The following question/statement is one I commonly hear so I felt it was time to post my answer for all to see … “How are you convincing patients that choosing self-pay physical therapy is financially better for them than their insurance-based options? I understand the promise of longer sessions and higher value attention as it relates to results, but how do you justify it for them mathematically?”
Great question, and it’s something I do address in my Austin cash-based practice! Some components of the answer are pretty straightforward, but some of it is quite variable and you’ll need to know how to help prospective patients “run the numbers” based on their individual insurance/financial scenarios. These numbers will also change based on what you are charging, but let’s look at some hypothetical examples and you can adjust the numbers where appropriate.
Cash-Pay PT for those without Insurance
For those who do not have insurance (which is quite rare at my clinic) your rates will often be lower than what they will have to pay at an insurance-based clinic, so the numbers are pretty simple and usually not a hard sell for these patients.
Cash-Pay PT for those with a High Deductible
Similarly, for those with a high deductible, they will likely be paying as much or more for each visit to a standard insurance-based clinic until that deductible is met. It is easy to convey the logic of going cash-pay for the longer one-on-one visits and higher-level care you can provide in your cash practice. Also, make sure to let them know that your clinic’s receipts can be sent as self-claims to be applied toward the deductible the same way they would if the insurance-based clinic sent them. (Please note: some insurance plans have in-network AND out-of-network deductibles in which case the application towards an out-of-network deductible is not as much of a selling point since most people are only concerned with meeting their in-network deductible.)
Cash-Pay PT for those with regular Insurance and Copays
If they are paying a copay for PT (let’s say $25/visit) but only receiving about 30 minutes of one-on-one care (usually less), and being asked to get 2-3 treatments a week for 6-8 weeks. That would equate to $300 on the very low end and $600 on the high end. Let’s say with your treatment techniques and longer one-on-one sessions, you can get the same results with one treatment per week for 4-6 weeks, charging $100/visit; the range they’d be paying you is from $400 – $600.
So the amounts they pay can end up quite similar, and depending on how quickly you can get them better (and how high their copays are), they can actually save money by going the cash-pay route. You of course cannot guarantee this for every patient, but you do need to mention that this is a common scenario.
Something else to consider (and remind them of) is the TIME cost of having to go to the PT clinic for so many more treatments when using insurance. What is it worth to them to have 25-50% fewer trips to the PT clinic? What would that added time and productivity mean for them?
Let’s also not forget about the value of feeling better sooner. If they get back to their sport or beloved activity a few weeks earlier, that carries a huge value for many people. What would it mean for their productivity at work if their pain with sitting is resolved twice as quickly because they went out-of network to your clinic? Though we are veering away from actual financial amounts here, it should still be brought to their attention (on your website, when you’re speaking with prospective patients, etc), because this is a significant point.
And finally, don’t forget to mention that your services are HSA/FSA-eligible medical expenses, just like any other PT clinic, so they should consider the savings of being able to pay with pre-tax dollars (if they have an HSA/FSA plan). Here’s a hypothetical example of this savings: $100 treatment fee x 25% tax bracket x 7.65% medicare/soc sec tax = $32.65 in savings … somewhat equivalent to only having to pay $68 for your treatment sessions.
Most of the above points, of course, rely on you being able to consistently get people better faster than the average PT who is limited in the time they can spend with each patient. If you are not providing a service that is truly higher value and more effective than the average, insurance-based offerings in your area, it doesn’t matter how the math works out. This is a keystone of the success of any private-pay physical therapy practice. But if you produce results, you’ll find many people are willing to pay out of pocket.
Did I miss anything? If you have other points you use to financially justify your cash-pay PT services, please leave them in the comments below and share this post with your colleagues.
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A great post. I always retweet and share posts like this.
I think that across the board, PT’s need to work much harder to be better advocates for their patients and for our field. There are way too many HUM job PTs still pushing the status quo in “treatment”. I evaluated a client last night who’s been through the PT “mill” set up in two different settings. His exact words to me were, “I have no confidence in PT”. This is truly sad and disappointing. You can guess what his treatment included for his lateral elbow pain in these settings… short story, his pain is reproduced 100% by tensioning his radial nerve. When I explained the treatment and performed some gentle gliding movements for him, he seemed angry and satisfied at the same time. Angry, most likely, because his previous PTs didn’t take the real time to ddx his issue and satisfied, I hope, that he has real information about his pain and a clear plan to ‘all-the-way-well’.
Moving more of our talented and dedicated colleagues into a cash practice model is a HUGE step in reestablishing value in our work and trust with the public.
Coincidentally, I recently did a podcast show on this topic followed up by a blog post. I’ve attached the links below in the hopes to even further arm our colleagues with the info they need to move into this exciting and rewarding model of practice.
http://www.blogtalkradio.com/sparkphysio/2013/05/13/why-cash-practice-physical-therapy-may-be-better-for-you
http://sparkphysio.blogspot.com/2013/05/why-cash-practice-physical-therapy-may.html
Thanks for writing, Jarod. I enjoy keeping up to date on your work.
Best,
Carlos
Completely addicted to your podcast! Thanks for the extra dose of inspiration Carlos!
I am a pediatric OT and thus clients tend to receive therapy services for much longer than your examples.
Do you have suggestions for this population?
Thanks
Great post Jarod I use a lot of that in justifying the cost of PT to my patients. One thing I found that has really helped me is having a handout ready to give them with a graph (Find it here https://twitter.com/JNFeldman/status/340433634408423424/photo/1).
My clinic is located in a busy fitness facility and I have a lot of “drop in potential patients”. I found quickly that I could sell them on the value of seeing me but they might not do such a good job when they go home and their significant other would convince them to try using their insurance first. I have had a much higher conversion rate since I started handing this out. I even used the graph on my website and have gotten a lot of positive feedback about that as well. Feel free to copy it (http://www.feldmanphysicaltherapy.com/rates-and-insurance.html).
As always thanks for the great topic Jarod.
Justin
Jarod,
Again, excellent post, there is not much left to add. This is an important issue and a topic that comes up often in my world. Highlighting that patients will miss less work has even been a recent addition to my definition of benefits of cash based physical therapy.
In my practice I have not found that I’ve converted anyone on the phone when the answer to “do you take my insurance?” is that we are out-of-network and your first visit will be… and then explaining how they can benefit, or after directing them to my “insurance benefits worksheet.” For most people not “taking their insurance” is the deal breaker. Some people do pause and think about the cost before committing, however those are typically patients referred by other patients. I have had a few patients that I know of contact me, then try an in-network practice and subsequently call me back weeks or months later to schedule.
I was talking about this exact topic this week with a cash based chiropractor here in town and he reminded me that we need to be mindful to highlight the benefits of seeing “us” rather that talking about what we are not. He said that the traditional PT’s/Chiro’s are the ones that should be making excuses for why they practice in their model. In our model the patient is truly 1st and our product honors the patients we see.
For me, having the information on my website is what works best and when people have a chance to read, learn and digest it there, I find that then they are ready for what I have to offer when they call.
Justin, your flyer and breakdown of the costs is awesome!
This type of financial breakdown is something that I know, and I feel it is important to educate people about but how can you “prove”/describe the facts to someone who is not even aware of what PT really is? and has no clue of the value of what we have to offer is different? I met a PT a couple of weeks ago who personally has a $100 in-network co-pay. The last therapist his wife saw had to issue them a refund for $20.
Carlos, your information is also very valuable to your patients and the public and I will be listening to your podcast shortly.
I think what we need to do is educate the public with out being too negative or cynical, but at the same time being faithful that “our people” who are ready to take control of their health and benefit from our services/product will find us.
I just want to thank all three of you for your fantastic contributions to this post.
I think this guy copied this article right onto his website without giving you credit as though he had written it himself. Just thought you should know. http://www.rpmphysicaltherapy.com/Resources/Facts-on-Cash-based-PT-for-Patients/a~8113–c~357407/article.html
Jarod,
Thanks for sharing this! It is an important conversation. As patient’s co-pays keep rising, and they begin to realize that they *are* paying for their healthcare with hard-earned dollars, it opens up the possibility of educating them on WHY we do things the way we do and WHY we believe we add value. As Warren Buffet says, “Cost is what you pay, value is what you receive.”
Keep up the good work!
Ann
Stealing that quote, Ann!! AWESOME!
It’s refreshing to find that there are like-minded PTs out there who are working to restore this kind of integrity to our field of practice. I brag about our skills a LOT but if the status quo remains, our skilled hands will be hidden from view forever.
For a while, I thought I was fighting this battle on my own. Value-First-Movement-Specialits UNITE!!
I’d like to thank everyone that contributed to this post, because it was a very worthwhile read. I started doing cash-pay PT in CA because I knew a friend of a friend that was unsatisfied with his HMO PT care: 3 visits, generic exercises, ultrasound, and was discharged with minimal relief of symptoms and the old adage, “it’ll get better with time.”
I treated this person. He got better, and returned to sport. He told his friend about me. Who told his friend, and so on. All of a sudden I became a pillar in the community for patients without a way. In my community HMOs seems to rule a lot of the PT world, and I’ve been capitalizing on just picking up the pieces. I’ve been lucky in this regard, because I don’t like to talk poor about anyone in the profession, but subpar care has made me look like a hero.
I’m not saying that all HMO PTs do subpar work, but if a patient comes to me unsatisfied with their prior PT care, then I get very excited because I pride myself in winning them over. I like to convert non-believers of PT into believers. And in doing this, I believe more will follow suit.