Practice Experience Podcast: Sustaining a Cash-Pay Practice

As rehab therapy and the wider healthcare landscape evolves, many practices have continued to look for ways to diversify their business models. One of the most popular approaches has been the cash-pay practice, which continues to evolve and take on many forms depending on the needs and wants of the individual practice.  Cash-pay practices are occasionally heralded as the answer to the golden handcuffs of insurance, but there are lingering questions around this relatively recent approach.  Are cash-pay practices sustainable in an environment where so many patients must rely on insurance for their care? And given that reliance, does cash-pay run the risk of excluding certain patient populations who still need PT? 

In this episode of The Practice Experience Podcast, Heidi Jannenga, PT, DPT, ATC, Co-Founder and Chief Clinical Officer at WebPT, and Dr. Keaton Ray, PT, DPT, Co-Founder and COO at MovementX answer those questions—plus more.

To help you sustain your cash-pay practice—or even get one up and running—the duo discusses subjects like: 

• alternative payment models in a cash-pay practice,
• misconceptions about cash-pay practices, and
• the need for financial literacy to sustain a cash-pay practice.

Episode Highlights

On the Evolution of a Cash-Pay Practice

Keaton: Over the last five to six years, we've evolved to be a fully out-of-network company with diversified payment models. That includes everything from direct-to-employer payment, worker's compensation, motor vehicle accidents, and contracting with government entities like correctional facilities. We've diversified quite a lot from just that traditional you pay cash for physical therapy services to alternative payment models that are not necessarily in network contracts.

On Misconceptions about Cash-Pay Practices

Keaton: There's an instinct for folks to solve [the issue of current industry headwinds] by just leaving their companies and propping up a cash-based practice. It sounds great, right? You have autonomy, you're going to make more money, et cetera. The misconception is that you can just leave a practice, prop up a cash-based practice, and then make all this money while being autonomous and having this great schedule. It is hard work.

On Soft Skills in Running a Cash-Based Practice

Keaton: You have to build value in the services you offer and master the soft skills that can be challenging when you historically don't need to have them in the in-network clinic. You have to be able to sell a plan of care, network your practice, and market it. This is not a “if you build it, they will just come" kind of scenario.

On Practicing to the Top of the PT License

Keaton: There's a large segment of our health system—and society—that is not benefitting from the cash-pay model, but I think there are ways we're getting there where we can start to service the rest of the community. From a cash-based model, I think the standard for physical therapy care delivery is improving. We're raising the bar because we're forcing our quality to be high enough that people are paying top dollar. 

On Financial Literacy in Cash-Pay Practices

Keaton: What financial literacy does is it allows you—the practice owner or independent contractor—to look at your income and say, “I need this baseline amount of income just to survive, to pay rent, to have food, to pay for childcare, et cetera.” This [amount] might translate to 10 patients a week. But if you see 15 patients a week, you can then take that income and still invest in things like a 401k, travel, or add it to whatever you're interested in pursuing.

On Getting Started with a Cash-Pay Practice

Keaton: I would say surround yourself with people who have done this before. We don't get a business education in school. You may get it to some extent as a clinic manager or in other mediums, but surround yourself with people who have experience starting a business because while it's not hard, everyone here is capable of doing it, you want to put your best foot forward. 

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