Recently, one of my coaching members asked me an interesting question: “Can you tell me the benefits of staying with XYZ insurance?” In my opinion, the structure of this question was excellent as opposed to the typical way most chiropractors seem to think about insurance participation.
Here's one reason why: the question was posed asking the benefits of staying vs leaving. The smart DC who asked it didn't automatically assume one or the other, but wanted to begin an intelligent discussion towards making the best decision for his chiropractic practice.
I've also witnessed too many chiropractors who were so eager to get rid of a bad payer (or all payers) that, without a plan, they ripped off the insurance bandaid and away with it went their profits.
So how do you make a decision to leave (or stay) with a particular insurance plan (or all plans)...without killing your practice in the process? That's what we will be discussing in this two-part series.
Common, But Flawed Insurance Questions
Thanks to the massive changes in reimbursements, auditing and an increasing number of hoops we have to jump through to get paid, many chiropractors are questioning insurance participation. In my opinion, this is healthy process; we should all have a good, solid rationale for why we do or don’t participate in a particular plan, payer or in insurance at all.
The problems begin to creep in with how these insurance questions are posed, as it may reveal some flawed thinking and therefore, may lead us to poor decisions.
For example, I get many questions from seminar attendees and coaching clients who ask “How can I dump ABC insurance and still survive?” or alternately, they ask “After I leave ABC, how do I replace the patients and the income?”
The problem here lies in the fact that either variation of this question involves reactive thinking. In other words, after I leave, what do I do next?
Better Outcome Through Better Questions
Typically if a coaching client asks me a question like this, my answer is…you’ve asked the wrong question. Instead, what you should be asking is “How can I replace the patients and income before I leave ABC?” or…”What can I do to motivate patients before I leave, so that they will stay on afterward?”
These questions are better because they are proactive. They keep us in the driver’s seat and allow you to feel in control of your practice (which is probably one of the reasons you want to leave insurance anyway).
Unless your bank account can weather some sizable storms, you must be financially and strategically in such a position that if 100% of your ABC insurance patients left, your ship would still sail. Until you are in that position, making the decision to leave any sizable insurance network (representing a large portion of your patient base) is like playing with fire.
Smaller insurance plans (with whom you have a tiny percentage of patients) can be left more easily. But you still have to be cautious about a mass exodus from many small plans. For example, if a payer only represents 5% of your income or patient base but you leave 5 of those plans, 25% of your practice (and income) is now gone. For some folks, there’s still plenty of wind available to keep their ship moving; for others, a 25% reduction in their practice will bring the business to a standstill.
How to Decide Whether or Not You SHOULD Leave
While asking proactive questions will lead you to better outcomes than reactive ones, you should not stop there. Probe a little deeper and ask yourself the following questions to help you decide IF you should leave a particular payer:
1. What percentage of your income is from ZZZ Insurance? Recently, one of my coaching clients shared that he collected $600,000 annually and one particularly offensive payer has caused two of his billing specialists to spend over 60 hours worth of time over the last several months fulfilling the payer’s endless requests for additional documentation. He was raw and emotional until he realized that this particular payer was responsible for 29% of his total income, which equaled $174,000. In many situations, the first step of doing the math helps put things immediately into perspective.
2. How many people live within a five mile radius of your office? The key behind asking this question (along with #1) is to gain perspective on how many patients would be affected by dropping this payer and how many prospective patients are out their to replace them. Losing 30 patients when you are surrounded by a sea of 3,000,000 people is a lot different than when you are in a small pond of 3000.
3. How many chiropractors are in that five mile radius? Obviously, just calculating total population is not enough unless you are the only DC in town. So, now divide up total population by how many DC’s.
4. What is the marketshare for XYZ insurance? Do some research and determine what percentage of the population (or how many people in total) XYZ insurance has in your area on their plans. There may be a little guestimating involved here, but marketshare varies widely from state to state. For example, in 10 states, there is one payer that dominates more than 50% of marketshare. If you’re in one of those states (Alabama, Hawaii, Michigan, Delaware, Louisiana, South Carolina, Alaska, Illinois, Nebraska and North Dakota), then tread carefully if you are thinking about going up against your local giant.
5. What’s your local chiropractic competition like? For some, you possess unique enough qualifications and you’ve positioned your practice to virtually eliminate any competition – great job. For others, you need to assess what the other chiropractors are doing. For example, if you are in a small town with only a handful of chiropractors and you are the only one who appears on page one of Google and who has any significant marketing presence in town, you’re in good shape. On the other hand, if there are 20 other chiropractors in your vicinity who do heavy marketing, have a bigger or better presence than you, then it may be more difficult for you to attract patients who are outside of the XYZ plan you intend to drop. (This is not to say it’s impossible, just more challenging.)
Start Planning Your Move (or Stay)
Dropping an insurance plan should not be a gut level, emotional decision you make without considering all the facts and formulating a plan. Hopefully this article will get you started moving in the right direction of being proactive by asking yourself the hard questions needed and doing the research required.
So if you long to leave a payer or go towards that attractive ideal of a cash practice, start taking the above steps so you can head there without destroying your practice due to poor planning.
That’s it for Part 1...in Part 2 we’ll discuss how to make replacing lost insurance patients a moot point…( in a few days time).
PS -- Did You Catch the Hidden Gem?
In the meantime, there was one strategy hidden in #4 that essentially can help you improve your practice and eliminate competition regardless of where you stand. Did you catch it? If you have positioned your practice well and if you are able to communicate why your practice is different from all others in your area, competition is a non-issue.
Regardless of where you stand on the insurance scenario, this would be one strategy to implement immediately because it will help you take your practice to the next level. See you in Part 2 soon.
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.
