Why Healthcare Workers Should Start A Cash Practice

Sep 25, 2022 at 01:07 pm by Staff

By Jason Duprat, Founder — Healthcare Entrepreneur Academy & Ketamine Academy

 A cash-based practice is another name for a self-pay or fee-for-service private practice, wherein a medical professional owns and manages their business while also conducting medical treatments for their patients. The primary differentiation between a cash practice and a traditional private practice is the simple concept that traditional private practices accept health insurance — third-party payors — but cash practices do not.

It’s no secret that many healthcare workers are moving to private practice because of a major multi-faceted financial crisis in our industry. Whether the pandemic is actually over or not, it has exacerbated a pre-existing issue for healthcare professionals and brought it to light: affordability and burnout. Last year, a study of physicians reported a majority (79%) of healthcare workers felt their "burnout" had begun even before the healthcare crisis.


Telehealth and Insurance

While the precedent of healthcare workers managing their own private practices has been reported to be in a slow, steady decline, that trend may be reversing. With telehealth medicine becoming more prominent due to the pandemic and statistically just as effective as in-person visits, providers have realized how telehealth medicine can be leveraged to manage their own practice more efficiently. 

Telehealth offers providers an array of benefits, from much better work flexibility, the ability to supplement the in-patient care models, and the ability to offer a more convenient patient experience for routine care. Those providers who opt to provide telehealth exclusively can reduce overhead costs associated with brick-and-mortar practices. This allows for cost savings to be passed along to the patients. The telehealth-only structure greatly benefits both providers and patients.

This growing opportunity for providers to start their own self-pay practices can allow them to earn more, focus on providing the services they’re passionate about, and eliminate the hassles and payment delays associated with billing insurance companies. For all of these reasons, this model has been attracting a wave of new healthcare entrepreneurs from various specialties. The trend of providers making the transition to practice ownership is still on the rise; with technology constantly evolving, the gig economy has become more prominent in healthcare.


Self-Pay and Insurance

One of the most prominent driving factors for the increasing number of self-pay patients is the shift toward high-deductible plans. Many plans have high deductibles that the overwhelming majority of policyholders pay out of pocket for during most — if not all — of their routine care and annual checkups. Since most self-pay practices offer fast, convenient, and affordable care, many patients prefer to pay out of pocket for basic healthcare services; after all, who really wants to wait weeks for an appointment or be tied up in a waiting room for hours?  

Some patients can afford out-of-pocket services more easily this way because they can hold onto their money and pay for whatever service they need when necessary. When constantly paying into an insurance plan, they tend not to have the money to pay their large deductible before their insurance even starts working for them when they need it most. A report released by KFF revealed that “in 2021, the average annual premiums for employer-sponsored health insurance were $7,739 for single coverage and $22,221 for family coverage.” The average cost of premiums last year increased by 4% for single and family plans.

Providers are able to offer considerably more affordable healthcare services, and providers can treat their patients like consumers simply shopping for healthcare. Providers should price their healthcare services with what’s fair based on their experience and the overall quality of their skills. While cost is the number one driving factor for why patients seek self-pay healthcare services, they also understand that healthcare is inherently costly, but they aren’t fond of having to pay for more than what they actually need.


How It Looks

A great, more practical example of how this looks is looking at the aesthetics and MedSpa industry. In 2019, this industry was valued at $13 billion but is estimated to be worth more than $47 billion by 2030. Despite the pandemic, it hasn’t lost its value. Thankfully, as the stigma surrounding self-care has diminished, people are investing in services offered by medical spas to relieve stress and maintain their physical and mental health. Clearly, the self-care trend has greatly benefited the MedSpa industry, but it doesn’t have to stop there.

Another example is ketamine therapy, an industry that already thrives through a self-pay structure. Ketamine is the most effective antidepressant ever discovered and is also incredibly effective at rapidly terminating suicidal ideations. According to a report by PubMed, “a single dose…of ketamine infused intravenously over 40 min, or single intranasal dose of [ketamine] cause rapid antidepressant and antisuicidal effects within hours of administration, and the antidepressant effect may last up to a week. Repeated administration of nasal spray [ketamine] is considered to prevent relapse of depression.” However, this type of treatment is predominantly available on the self-pay market because most insurances don’t cover it. 

As providers consider transitioning to creating self-pay private practices and away from the burdens created by insurance companies, it’s important to recognize how such a move aligns with broader trends of increasing self-care and a greater focus on wellness and disease prevention. Healthcare workers are reporting record high levels of burnout, they are often underpaid, and frequently directed to provide on care that isn’t always what's best for the patient, resulting in a desire for change. This provider-led transition in healthcare may ultimately lead to a larger transformation in the healthcare industry, hopefully for the better.

Sections: Business/Tech