July 2005

The biggest problem with the cash practice

by Dr. Peter Fernandez

Simply stated, the cash practice needs to attract twice as many new patients as the insurance practice in order to reach the same level of success. The good news is that this challenge can be met.

We have cash patients due to inadequate and overly expensive health insurance. Typically, they are the working class who can't afford great insurance coverage. It's not difficult to figure out why your report of findings results in a poorer conversion rate with cash patients than with those who have insurance. You must get a cash patient to accept your recommendations AND reach into his or her already slim pocket to pay for care. So, even with the most impressive report‑of‑findings skills, it's inevitable that you'll convert fewer cash patients than insurance patients.

I'm always awed at why someone would purposely choose to limit his or her market, yet this is exactly what doctors do when they choose to have an all cash practice. However, I respect the doctor's decision to do this and admire his or her commitment to making it succeed.

To better illustrate my next point, consider that your car needs repair and you have a choice between two different but equally competent auto repair shops. Would you pick the one where your repairs wouldn't cost you anything, or the one where you'd have to pay? This is the same type of scenario faced by insurance patients who come in to an all cash practice. Insurance patients are pretty savvy today and know that they can simply go online to check out their provider options. They're easily lured down the street where another good chiropractor happily accepts their insurance and patients get to keep more money in their own pocket.

When an insurance patient goes to a cash chiropractor and knows he or she can go down the street for a considerably lower out‑of‑pocket expense, it's directly reflected in a dismally low conversion rate of these patients. As low as the insurance patient conversion rate is, it's still a little better than the cash patient conversion rate. Why? Consider the fact that the doctor who chooses to have a cash practice has two treatment acceptance barriers to overcome with his or her patients.

The first barrier is getting the patient to understand and accept the importance of receiving the doctor's recommended care. The second barrier is to get the patient to reach into his or her pocket to pay for the care. This barrier is more difficult in the case of a cash patient, typically a lower wage earner who must manage his or her money very closely. In the case of the insurance patient, the doctor's challenge isn't so much in having to overcome the patient's concerns about spending money, but in motivating the patient to want to get care regardless of having to have pay a deductible, a higher co‑pay and wait on insurance reimbursement. Obviously, it's tougher to get people to reach into their pockets knowing that whatever they pull out is not going to be reimbursed, thus the insurance patient conversion rate is usually slightly better than the cash patient conversion rate.

However, there is a way to successfully elevate both the cash patient and the insurance patient conversion rates. The solution is to noticeably enhance the doctor's patient attracting image to the point where people will "walk barefoot across broken glass" to get to the doctor's office. The DC who accomplishes this will stand out in his or her community in a way so BIG that potential patients will choose him or her over another doctor, regardless of payment options.

Talk about standing out in a big way, consider the great Dr. Clarence Gonstead, developer of the renowned Gonstead technique. His patients traveled from around the world to receive his care. In his 70s, Dr. Gonstead had a desire to cut back on his work schedule and figured he would have fewer patients if he increased his fees. So to encourage patients to want to be taken care of by one of his superbly trained associates at a far lesser cost, he "doubled" them. The result? His practice went up! Why? Because he had achieved fame for who he was and what he did. The world saw him as the "expert" and patients wanted the expert to take care of them at whatever the cost. I'm sure Dr. Gonstead didn't realize it at the time, but having already attained expert status, increasing his fees only gave more credence to his superior image, thereby increasing the demand for his services. He inadvertently but clearly showed us that the answer to increasing conversion rates with cash patients or insurance patients in a cash practice is to create an increased demand for your services by being known as the chiropractic expert or authority in your community.

In recognition of and appreciation for what Dr. Gonstead was able to accomplish through his well‑earned professional fame, I've spent several years trying to come up with a way ‑‑ a big way ‑‑ that would help boost the expert or authority status of DCs in their communities, while promoting the worldwide advancement of chiropractic. As a seasoned author, the answer was so close to me I failed to see it, that is until I ran into an old friend of mine, Dr. Mark Victor Hansen, author of "The Chicken Soup For The Soul" books. Like a light bulb turned on, it was suddenly obvious to me that if the doctor's community knew that the doctor was an author of a best‑selling book on the type of care he or she provided, the doctor would be instantly elevated to "THE authority ‑‑ THE expert" status.

Most doctors don't have the time, resources or writing skills to produce a bestseller. I decided to gather a team of best‑selling experts, write my next book, and invite chiropractors to become contributing authors. While the project has been a five year focus for me, 1,000 DCs (fewer at this writing) now have an opportunity to become contributing authors to "Neck Pain, Neck Pain ... You Don't Want It, You Don't Need It" (if you're interested in becoming a contributing author, go to www.NeckPainExpert.com, or contact me directly). Contributing authors aren't required to write but must agree to review the chapters online and submit content corrections and recommendations.

Imagine the image creating impact of being able to include "contributing author to the best‑selling book, 'Neck Pain, Neck Pain ... You Don't Want It, You Don't Need It'" on your curriculum vitae (CV), in your advertisements, in your letters of introduction to other professionals, etc. Imagine the number of new patients you'll attract when your local newspaper and TV station announce that you're a best‑selling author on a book about the care of the neck.

As a contributing author, you'll receive a free marketing plan designed to help you get maximum benefit and exposure as a best‑selling contributing author. Think about the increased conversion rate of the many patients you'll obtain from your spinal screenings because you, the screener, are the authority, not just a regular DC. Also, think about the dramatic increase in patient referrals that will occur as a result of the greatly enhanced image you receive when you give "your" book to each of your patients.

Or, if you have the resources and would like to write your own bestseller, do it! Either way, it's an almost instant transition from best‑selling author to authority, and being known as the authority will greatly increase both your cash patient and insurance patient conversion rates ... the ultimate answer to meeting the cash practice's greatest challenge.

(Dr. Peter G. Fernandez, a 1961 Logan graduate, has authored 17 books, including "1001 Ways to Attract New Patients," now in its fourth printing. Using his new patient attracting expertise, he built his practice to include five associates and 12 satellite offices, and has since taught more than 15,000 other DCs how to do the same. Among the country's foremost authorities on how to attract new patients, Dr. Fernandez is also developer of the exclusive program ‑‑ Practice Starters ‑‑ that has helped open more than 3,000 successful new practices, and the world's first online video classes for chiropractors, www.MBAchiropractic.com. He can be reached at: Fernandez Consulting, 10733 ‑ 57th Avenue North, Seminole, FL, 33772; by calling 800‑882‑447; or via e‑mail, DrPete@DrFernandez.com. Visit him on the web at www.DrFernandez.com)