Since my last post, I’ve been getting a lot of questions about how things differ between traditional PT practices and Cash practices, how I run my practice, and quite a lot of interest in how I market my services. So I’ll start this post with a brief overview of the logistics of my physical therapy practice in Austin, and this will give a basic context and background to my future posts. Due to the way many people frame their marketing questions to me, I decided to release the cash practice guidebook excerpt below to dispel a common misconception.
The basic logistics of my private pay physical therapy practice
I spend a full hour one-on-one with each patient and schedule 10 minutes between treatments to allow for taking payments, scheduling, cleaning the treatment table, etc. I allow for 5 treatment sessions a day, which gives me time to deal with administrative duties (email, returning calls, etc) and also keeps my hands from wearing down too quickly. I allow for “after hours” treatments if someone wants to get in right away, but the cost is almost double my regular rate. At the moment, it’s just me and my treatment table. No office administrator. No modalities or exercise equipment (aside from T-band and products that patients may need for their HEP). I charge $120/hour and that will likely become $150/hr this year. The Initial Eval is also an hour and costs the same as well. The majority of the treatment time is spent on Manual Therapy. Review/progression of the patient’s HEP is performed as needed, and usually takes 5-10 minutes of each treatment. My patient population ranges from adolescent to older adult, though I don’t have very many patients beyond about 65 years old. They tend to be quite active and a good number of them are high school or collegiate athletes, with a few professional athletes as well. The majority of my patients have a net worth/income that would place them (or their parents) in the middle class, though plenty would be considered upper-middle class, and some are quite wealthy.
The Rules of the Game Change … Significantly for an Out of Network Practice
Make sure the Medical Doctors in your area like you, but do not rely on them to continue being your primary referral sources. Even if you get better results than most/all other PT practices in your area, Medical Doctors are reluctant to send patients where they can’t use insurance. It’s nothing personal, they just know that most patients are adamant about using insurance.
When you start or convert to a cash-based practice, there’s no getting around the fact that you are moving to more of a niche market. But here’s a big misconception about your new market … it’s NOT “People with a bunch of money.” I have patients who seriously struggle financially who will see me, or send their children to me, every time anyone has an injury. There are also plenty of people with a huge financial surplus who would never visit me because I don’t bill insurance. When you start or convert to a cash-based practice (or just add cash-services), your new market becomes: “People who put a very high priority on functioning and performing at the highest level they possibly can, and are willing to pay more than the average person to do so.”
For the elite athlete (or their parents), that might mean being able to get that college scholarship or that Olympic medal; for a person with Fibromyalgia, it might mean being able to walk up their stairs without being stopped by pain or exhaustion. Highest possible functioning and performance is obviously different for everyone; but if your treatments provide outstanding results, and you can really differentiate yourself from the insurance-based competition, income level will have much less to do with who comes to your clinic than you think… it’s about where they place their priorities.
This all reminds of a question I received from Joseph Brence after my last post (thanks again Joseph!). It was regarding the apprehension of patients in his insurance-based clinic to do anything outside the realm of their insurance plan. I think he and many in our field who would like to add cash services, or convert completely to private pay, are wondering the same thing … “are there really enough people in my area willing to pay out of pocket for my services?” I wondered the same thing when I was getting started less than year ago, and I’d like to re-post part of my answer to him to address this concern:
“Something to consider is that when you own a clinic that accepts insurance, people coming to that clinic expect to use insurance. I know that sounds funny and self-evident, but what I’m saying is that the majority of the current patients you attract may no longer be your target market if you convert to cash-based services. But that doesn’t mean a market for cash-PT services doesn’t exist in Pittsburg. It just means you’ve been surrounded by patients that belong to a different market.”
So if you’ve owned or worked in an insurance-based clinic all or most of your career, you’ve likely been biased to thinking that ‘everyone out there’ is unwilling to pay for anything other than a copay. As a successful cash-based PT, I—and many others like me—can tell you this is not the case. When you realize this, and change your focus to the large number of people who are willing to pay you cash, it opens up a lot of possibilities. Like I said above, most of my patients are not wealthy by any means; and just because you may get less referrals directly from Medical Doctors, doesn’t mean you’ll have a difficult time filling your schedule. We need to stop relying so heavily on them anyways.
My next few posts will be excerpts explaining different aspects of how I find, target, and create clients out of this niche market of cash-paying patients.
Jarod Carter PT, DPT, MTC