October 2007

Cash and Point

by Dr. CJ Mertz

One of the first questions my clients ask when they begin their rigorous training process is, "do I have to go cash?" I say of course not, but here are a few reasons why you might consider it in the future. Ten minutes later, their second question is "how soon can we start?"

Outside of the United States, virtually everywhere else in the world, chiropractors run cash practices. Invariably, those chiropractors are happier and less stressed. They have higher retention, more referrals ‑‑ and more profitable practices.

The average practice ‑‑ beginning our coaching program at 80% cash, 20% insurance ‑‑ is a mean, lean, healing machine!

I interview all my clients, and the number one reason they're afraid to go cash is the thought that not being on various insurance plans will prevent new patients from calling them. Nothing could be further from the truth. They also think that accepting insurance will help patients afford more care and therefore stay under care longer.

Their own statistics prove otherwise. So why has it taken so long for chiropractors to convert to a "clash‑like" practice? In order to answer that question, we need to first understand the paradigm that most chiropractors are still stuck inside.

Relief care isn't what excites chiropractors, it's just what they believe is the only option to get patients to start care. But, when relief care chiropractors get the big idea, they begin converting their practice to corrective care. The good news is their patients want it and choose long term corrective care. The bad news is, co‑ payments dilute the value of care and patients often quit care early in the process.

When chiropractors get on‑purpose with corrective and wellness care, and they learn to have their patients pay them directly, everything changes. They are always amazed to find that patients gladly send a claim form into their insurance company, and have the insurance check sent to them. Surprisingly, when patients pay the chiropractor directly, the retention of those patients is more that double!

The insurance‑based model is burdened with accounts receivable monies not collected that were serviced weeks or months before. Typically, one (additional) CA is assigned to a full‑time roll of processing insurance claims. So, often claims must be submitted several times and insurance companies ask for additional information, leading to even longer delays.

It has been estimated that by the time a single insurance dollar is collected, it is actually worth less than 60 cents. If overhead is running at 50%, there less than 10 cents are left before taxes. That's why the most common results of an insurance heavy practice are high stress, low retention, high overhead and low profit. This is certainly not a formula that inspires chiropractors in their practice.

I am not saying insurance can't work because that's not true. I am definitely saying that most practices are plagued by it and that it is keeping them from building stronger, better relationships with their patients. Fortunately, the process is highly predictable for those chiropractors who are ready to take control of their future.

Chiropractic has always been cash‑based, and will always be cash‑ based. If you know how to be successful with cash, then insurance (as a minority percent) can work. You can lead a profitable, corrective and wellness care practice, and experience great passion in your work every day.

Notoriously, cash‑based practices have a much higher percentage of children and whole families under care. Perhaps, because the whole conversation of insurance coverage is quickly diffused, leaving the focus centered on the educational process of the natural healing.

If you believe insurance is really keeping you back from moving forward in your practice, call me and get the answers you need.

(Dr. CJ Mertz is the founder and head coach of the prestigious Waiting List Practice chiropractic training organization. See the WLP 300 patient per week opportunity on the back page of this issue. For seminar tickets and information on WLP coaching services, please call The Waiting List Practice at 877‑TEAM‑WLP).