Cash vs Insurance

Dec 12, 2022

Today, let’s get into a heavily debated topic: should you open a cash, insurance-based, or hybrid practice?

No matter where you go, someone will be complaining about insurance companies declining reimbursement. You’ll also hear that people don’t want to pay for physical therapy anymore. It can be frustrating, and it’s easy to complain, but the only people responsible are physical therapists. We decided to follow the medical model.

I operate a cash-based business, but the truth is that you can have a successful business either way. The question you have to ask yourself is, what problem do you want? You will have problems regardless of which decision you make.

With insurance-based models, you accept declining reimbursements and the necessity of operating at a higher volume to make enough money to survive and thrive. Insurance companies get to dictate how much you charge your patients, and over the years, they have decided to give less money despite the improvement of skills and accreditation of practitioners. Would you ever accept that in any other business?

The insurance-based model’s effect is that you can see more practitioner burnout, more equipment overheads with increased traffic, and the possibility of client service suffering. On the flip side, there’s a low bar to entry for clients and fewer hoops for them to jump through. I wanted to be in control of my own business, which is why I chose to run a cash practice.

I wanted a low-volume, patient-focused practice. I wanted time to improve my practice and my staff. The drawback is that there is a higher barrier to entry and you need to learn how to draw clients in. Ask yourself, what is best for you and for your clients?

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