Inside One Successful Cash Practice with a Waiting List

How did your cash practice evolve?

In 1988 I was involved in one of the first HMOs in the State of Illinois. I felt it restricted my ability to treat my patients in the best way and discussed with my staff that we were losing our commitment to patients and restoring our commitment to the insurance industry. We needed to come up with an idea on how we could get back to being dedicated to our patients. One of the things we decided was if the patients had some responsibility for their own well-being, there would probably be more commitment to their health. That’s why we decided to go with the cash practice. I had total devotion from the staff in that area.

How did you convert your patients to cash?

We determined our plan on how we were going to switch the practice over and decided the first group would be our monthly patients. We started our idea in May of 1988 and wanted to have it completed by that September. We set a very short deadline to get the practice turned over and thought we were putting on a lot of pressure, but knew we had to be committed and directed in getting our cash practice going.

Any new patients who came in after May were told the practice was fee-for-service and were advised of the treatment plan and charges. The first group we switched was the once-a-month maintenance patients. Letters were sent to these patients stating that starting on their next visit the changes would take effect. The next month we went to our bimonthly group. The third group we turned over were weekly patients. After the patients had been coming in for a series of treatments, we explained our new policy. We didn’t use the word “rules.” We said, “This is our new policy.”

Did you lose any patients due to the changes?

Overall I would say it only affected about 5% of the practice. The change was done in a very nice, loving way.

As you switched each group, could you see there were no major objections?

Right, there was no objection because we believe in what we do. We know that in our clinic, they’ll get extraordinary care.

Can you describe the content of the letter you sent to your patients?

It basically said thank you for being a client of ours. It’s great that you take care of your health with chiropractic. Chiropractic has these benefits and so forth… Our office is going to continue offering these benefits; however, in order to do that, we want to focus your attention on your health and not your finances. We hope that you’ll continue to let us provide the care you need. You will receive extra benefits for this service­­and they did because we expanded into other avenues to help them get better. And that was generally the letter. It was done in a real gentle way.

I understand your waiting list is now booked a month in advance-how do you handle the overflow?

We don’t use the word “booked,” which implies hotels­­meaning you don’t care. “Scheduled” is the word we prefer. Yes, we are scheduled around 30 days in advance, so we refer people to other chiropractors in the community to help patients get immediate care. We care about them.

How long did it take before you were scheduled so far in advance?

About three years before we got to that point.

Do you employ any form of advertising or marketing?

The only advertising we do is local high school sports programs to support our community. We also advertise to support foundations such as Multiple Sclerosis and a local community arts center. The rewards are indirect. We also have approximately a one-inch ad in the Yellow Pages.

What is your policy for auto accident patients?

Auto accident patients are responsible for their services. They sometimes like to blame the other person for their problems; however, we let them know that once they start to take action for their own well-being, they usually have more success in their life and health. We don’t accept auto accident personal injury payment in lieu of the patient taking care of their own services.

Do you file any insurance for patients?

We use ProManager software, based in Washington State, which does our daily and monthly reports. However, we do not file insurance for our clients at all. The only filing we do by law is Medicare. Our Medicare clients reimburse us directly and receive their checks directly from Medicare. We take no responsibility for any insurance filing; therefore we take no responsibility for the patients’ financial life, only their health life. We try and separate the two.

How do you keep your percentage of collected revenue at 95%?

We set-up “bullet proof payment plans.” We have a very set payment policy that is explained by the doctor. The doctor must take financial responsibility for the practice and be willing to say, “Patient Smith, when you come in we’re going to give all this to you and this is what we’ll need from you to help us help you.”

Do you feel that unless the doctor talks to the patients directly, the message doesn’t get through as well?

Yes, because the doctor is the bottom line. If the doctor is not clear or wishy-washy, then the patient thinks it is not important to the doctor because we always talk about what’s important to us. As doctors, we have to talk about money because it is important. Dr. Jim Parker has always said there’s business, and there’s love and service­­and it must be a balanced scale. If you don’t have a balanced scale with business, love and service, one or more will falter.

Do you offer payment plans?

Yes, we set up payment plans; however, patients are very clear on what their responsibility is. For example, we explain ahead of time what their charges will be and make sure they understand them before we start. The key issue is making sure they understand the costs. People need to be trained how to be patients at our individual clinic. For example, we say, “This is what we’ll do and this is what you’ll do.” We set up plans of care and we also set up plans of payment.

Do you accept credit cards as a stop-gap measure for those waiting on insurance reimbursement?

Yes, we keep clients’ credit card numbers on file and they can pay a determined amount per week until they receive their insurance check.

Do patients tend to become inactive if they are not covered by insurance?

No. Because we don’t advertise, our patients come by referral and already know that if they want to come to us we don’t file insurance. We also explain this during the initial consultation. Some have said even if their insurance might not cover it, they don’t care because “Mrs. Smith has been coming here for three years, and she feels so much better.” That’s the kind of people we attract.

Was your practice in Elmhurst, Illinois similar to what you have now?

Yes, I opened my practice in 1984 and went to a cash practice in 1988. After that we patterned them exactly the same.

So it is duplicable?

Yes, I had never thought about it in that way.

How do you handle referrals?

When a client refers someone, he or she receives a complimentary visit. However, clients don’t know this until they refer because we don’t advertise the fact. We invest in the people that invest in us, and that’s our clients.

You refer to “clients” at times rather than “patients.” Why?

Because the word patient denotes sickness and client implies a professional relationship.

Have you ever worked with associates, interns or partners?

Yes, I had two associates in Illinois, and they were wonderful. I’ve always thought associates are terrific to share ideas with because you can empower each other. However, the keys I have found are to know and accept that associates are short term relationships. Associates must learn to trust and share with their doctors. It’s wonderful if done for the right reasons­­sharing, caring and empowering each other.

What are some of the obstacles you’ve encountered and overcome?

I’ve never had any obstacles. I have never received insurance obstacles because my patients are taught the only obstacle is themselves. Billing and setting up procedures for the right reasons never causes obstacles. I’ve never had any staff turnover due to this either because it’s not stressful. The person who says, “I can’t do it,” is their own personal obstacle.

What do others say are obstacles to the cash practice?

I have met chiropractors who tell me they can’t have a cash practice because of their financial obligations. I make a very good salary and I have the same financial obligations they do, I’m sure.

Would you suggest those doctors consider making monetary cuts?

I think people tend not to evaluate what their needs really are and how inefficient and wasteful they are in their practice. They need to get rid of some of those things.

How do you grow your patient base?

We develop our satisfied patients based on ethical procedures with results. We want patient participation and remind them to share their good health. That’s how we do it.

We teach that nothing in the world works without repair and maintenance. Not your car. Not your house. Nothing. We tell our clients that we are the repair and maintenance headquarters of Roanoke. They know they have a place to come for restoration instead of a quick fix.

How much time do you typically spend with a new patient?

We first set up a complimentary consultation, show a video and give a short history. We ask how the person learns ­­by what they see, what they hear or how they feel so I know how to communicate with them. At this point I go in­­ they don’t meet me first­­and we discuss what the person wrote down about their health concerns. I spend about ten minutes in consultation prior to accepting each case, although I don’t accept every case that comes in.

For new patients, my staff prepares the patient and I do the initial exam. We spend about ten minutes with them.

Please expand on why you find out how a person learns.

When we teach people, we must know how they learn. Someone may be visual, so I’ll use visual props. Or they may be an auditory person who is affected by what they hear, or they may be tactile and need to touch to get it. When I know how a person learns, I can get to the depths of teaching how they can be part of their own healing and how chiropractic can benefit them. It’s all about benefits. Nothing has value unless a person feels it has benefits.

What are your patients looking for?

Because we are a referral-based practice, they are looking for what their friend received. They are looking for a wellness potential of their health. Some are in pain. We teach them that pain is not the cause of their problem, but the result of their lifestyle. They may initially come in for pain, but when we’re done, they know they are here for their health. We re-educate them. It’s about training how to be a chiropractic patient. The medical model trains how to be the “quick fixer.” With chiropractic we are trained how to get our health.

What is the biggest advantage to having an assistant who is also a certified massage therapist?

If a client also wants a massage, then Caroline, who helped me with the exam, x-rays and treatments, is empowered because she already knows all about that person.

Will you explain your care for children?

We take care of children on a complimentary basis. If you’re an active patient with a child under the age of 18, the child receives complimentary care. We believe our children are our future and we need to invest in our children. If a parent comes to us, we honor their children by giving them a complimentary exam. A lot of people take us up on the offer. It doesn’t take that long to evaluate a child’s posture and make some suggestions­­they don’t necessarily receive an adjustment every visit. In the future you are creating a new practice for yourself.

Do you have a role model for your practice?

Dr. D.D. Palmer for being a pioneer­­he had no security for what he did, which opens up a multitude of opportunities because you don’t have a set pattern of what you think is going to happen to you. Also, Dr. Athey, a local chiropractor who taught me what it is like to run a practice; the late Dr. Joseph Janse, former president of National College of Chiropractic; Dr. O.T. Bonnett, the medical doctor who encouraged me to become a chiropractor; Dr. Dick Versendaal, who teaches Contact Reflex Analysis, taught me optimism with the patients and to give them hope; Dr. Larry Markson taught me precision and planning; Dr. Terry Yochum taught me the importance of looking at x-rays, that not to see is not to know, and to analyze a situation and analyze posture, not problems; and Dr. Jim Parker, with Share, gave me ideas on how to run my practice. I would call these people my mentors in chiropractic.

Did you have a specific practice on which to model your own?

No. I created mine based on the best of all of these doctors and what they have given me.

What are your practice’s goals for the next 12 months?

I don’t believe in goals; I believe in ideas, which are the principals I work from. My ideas are based on consistency of what I’m doing; working smarter, not harder; planning my day­­I keep mine real short, but when my day goes great, my life goes great; eliminating time wasters; enhancing telephone skills; marketing the business consistently­­and that means talking to clients; joining professional organizations; being willing to move on when things don’t work, and accepting it; making sure my needs are met every day; exercising regularly; continuing my education; remembering we’re all human and we all make mistakes; keeping things in perspective; choosing appropriate advisors; respecting mind and body cycles­­we’re not always 100%, 100% of the time and we must respect that; balancing work and professional life; and always acknowledging accomplishments at the end of the day.

What do you suggest for others who are considering a cash practice?

Become a specialist at health and wellness. Talk about chiropractic first. When patients come into a treatment room, we tend to talk about what we did on Saturday night too much. Don’t make small talk­­talk about chiropractic first. Start small; convert a few patients each month. Prepare your staff to encourage patients to pay and stay. Educate yourself and become confident in your techniques and your abilities. Review all procedures that cause stress and develop inefficiency in the office. Be committed to change. Set-up “bullet-proof procedures” ­­this is very important. Fix anything that is broken in your clinic, whether it is equipment or people. If they are not working out, get rid of them because they’ll hold you back. Do repairs; make sure your office is neat, clean and upbeat. Rest right. Talk right. Think right. Do right and you’ll be right.

What professionals do you turn to for advice?

My accountant has been one of my best advisors. It is imperative to have a good accountant who cares about you and the practice. However, I think bouncing ideas off other chiropractors is great, particularly very experienced ones. I find the best, most experienced chiropractors around and ask for their help and ideas. Also, read the journals­­what a wealth of information. Then share the information with other doctors. If there’s a doctor who’s not getting the journal, or you know they’re getting it and they need a particular article, make a copy and send it to them.

Where do you see the profession in five years?

We must be aware that medicine, physical therapists­­even sports trainers and possibly massage therapists are looking into chiropractic as their adjunct. It will be hard to limit their involvement.

In ten years?

Chiropractic will become challenged if we don’t come together and join our state, local and political organizations. We must understand where the voices are that represent us and give to these organizations. We must understand the baby boomers are only going to get older and need us more. We must stand together through our organizations that support chiropractic and the profession.

What would you like to add?

Chiropractic is a profession and a gift. If you’re a chiropractor, you’re already a leader in the health field. It’s exciting to see the new wave in holistic health. There are more conveniences through practice management, through our equipment and through the internet than we’ve ever had and our practices should be more efficient. Use your given time and efficiencies to build patient and family relationships. Read your journals, and take time to incorporate their helpful tips. Chiropractic Economics is my favorite journal because it gives Monday morning ideas and generates thoughts about others in our profession. I thank them for inviting me to share my practice. My favorite saying is, “If it seems too hard, it is probably because you are making it too hard. If you don’t think you can, you won’t.”

 

Vital Statistics

Annual net income: Six figures

Patient visit average: 200 per week

Patient visit frequency: 60-70

Patient mix: 80% female
20% male

Patient profile: Female
Age range: 40-60
High school education, or more
Employed, part-time or full-time
Interested in taking care of themselves

New patients average: 20 per month*

In practice: 5 years in Roanoke, Virginia
10 years in Elmhurst, Illinois

Size of metropolitan area:240,000 in Roanoke Valley, Virginia

Percentage of collected
revenue: 95%

Overhead percentage 40%

Charges: First visit (exam, x-ray, etc.) $300 average
Routine visits (adjustment, therapies, etc.) $37 average

Software used: ProManager

Number of staff: One front desk chiropractic assistant
One doctor’s assistant/certified massage
therapist
Two part-time high school students

Doctor’s hours: 7am-6pm, Mondays and Thursdays
8am-6pm, Tuesdays

Annual advertising/
marketing budget: $1,500 per year

Office size: 2,700 square feet

Office rooms: Four treatment rooms
X-ray room
Exercise/rehab room
Consultation room
Two doctor’s offices
Reception room with children’s area
Complementary health library
Two massage therapy suites

Other profit centers: Orthotics, nutritional supplements, orthopedic pillows, acupuncture

Adjunctive therapies: Acupuncture
Aroma therapy
Reflexology
Massage therapy

Seminars/conventions Parker Seminars/Share
Bill Esteb’s seminar
Acupuncture seminars
Foot Levelers’ seminars
Contact Reflex Analysis seminars
Dr. Cessna seminars on lab diagnosis

*When the number of new patients exceeds the allotted schedule, they are referred to other local DCs.

 

Pros and Cons of the Cash Practice

The Biggest Advantages

• Immediate rewards.
• KISS-Keep it simple, stupid-simplicity is the key.
• Appreciation is expressed.
• Money or “energy on paper” is used to educate the doctor and staff.
• Helps improve lifestyle-surroundings promote feelings of well-being.
• Reduces stress for those who feel insecure about what’s happening with the insurance industry.
• Know how to plan staffing, purchases, repairs and the clinic.
• No insurance paperwork.
• Patients pay freely and lovingly, resulting in less stress on them because they receive a benefit.
• Reduces overhead due to no insurance staff or time to follow up the insurance.
• More free time-the biggest key- there’s no value to money without time.

The Down Side

• The doctor must be empowered and committed.
• The doctor must be able to discuss money with clients-a lot of doctors cannot do that.

 

What sets your practice apart?

The Five Senses

To assist healing, we address the five senses. You may be a visual person who needs to see something aesthetic when you walk in a room. You may be auditory, so our environment has holistic music that is relaxing and calming. We also have holistic food and herbal teas for patients, but we don’t offer coffee and sodas. The herbal teas have different properties that help the healing process. For the sense of smell, we have aromatherapy. We believe in our healing that we’re providing the sense of touch. When you address all five senses, you treat the total person.

Complementary Health Library

We have one room devoted to a complementary health library. Patients can check out books and read about ideas and issues supporting their healing, such as diet, exercise and positive affirmation. September, is our “Chicken Soup for the Soul” month and we buy positive affirmation books and get rid of all the negativity and dumb things we read. We put out a big soup pot with a rubber chicken and 20 books. At the end of the month we draw names and put a message calligraphed into the 20 winners’ books­­sending good wishes and health from Advantage Chiropractic.

Positive Affirmation

We tell patients although you need time to help your health, you also need time to help your mind, which is so important in healing. We have positive affirmations throughout the whole clinic and patients see them continually as they are changed every few weeks. Our patients are continually bombarded with affirmations about how they are responsible for their own health.

Health Care Values

We spend time addressing health care values. When working with a patient, we’re not dealing with an illness; rather, their health care values. We all have certain values about how to take care of our health. It might be to pop an aspirin for a headache or to slow down and eat better­­it depends on your value system. Some patients’ values or habits need to be re-examined in order to change. You can’t get anyone to change their habits unless you change their value of the habits. We teach that health is something that can’t be bought back and let patients know if they put in the investment, the return will be higher.