8 Ways to Know Whether a Cash-Only Practice Is Right for You

Neil Chesanow

Disclosures

February 10, 2012

In This Article

Consider Your Situation Carefully

4. Quality of Life, Quality of Care

The Forrest Direct Pay Website features a practice transition calculator, similar to retirement savings calculators on financial Websites. This interactive Web application lets you design your practice's optimal business model.

Plug in your variables for desired quality of life (eg, how many hours you want to work per day, how many days you want to work per week, and how many weeks of vacation you want per year) and your desired quality of care (eg, how many patients you ideally want to see per day, desired mix of scheduled/continuity and walk-in/acute care patients, and how much time you want to spend with each scheduled patient), among other factors, and the calculator predicts how your direct-pay practice will perform financially and how long your transition will take. To access the calculator, you will need to purchase a membership for $79 per month.

5. Personality and Salesmanship Skills

Perhaps the most underrated factor in the success in a cash-only practice is the personality of the doctor.

"The biggest fear for doctors is that they have to be relatively good," reflects Vern S. Cherewatenko, MD, who founded SimpleCare. "A doctor can't have a horrible bedside manner and not give good care. Patients won't come back. I tell prospective SimpleCare doctors, 'You should only join if you're a good doctor. If you're just run of the mill, status quo, and don't really care about your patients, you probably shouldn't."

"You not only need to be personable," Moghadas says. "You need to be a seller: someone who's in the market to sell his services." Most doctors, in her experience, lack these skills because they never needed to develop them. "Maybe you went to Harvard or Johns Hopkins," she says. "But if you're dry as toast, you won't attract and keep patients."

6. Marketing

Doctors who are employees in a group practice generally have little or no experience with marketing the practice, Moghadas observes. For a direct-pay practice to succeed, effective marketing is essential -- and it can be daunting.

You need a good Website. It needs search engine optimization so that Web surfers in your area who are potential patients can find you online. You need to advertise. You need to attract local media coverage. You need signage. And you need to establish relationships with local employers and schools.

"You need to know what you're selling," Moghadas says. "Are you selling ease? Convenience? Accuracy? Doctors often think, 'I'm a great doctor. I'll just open my door and patients will come. That's not the way it works."

7. Going Cold Turkey

Once you make the decision to switch from an insurance-based to a cash-only practice, should you do it in one fell swoop?

"In most cases, we recommend against putting all one's eggs in a single basket," says Jeffrey J. Denning, a principal of the Practice Performance Group in La Jolla, California. "We advocate withdrawal from discounted plan participation 1 or 2 plans at a time, starting with the lowest-paying or low-volume payers, while you test the willingness of patients to continue on an out-of-plan basis."

8. Getting Expert Help

"Always use a practice management consultant," Moghadas says. "You want an expert to vet the viability of a move of this magnitude in your area. A consultant will help you determine whether this is something you really want to do."

A consultant will analyze your prospects for success locally; advise you on how to set up a cash-only business; help you establish a marketing program; and perform the education necessary for both you and your staff, which needs to be a lot more customer-friendly than many practices are used to, to successfully transition from an insurance-based to a direct-pay model.

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