Cash Is King — For Some Doctors

Once upon a time, patients would routinely arrive at your office with cash in hand.

It looks like what’s old might be new again, thanks to the ever-increasing stress over the time, paperwork, billing expertise, and hassle involved in reimbursement.

Autonomy over your business — and cash flow — are other reasons physicians are considering pivoting away from accepting insurance, Sam Patel, MD, founder of Astra Culture, a Chicago-based medical consulting firm, told Medscape Medical News.

“We’re seeing a huge evolution of cash-based models because it’s a more predictable revenue stream that can be quite lucrative,” Patel said.

The rise in crushing medical school debt is also contributing to an interest in cash-based income streams that bypass insurance companies, though only 17% of clinicians used cash-only, concierge, or direct-pay primary care models in 2020, according to Medscape Medical News data.

“We all know that it can take 30-90 days for reimbursements to appear and when we submit a bill hoping to receive $300 for a visit and receive $80 instead, it’s frustrating,” Patel added.

While the concept isn’t new — it’s also known as fee for service or direct primary care, which means patients pay with cash or a credit card at the time of the service — some doctors that provide elective services are finding it appealing. Topping the list of procedures that often aren’t covered by insurance: Medical weight loss; antiaging procedures; dermatology procedures, such as skin tag and scar removal; and hormone treatments.

For patients with high deductible plans or who are frustrated by long appointment wait times, having a doctor who accepts cash — and therefore is likelier easier to book an appointment with than one who is part of a large hospital system–based group practice — can be appealing.

“Patients want direct access to care, and they want price transparency,” Patel said. “It can take a long time to get an annual physical appointment with a primary care physician. For some, paying a doctor $300 for an appointment — and being able to secure one within a day — is well worth it.”

Before you go cash only, consider these points:

Transition Slowly

If you haven’t accepted cash yet — but want to — ease into the option and ensure you’re in a specialty that enables you to build upon the existing services your practice offers.

Initially, it’s wise to set up a hybrid model, in which some patients submit insurance and others don’t.

“You can lose patients if someone comes in for an insurance visit and you suddenly tell them you’ve transitioned to a concierge model,” Patel said. “Patients will say, ‘I don’t want to come to you anymore.’”

Let Patients Know Early

Alerting patients as soon as possible that you’re incorporating a cash-only side of your practice is exactly what Clinton Carter, MD, a family medicine physician in Tyler, Texas, recommends. Carter has a membership-based practice, in which he offers his 3000 patients unlimited visits — and full access to him and his team 24/7 — for a flat fee of $150 per month.

“You’ll want to send out a letter and let your patients know that you’re going to set up this part of your practice,” said Carter, adding that you need 300-500 patients at the outset for this to work, so it’s important to make sure this option will appeal to the members of your community.

It may help offer something extra that only you can provide.

For example, “with a cash-only practice, you have to offer something people will be willing to pay cash for since they’re already paying so much for health insurance,” said Melinda Silva, MD, a San Diego, California-based family medicine physician who transitioned 14 years ago to a cash-based practice specializing in antiaging, weight management, and bioidentical hormones. “What you’re providing has to be valuable to your patients and has to be something a large cohort of patients need.”

Be Transparent About Costs

Being transparent about costs is a must. Your practice should have a list of the prices of visits and procedures so that any patient who calls and asks, “how much is the procedure I’m having tomorrow,” gets the answer.

Up Your Business Acumen

Silva said that if you’re ready to begin transitioning to a cash-based practice, it’s critical to make sure you have 3 months of payroll set aside.

“If you don’t have that, you will be stressed,” she added. “Without it, you won’t be able to focus on patient care, and it’s likely that your business will flop.”

This is the right time to consider taking a fundamentals of accounting class, too, she advised.

“You have to have a grasp on your budget so you can know month-to-month how much cash you need to have on hand,” Silva added. “A lot of times doctors get taken advantage of because we weren’t taught about business in medical school, and we don’t know how our money is being spent.”

Be Careful of Consultant Scams

With more doctors shifting to new payment models and leaving the traditional medicine model behind, there has also been a rise in companies preying on doctors, warned S. Alexis Gordon, MD, a board-certified urologist and urology surgeon whose Southlake, Texas, practice now focuses on cosmetic-related noninvasive skin conditions, including Botox, fillers, and lasers for acne and skin rejuvenation.

“People take advantage of physicians like us who don’t know much about the business aspect of practicing medicine,” said Gordon, who established a cash-based practice in 2017.

“There are a lot of ‘consulting companies’ out there that pressure you into feeling like if you don’t hire them to help you start your business, you won’t make it or that you have to do certain things to be competitive,” said Gordon. “They’ll charge up to $10,000 a month for their services, even promising you that, with their help, you’ll earn X amount of income per year.”

For Gordon, the ability to run her own business has been “freeing.” A cash-only practice brings benefits, including greater cash flow, no more endless back-and-forths with insurers or receiving paltry reimbursement amounts, as well as more autonomy over your patients’ treatments.

“Every day, instead of dreading what’s going to happen next or having to fight for patients to get them the care they need, you get to take back control,” she said.

Lambeth Hochwald is a New York City–based journalist who covers health, relationships, trends, and issues of importance to women. She’s also a longtime professor at NYU’s Arthur L. Carter Journalism Institute.