In Part 1 of this article, we discussed how asking better questions will help put you in the right mindset when thinking about converting to a cash practice or simply leaving a payer. I also showed you a framework to help you decide whether or not you should leave.
In fact, the exercises that I shared in Part 1 of this article is critical if big percentage of your income comes from a single insurance payer. However, if you are considering giving a tiny percentage payer the boot, then you need to calculate one important factor into the equation: freedom.
For example: let’s say a payer is a small percentage of your total revenues and amounts to approximately $20,000 of your gross income. Replacing that $20k not only helps you eliminate the bad payer, it also produces more free time…always.
To understand this better, we need to revisit the general purpose of insurance.
The Purpose of Chiropractic Insurance Participation
Let’s first remember that insurance is an exchange of services. All things equal, you trade a discount of your fees for access to their network of patients. But that exchange becomes lopsided when the discounts become too steep, their network isn’t really producing new patients for you (because your own marketing and referral systems do) and/or when the number of hoops to jump through to get paid becomes too time consuming. Also, don’t forget to add a little misery to the equation with the everpresent chance of a post-payment audit where you would have the possibility of paying back money you have already spent and the lack of peace of mind that goes along with that wonderful opportunity.
Once you put those things into perspective, now you understand why dropping an insurance plan always produces more free time. Note: I’m not saying drop all plans. I’m not even saying all plans are bad. Too much free time on your hand also means you have no patients. But I am saying that you need to weigh the factors carefully.
Are You One Procedure Away From Freedom?
On the other hand, you may literally be only one service or procedure away from dumping that lousy insurance company. Case in point, a client of mine recently consulted with me to help me tweak his rehab department. He has a nice practice, been doing some rehab already, but was inconsistent in his delivery and, of course, this resulted in inconsistent profits.
We assessed the situation and his current strategies. One tweak and 30 days later, he enjoyed a $16,000 increase. Had he been in the situation above, with a $20k per year pain in the rump payer, all he would need to do is work month two with the same strategy and consistentcy and he could replace the boil in his side.
Certainly, not all decisions to keep or dump an insurance company are quite as obvious or easy, but I also believe that chiropractors at large tolerate a lot more abuse than they need to. And as a result, whine a lot more about all the nasty things payers are doing to them – without actually doing something about it.
Steering Your Ship Towards Cash
While I absolutely believe it’s possible to get out from under the ghastly grip of many insurance payers, steering your ship in a different direction requires two things:
1. The realization that things need to change (generally the easy part)
2. “Doing the Math” to Assess the details of the situation (See Part 1)
3. Developing a viable and proactive strategy to produce income to enable the change…without killing the practice
Unfortunately, most chiropractors are so busy trying to keep their plates spinning that they never actually slow down, think and do steps 2 and 3. As a result, the force themselves into trying to get more new patients and higher volume to solve their problems.
Stop and Think Along the Way
OK — stop the madness for a second.
If a patient has an insurance payer who doesn’t pay well, creates a ton of paperwork for you and requires you to be ultra-vigilant to make sure that every penny you earn will be kept…ask yourselves two questions. (a) Why do you want more of them? And (b) Will more of them necessarily produce more profits…or just more work?
Furthermore, what if your business model does not match the high volume mindset? There’s nothing wrong with high volume. But if that’s not your style, then why are you trying to jam the square peg into the round hole?
Take Control of Your Future
What the insurance participation question really boils down to is taking control of your financial future. Just as in investing and in life, there are some good calculated risks you make in practice. Participating in insurance plans is one of them. But note the word calculated. If you never get around to actually measuring, monitoring or calculating the risk of doing business with a particular payer, all you are doing is rolling the dice.
No wonder you can’t sleep at night. Every day you go to work, you continue to gamble your future hoping to beat the house.
Instead, you need to proactively keep or eliminate a payer in a calculated and strategic manner. This keeps you in the drivers seat because if you decide to dump the payer, you set up the timeframes and the conditions that will be ripe when you are ready to abandon ship. And if you decide to keep a payer, you’ve done the math to know why they are a valuable contributor to your bottom line.
To me, that kind of control not only puts money in the bank, but gives peace of mind. I believe most chiropractors would enjoy both. So, now is the time to go after it!
If you’d like to be in the driver’s seat more and to escape the insurance income roller-coaster, consider attending our upcoming Workshop, Escape Chiropractic Insurance Tyranny.