The fastest way to infuse cash into any practice is by becoming what I call a Health Care Advisor or HCA. What's an HCA? It's a concept I've been teaching since I taught my first nutritional boot-camp some 15 years ago, in October 1996.
The End of Insurance
There is very little doubt that having an exclusive insurance-dependent practice puts chiropractors at serious risk and makes going to work every day very stressful, clearly undermining the passion we all have for practice. So what is the best way to infuse our practice with cash as fast as is reasonable and even more importantly establishing a game-plan for staying there?
Adding cash-based products and converting to more cash treatment plans within chiropractic practices is happening in large numbers in the chiropractic profession, in fact more chiropractors converted this past year than at any other time in our professions recent past. How do I know that? A recent survey this year of chiropractors showed that cash just might be "king" after all.
With insurance companies tightening their belts and reimbursement rates to chiropractors dropping to a three-year low, more chiropractors are turning to some type of cash-based practice philosophy. By the way, the survey revealed that the chiropractor today that is moving towards cash is not a new doctor recently out of school. The typical cash-converting chiropractic respondent was 51 years old, with 90% of them owning a solo clinic and the average time in practice was 21 years!
What that clearly tells me is the seasoned chiropractic "vets" have had enough! They see the writing on the wall and are taking the "bull by the horns." BRAVO! What are we to do, sit around and go out of business? Most chiropractors that have been in practice for twenty plus years also heard the stories from our founding chiropractic fathers before chiropractors were ever on the insurance "soup-line."
Many old-time chiropractors went on record and said that the inclusion of chiropractic in the insurance world is the worst thing for our profession and may eventually lead to its downfall. Well, I don't want to predict that type of a disaster, but things in the insurance world for chiropractors do look bleak to say the least.
The Cash Advantage
One of the major reasons doctors are switching to cash products and fees is the troubling trend in insurance reimbursement. In 2011 chiropractors who billed insurance companies their average fee of $71.00 found that they only received $45.00, an unbelievable 63% reduction! However chiropractors that charged the same $71.00 in a cash practices reported netting $68.00, which was a fantastic 96%! Come on, what more do we need to know to begin the transition?
The New Game Plan
I have been teaching chiropractors for years to establish a business plan that has a majority of their revenue in "retail" sales products. I use to say you should plan on 40% from retail sales and 60% from your chiropractic services. But in light of the insurance slide, I strongly now feel the numbers should be reversed to 60% from retail sales and 40% from your services, or at least begin the transition to a much higher percentage. I know of chiropractors that have in excess of 80% of their cash flow in retail sales. This is not to say there not doing chiropractic, they are, it's just to say they have figured it out and would rather "switch" then fight and go down in flames.
Chiropractors Are Making This Way Too Difficult
My wife goes to an esthetician that does facials in her private 600 square foot salon. The lady charges $150.00 cash for one facial treatment or if you buy a package of 10, you get a 50.00 cash discount and only pay $99.00 each. Get this, she writes out a check to her on a regular basis for $990.00 right on the spot. Why? She wants the facials and she wants to save $500.00. And of course there are the creams and oils that she needs that she can purchase right in the reception room, along with, believe it or not, nutritional products that help slow down the aging process. I know you might find this hard to believe, but this person makes 60% of her revenue from retail product sales and only 40% from her services. She is putting chiropractors to shame by generating a whopping $50,000 to $70,000 cash every month, all without the hassle of insurance reimbursement.
What Ancillary "Cash" Product Will Increase Cash Flow The Most?
I think it's fair to say that the most recommended ancillary product in the past in the typical chiropractic office was the cervical pillow (See Page XX). Even though that product is still a valued cash item to recommend, how many pillows can a patient purchase? You need to at least do what the esthetician does and recommend something that compliments your services and is a consumable, reusable retail product. By that I mean a product that your customer buys, consumes, and repurchases every month from you.