Some therapists will tell you that cash-paying clients are rarer than sabre-toothed cats.
So when I was hanging out in my Facebook group Private Practice from the Inside Out w/ Tamara Suttle last month and asked “What would have to be true for you to feel confident in moving forward in your practice today?” I was not surprised with the answers I got from you guys.
Many of them mirrored Anne Barker‘s response by saying “To know with some certainty that I could maintain my current income after de-paneling from that one last insurance company.”
If you are like Anne and want to move toward more cash-paying clients but experience a good deal of anxiety around this decision, here are 5 simple steps to minimize your risk and maximize the likelihood that you too can transition to a cash-based practice.
Step 1 – Personal & Professional Values
Start by taking a few minutes to remind yourself of how a cash-based practice is (or isn’t) in sync with your personal and professional values and goals.
Do you want to have more time to spend with your family?
Do you believe that your job is to counsel anyone and everyone that contacts you for services?
Do you believe you deserve to be able to pay your bills, support your family, and still have time left over to enjoy your life today?
Do you enjoy working directly with managed care companies?
Your consideration of “Why cash and why not managed care?” may be very different from mine and, if so, that’s fine!
You just need to be in touch with your truth concerning a cash-based business and make your choices based on that truth.
Step 2 – Your Written Truth
Assuming that you still want to grow a cash-based business, write down your truths – the values that are in sync with your goal.
The reason this is helpful is that it forces you to face and own what you believe to be true.
For example, if part of your rationale is that your family is your number one priority and you need to be making more money in order to cover your mortgage and put food on the table, that’s really important!
Or, if you are living under so much financial stress that you may lose your office and the domino effect is that you will then not have a place to see any of your clients, that might be really important to take into consideration, too.
Whatever your “whys” are, write them down and refer to them often until you have reached your goal.
Step 3 – Know Your “Baby Steps” Goal
Your next step is to determine what percentage of your income is currently dependent on you working directly with managed care.
Is it 100%? 50% 15%?
Whatever it is, know that number and think “baby steps.”
There’s nothing that says that you need to abruptly go from being 100% dependent on managed-care to 100% managed-care free – even if that’s your ultimate goal.
Step 4 – Hold Space for Cash-Paying Clients
Consider carving out space on your calendar to hold for just 10% of your ultimate goal for cash-paying clients.
For example, if you are currently seeing 20 clients each week and filing their insurance for 100% of them, consider setting aside 2 hours each week on your schedule (for a total of 10% of your caseload) just for cash-paying clients.
If you have spiritual beliefs that line up with this, you may want to consider this an act of faith.
Or, If you believe in The Law of Attraction, then you may see this as the Universe conspiring with you as you simply creating space for cash-paying clients to step into.
Or, you can simply hold space in your schedule as “a test” because I’m suggesting it to see if you are able to expand your bottom line and work a little less.
Whatever your thinking, when choosing which time slots to hold open for your fee-for-service clients, I want to encourage you to choose the time slots that are most in demand (by your clients) slots rather than those that are least-requested.
In doing so, you are telling your clients that you are committed to making this shift in your practice.
You are honoring your own values and staying committed to and focused on transitioning your practice to a cash-based business.
Step 5 – Commit to More
And, finally, once you are consistently filling your cash-pay time slots on your schedule, it’s time to carve out and commit to an additional 10% on your calendar.
If you’re building your excitement and courage by doing this, consider carving out an even larger percentage to commit to!
Here’s the deal . . . .
It doesn’t take very long to see that if you are currently being reimbursed by insurance companies $50 / hour for your 20 clients that you see weekly, in one month you will earn $4,000.
By carving out just 2 hours for your fee-for-service clients that are paying $100 / hour and filling those time slots, based on the fees noted above, you will change your pay mix to insurance paying $3,600 and your cash-only clients paying $800 for a total of $4,400 / month.
Now . . . maybe that $400 difference is all you want or need to make you more comfortable and less fearful in your business.
Or, maybe not.
That’s entirely up to you!
You get to decide that.
But, if not, consider this – If you move only 25% of your schedule to weekly cash-paying clients at $100 / hour and you fill those time slots, you are now bringing in $2,000 / month from those cash-paying clients and without the hassle or the paperwork required for what would have been a mere $1000 / month!
And, if you move and fill only 50% of those original time slots to your full fee of $100 / hour, you’ll be bringing in $4,000 / month from those cash-paying clients!
Just remember . . . all-or-nothing thinking is “stinkin’thinkin’.”
It was true when our families of origin taught it to us.
It’s true now when our clients show up with it.
And, it’s true when we bring that same mindset into our businesses.
When you find yourself slipping into that victim-thinking that “I have to stick with managed care or starve,” I would encourage you to challenge that thought.
Choosing to work directly with managed care is exactly the right choice . . . for some therapists.
But, if it’s not the right choice for you, step out of your “stinkin’ thinkin’,” know that there are lots of right ways to build your private practice, and choose what feels most “right” for you.
And, if you are a therapist who has already disentangled your practice from managed care or is in the process of getting off of preferred provider panels and transitioning to a cash-based practice, please take a moment to when you read this post to offer encouragement and a little cheerleading to those who have not yet taken that first practice-altering step to do so.
I look forward to hearing from you!