of their hard days work and their service to their community, knowing that they have been fairly compensated for their work.
- Time Spent on Paperwork – Chiropractors, like other healthcare professionals, seem to perpetually be buried in paperwork. While cash-based chiropractors are still responsible for taking quality, effective notes on their patients, they are not relying on them to get paid by any third party financier. Nearly all of the cash-based chiropractors mentioned they are far less stressed and willing to execute their notation responsibilities in the cash model.
- Overhead and Operating Costs – Now that there is no need for an entire billing department there is far less necessity for a massive staff or payroll budget. The surveyed group had various sizes of practices and various offerings in their clinic procedures, however all of them could boast a significantly reduced overhead. Having a large operation is a good thing for many chiropractors and employing a great team is noble. However, in this day and age, a large staff is very expensive for a business owner and in the cash model, generating quality levels of revenue is far less dependent on extra staff members. Some chiropractors even boasted they were able to move into better commercial retail space for less cost because they need less space without the larger staff.
- Larger Pool of Potential Patients – As of 2015, the U.S. has roughly 8%- 11% of the population patronizing chiropractors nationwide. Why? The number one reason for people refraining from seeing a chiropractor was the cost or a lack of insurance coverage. Transition to a cash-based model allows for reduced new patient costs, more patient volumes and therefore opens up the target market. All but two cash-based chiropractors reported that they are seeing a higher number of patients that are new to the profession. Operating outside the regulations of insurance companies has allowed these doctors to market to and onboard a wider range of potential patients.
- Ease of Operations – Lastly, cash-based chiropractors have tended to focus more on the specific scope of chiropractic. Some continue to offer additional cost modalities, but many are simply charging a reduced cash price for chiropractic adjustments. Every surveyed chiropractor agreed that they are now operating in a way that is more enjoyable for them and allows for more stress free operations.
Cash-based chiropractic seems to be the business model of the future. Feedback from surveys and from experiencing the new world of insurance free operations only leaves us expecting more and more transitions in the years to come. Multi-site clinics like NuSpine in the midwest (Nebraska and Iowa) are leading the way with monthly subscription based models.