Blog Chiropractic Practice FreedomJul 13, 2023
Chiropractic Practice Freedom
By Dr. Michael Perusich
During this month of our nation’s independence, we celebrate the freedoms we have in this country and we can certainly be thankful for the God-given rights and privileges we enjoy.
However, on a daily basis, we often have a sense of being held captive by our practices, thus lacking the freedom we should have earned as entrepreneurs.
And, when you break it down, it makes sense. We are held captive by declining insurance reimbursement and the increasing number of rules. We are held captive to billing and payment cycles that can often take years to recoup our fees for services rendered. We’re held captive to audits and the financial risk they impose. We’re held captive by staff who at times shun our attempts at training and will easily leave you when other opportunities arise. We’re even held captive by patients when they don’t find value in your recommendations and drop-out of care.
Let’s look at some examples.
In the last few years, insurance reimbursement has declined and continues to decline. In order to maintain your profits, especially when costs are rising at a rapid rate, you only have a couple of options. You can raise your rates, or you can increase your capacity and see more patients.
However, when you analyze both of those scenarios, the reality is they don’t solve your freedom crisis. Raising rates in an insurance-based practice only serves to increase your write-offs. It doesn’t improve profitability.
Increasing your capacity and creating more collectable services by seeing more patients can (emphasis on CAN) increase your profit margins, but it does come with side effects. Most notably, adding more patients to the schedule in order to increase revenue will increase your workload, and staffing requirements, and potentially expose you to more audit and litigation risk. Also, increasing capacity will likely cause more dropouts which can ultimately damage your community reputation.
The good news is freedom can be found in Chiropractic practice. It’s on the cash side of your business.
The cash practice has no exposure to shrinking insurance reimbursement, the cost of billing, and the expensive staff required to manage an ever-growing capacity to offset the decline in profits.
The cash side of practice also makes your job a bit easier. While you still need to diagnose and document appropriately, you are not having to prove medical necessity to determine if care is billable to insurance or not. This frees up your time to be in more revenue-producing mode.
In addition, the cash practice tends to have a higher retention rate, which reduces the dependence on a constant high-volume flow of new patients. Again, this frees up your time as you are not performing as many exams and report-of-findings which are typically not profitable when you compare those events to your practice hourly collection rate.
As an added bonus, when you remove the third-party-payor from the equation, patients have a tendency to find more value in your care recommendations and will retain longer in the practice.
The bottomline is that the cash side of the practice is where you find the freedom you deserve. Practice should not be difficult…it should be fun and rewarding. When you focus on developing the cash aspects of your practice, you find practice freedom and the profitability that comes with it.
If you need help developing more of the cash aspects of practice, touch base with us via our website below. We’ve been helping doctors successfully establish cash services for years.
Dr. Michael Perusich is a solutions-focused advisor with more than 25 years of success across the healthcare and consulting industries. His broad areas of expertise include coaching, training, content development, and motivational speaking. Dr. Perusich is the CEO for Kats Consultants, LLC. where he and his team offer a unique platform of business knowledge and tools for today's Chiropractic entrepreneur.