Robert Cohen M.A., P.T. has had a successful, 100% cash-based physical therapy practice since 1996 and has agreed to share the insights he has gained about the private-pay business model over the past two decades. I’m guessing there are other cash practice owners who have been operating this long, but I don’t personally know of any. I’m so excited to be interviewing Mr Cohen and bringing his incredible experience to us here on this site.

“You’ve had a cash-based physical therapy practice since 1996, so first of all, congratulations on your success in this model … especially back when PT insurance coverage was great and copays/deductibles were comparatively low.

Tell us how you got started and why (even back in the mid 90s) you decided to go private-pay.

I decided to open a cash-based practice to give me the freedom to treat patients the way I thought they needed to be treated. Prior to opening my practice I had worked for 2 different PT groups that received reimbursement from insurance companies. In the state of Maryland that meant I was allowed, on average, to treat 3 patients an hour. That model provided me with about 10-15 minutes of direct patient contact, which is not how I wanted to practice my craft. When I was in physical therapy school from 1990-92, I discovered manual therapy and knew instantly that it was the way I wanted to practice. After graduating from school, I began to take extensive continuing education courses from the Ursa Foundation in Edmonds, WA that taught me how to treat the entire body using manual therapy from an osteopathic perspective. After listening to lectures from Ursa’s founder, Loren Rex, D.O. several times per year for 4 years, I knew that I could make a substantial difference in patients’ lives, but needed more hands-on time with each patient to do so. Accordingly, I decided to go out on my own and set up my practice the way that I wanted to do it. So in 1996, I took the plunge.

Another reason I decided to open my own practice was so I could manage my professional and family time better. My son, who was 6 at the time, was just beginning to play sports; and managing my own schedule allowed me to never miss one of his games from the recreational leagues all the way through high school. For many years, I was able to coach his teams.

What are the general logistics of your practice: setting type, treatment length, employees, rates, patient population, etc.

My practice is located in a wellness center in which I share space with an acupuncturist, 2 massage therapists, and often a social worker. While we each run our own individual practices, we share the waiting room and common areas. The center is located in a part of Baltimore that is between 2 affluent areas and has easy access from downtown and the highway. My individual office is several hundred square feet and consists of a treatment table and a desk with just enough space to watch someone’s gait.

I am the only employee of my company, which means I do it all. I answer/return calls between patients, change the sheets, do the laundry, treat the patients, do all the paperwork, market the business, etc. The key to running a successful cash practice is keeping your expenses down. I typically treat 5-7 patients per day with each session being an hour. I see new patients for 1½ – 2 hours to allow me to do a thorough evaluation as well as a treatment. The first session costs $275, with each session after that being $160 for the hour. I usually see patients once a week at most. After each session, I give each patient a bill with the appropriate diagnostic and procedure codes so that they can seek reimbursement on their own. I ask for payment at the time of service. I do provide treatment plans if their insurance company requires it.

My patient population is a varied one. My focus on treatment is to restore proper physiological function on the cellular level so the body can heal itself and eliminate the pain that brings them in. While most patients present with orthopedic injury complaints, I often find that the source of the problem is both biomechanical and autonomic-visceral in nature. My clinical judgment is deciding which avenue of treatment to pursue and usually is some of each. One minute I might be correcting a dysfunctional talus or SC joint and the next minute doing some visceral manipulation, lymphatic drainage techniques, or balancing the autonomic nervous system. So in 1 day, I might see someone with a sore knee, a patient with migraines, a person presenting with lower back pain stemming from a uterine origin, and a patient with upper back pain from a respiratory illness. I truly see it all but feel comfortable with my training and my ability to offer something to just about everyone.

How do you think the marketing of a cash-based practice must differ from that of an insurance-based practice in order to be successful?

The marketing of a cash practice has to be totally different than a traditional PT practice. When I was just starting out, I did what everyone else did, which was to visit with physicians to explain my treatment approach and ask for referrals. That was a colossal failure. Most physicians had no idea of how I was practicing or what my business model was. Many already had established relationships with other physical therapy practices. I quickly learned I needed to take a different approach.

Because I also have a Master’s Degree in Exercise Physiology and ran several health clubs prior to going to physical therapy school, I went back to my roots. My message was much better received by fitness/personal trainers, yoga instructors, pilates teachers, massage therapists, and acupuncturists, and they became my key referral sources. I tried to get speaking engagements at health fairs or with the staffs at the big health clubs in the area.

My practice is now on a totally word-of-mouth basis. I do not pay for advertising and do little outside marketing. The physicians who refer to me now are all ones who I was able to successfully treat one of their patients when no one else could. They were willing to listen to me after the fact, when they were not willing to do so at first. I guess the take-home message is that if you want to do something that is non-traditional, your marketing will likely have to be different as well.

With all these years in business, what has been the biggest ongoing challenge of running your cash practice?

The biggest challenge is most definitely time management. I have to be as efficient as possible and really try to manage my time well as I have to do everything. While I still have many 12-14 hour days, I also need to find enough hours to spend quality time with my wife and son, exercise regularly, go out with friends, and study/read to stay current and improve my skill set. That being said, having the ability to set my own schedule helps me to do that and allowed me to coach my son’s soccer and baseball teams for many years.

If you had to name just a few, what have been the keys to your enduring success in the private-pay business model?

I think there are several. You have to be stubborn and unafraid. I started my practice when my son was 6, and I was the only wage earner. My first week I saw 3 patients. The beginning was really scary, and I was always looking to supplement my income in case it did not work out. In hindsight, starting more gradually and not quitting my full-time job might have made more sense, but my circumstances did not work out that way.

You have to have confidence in your abilities being that you have to ask people to pay directly for your services. In the beginning, I felt very shy about asking people to pay out-of-pocket, but I quickly realized that they did not hesitate to write the check.

You also need a really good work ethic. This route is not an easy one. Doing something different never is, but if you want it to be successful, you have to work hard. It isn’t for everyone. Most people will tell you that you have little chance to be successful, but I was stubborn enough and worked hard enough to last 17 years and have no intention on stopping now.

If you had one final piece of advice for someone considering starting (or converting to) a private-pay practice, what would it be?

You have to be really good at something. No one is going to pay you directly if someone else will take their insurance for the same service and will get the same results. You have to find a niche and do something few other people are. For me it was manual therapy. I have been able to get good results with patients that had already been to many other practitioners who did not help them. But I have worked really hard to become good at my craft. While the state of Maryland requires me to have 30 hours of continuing education credits over a 2 year period, I get over 100 per year. I am willing to travel to the West Coast to study with Dr. Rex and Lino Cedros, ATC, MT, SP, CAMTC at the Ursa Foundation 4 to 5 times per year because they provide me with the skills I need to be successful. But I am the one that makes continuing education a priority. Being good at what you do is vital, no matter what it is.

On behalf of all the followers of this site, I’d like to thank Robert Cohen for sharing his time and knowledge with us.

Truly before his time, Robert wrote an article about the cash-based business model for Advance magazine back in 1998. It’s so cool to see that most of the marketing approaches and other principles that lead to private-pay business success are the same today as they were in the 90s.

If you have any questions for Robert, please post them in the comments section below.

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