The Insurance Trap: 3 Reasons Why Chiropractors Need Cash-Based Services

Welcome to the Practice Builders Podcast hosted by Dr. Vince Leone and Dr.

Kyle Pankinen, your source for building cash services.

Let's dive in. Hello and welcome to the Practice Builders Podcast. I'm Dr. Vince Leone.

And I'm Dr. Kyle Pankinen, and we're excited to be with you for another episode. Today we're gonna have Dr. Leone introduce our topic. Boom!

Today our topic is very tactical because we felt tactical today. So the top three reasons to add a cash-based service to your practice, and you know it's 2025, and we have lots of technology available to us. We have a wide scope of practice. So let's go ahead and dive into these top three reasons, Dr. Pangkinen. What's number one?

Number one is to avoid the insurance, the daily grind, the battle of traditional chiropractic that is heavily dependent upon insurance. And Dr. Leone and I both know what this is like to be caught in the insurance trap. I did it for years in practice. I'll be ending my 24th year of practice here in a couple 3 months. And for the first 14 years of practice, I lived in this world where I was almost completely dependent upon insurance and trying to build a volume and doing traditional chiropractic, a lot of neck and back pain, and seeing insurance reimburse me $15 for an adjustment, $22 for an adjustment, for electrical muscle stimulation, $10 or $12, uh, for ultrasound, $10 or $12, for maybe a set of x-rays, $30 or $40. And to try to live as a family on this, and then to try to grow your volume year after year after year because you think, oh, if I just treat more patients If I just treat more patients next year, I'll finally get ahead. And you're just—you're busting your butt. And after 14 years of that, I looked at my wife. I said, "I treat a lot of patients this year." We built up our volume a lot, and we got nowhere financially. I mean, we were just getting by every month. paying the bills with little to nothing left over. Yeah, that's where I finally got it through my thick head. Something needed to change. And so, I think you can relate to that experience a little bit, too, in your early years of practice, Dr. Leone.

I got a check for $1.89 from an insurance company, and I was— that was the turning point for me. I was like, this is ridiculous. Is this really what I'm worth? I just— I have, you know, $200,000 in student loans, and I'm getting a check for $1.89. I mean, it was, uh, honestly, it was humiliating. Um, and that's when I started thinking there's gotta be a better way. Um, and that's when I went in, went into, um, into the neuropathy niche actually, right? Very soon thereafter. Um, and, uh, I, you know, look, insurance companies are obviously never going away. They make so much money, but their goal is to keep as much money as possible. And so they're making not only chiropractors, PTs, MDs, like, you know, uh, naturopaths, like everybody's feeling this, uh, pinch is like they're just making us jump through more and more hoops to get less and less money from them, right? And so when you let someone else dictate your value and what you're going to get paid, it really puts you in a position of inferiority, right? You are beholden to them. And, you know, by and large, I don't really recommend doctors go all cash because that can be a pretty challenging model, especially if you're not like really sharp on marketing. But, um, I mean, it can be done, right? And it, and it, a lot of doctors, not a lot, I would probably say there are definitely, um, you know, quite a few doctors in our profession that do well on cash. I would say the vast majority do not, right? So I just think that you need to diversify because insurance companies now are like preauthorization. Now it's like you got it every 6 visits, got to go back to the well and prove why you need more visits. So I'm not recommending that we get out of insurance altogether. I think that what you can do, especially, you know, You know, like maybe at the beginning of the year, or if you haven't done this in a while, is do an insurance audit, right? Look through all the insurance carriers you are, you know, subscribed to or in-network with and see which ones actually, you know, are worth staying in and that are paying you decent, and then which ones are not. And then get out of the ones that are just terrible, right? I think that would be an excellent exercise. But, you know, Overall, insurance, it's not going to get better. That's the big— I think the thing that we really want to grasp is it's just going to continue to get more and more difficult over the years. So if we're looking out the next 5, 10, 15 years, hey, you got to protect yourself, your practice, and the future of that.

Yeah, insurance reimbursements. I mean, I've been in them for 24 years now, and I've not seen any Substantial increases. If they give us increases like, oh, they're paying 50 more cents per adjustment this year, or 23 cents more, and some years it goes down a percent or 2, but overall it just basically has remained flat over 20-some years. And so if with inflation, with the cost of everything going up and up, if you're just seeing the same, say, 100 to 150 patients a week that you were 5 or 10 or 15 or 20 years ago and you're still just doing the traditional chiropractic insurance model, you're going behind. Unless you're— the only way you can make up for that, docs, is you got to see a big, big volume. And we're talking, I did, you know, nearly 200 patients a week, just straight up insurance model. I could, I could barely make it at that. And most chiropractors nationwide, we know, only see—

10.

$100 to $120 a week.

And the average collection per visit's around $50, right? Hey, Doc, really quick. Thank you so much for tuning into the podcast. If you have found value in this, please consider sharing it with a friend or colleague. We want to reach and help as many doctors as possible. Thank you in advance. And back to the show. You know, because sometimes you get $27 from Medicare, sometimes you get $80 if you throw in a Uh, therapy. But on average, I think it's around $50, right? So if you're seeing 100 a week and you're doing $5,000 a week or $20,000 a month, if you're doing 200, you're doing, uh, $10,000 a week or $40,000 a month. But the point being is, yeah, it's not going to get better. Maybe it stays the same. But, um, they're, they're in— it appears like they're trying to take more and more control. over the relationship and who is deciding, uh, what care they get, right? I mean, they're taken out of the doctor's hands almost.

They are, yeah. If you don't fall within their treatment guidelines as they lay out, if you're an outlier in any way, you're going to have to go through a much more rigorous process to get any visits approved. And if, you know, you take a few too many x-rays compared to your colleagues, suddenly you get knocked down a tier. I am in Minnesota, which is the ultimate managed care state. And so all these managed care organizations have different tiers of providers. In order to stay in the top tier, you basically cannot see your patients hardly at all. You can rarely take an x-ray on them.

Right.

And, you know, so they limit you. So you can, you can get in that top tier and we'll give you a little extra reward or bonus. But basically, you haven't hardly seen your patients at all and you didn't do the necessary diagnostics that they sometimes needed. So are you really any further ahead for being in the top tier? And then, and then if you're not in the top tier and they're going to punish you by giving you more paperwork to do just to get grovel for a few extra visits. I know this is a lot of bellyaching about insurance, but the bottom line is we're just trying to come across a point that if you're stuck in that traditional model, you need to move beyond that or to start thinking, broadening your horizons and thinking outside the box.

Yeah, I mean, we basically want to diversify our revenue streams. Right? And so you just want to be thinking, hey, I'm going to have a revenue stream through insurance-based services, and I'm going to have a revenue stream in cash-based services. And you can divide that up via niche. You know, you can have your chiro revenue for, uh, for insurance. You can have your decompression revenue. You can have your shockwave revenue. Like, but you do want to diversify your revenue streams so that You know, there's more stability through diversity. So, um, so that's number one, insurance. We, we need to make adjustments. You know, really the best time was years ago to start doing this, but the next best time is now, right? Is, um, and by the way, a cat— like, cash does not mean, oh, you're charging someone, like, that's your cash for cash service price for your adjustment. We're talking about adding services, right? And we'll talk about that in just a second. Next, number two of the top three reasons to add a cash-based service is avoiding the commodity trap, right? And so I'm going to jump into this if that's okay, Dr. Pankinen. Yep, go ahead. Because I'm passionate about this. You know, the the traditional chiropractor, right? They're they're they're doing the the high or trying to do high volume, right? Most doctors really don't get there, to be frank. But they're trying to do the high volume. Low fee, heavy insurance, and it's for common neck and back pain. And the problem with this is if you're doing common neck and back pain, um, in other words, you know, they got headaches, they, you know, whatever, there's just— you will be seen as a commodity because there are so many options. There's all the other chiropractors out there, right? One on every corner. There's all the PTs out there. There's all the massage therapists. There's Advil. There's you know all types of pills, potions, and lotions, and gizmos and gadgets that you can get on Amazon. There's just there's so many options for common neck and back pain. And so what happens? This is why you get price shoppers and people that want to come in for a deal, where they come in for an adjustment or two and then they leave because you're seen as a commodity. It's like soap, and I'm not comparing. A chiropractor to soap necessarily. I'm just saying, hey, if you go in to see and you're going to get a bar of soap, well, they're all about roughly the same price, they're all kind of doing roughly the same thing, and you're probably just going to get the cheapest one, you know, unless, you know, you really like the scent of another. Whatever. Point being is you want to, you want to try to avoid the commodity trap, right? You want to You want to specialize, you want to be unique and different. And, you know, adding a cash-based service is one way to do that. What are your thoughts on that, Dr. Pankin?

Yeah, when you're stuck in that commodity trap, the only way some doctors can maybe find their way out of this, if they're just really, you know, a world-class exceptional adjuster, and they— or they have a Charismatic.

Yeah, huge personality.

Huge personality. And they're that, they're that 1% in our profession that can, you know, they open the door and they're just— people flock to them and they see 400 and 500 and 600 patients a week and they just run them through and, and people love them. And there are those clinics out there, but for—

They'll go to a dinner at a restaurant and they'll leave and they'll have like 3 new patients. You know, coming in the next day. Like, some— it's very rare. My dad was like that. Um, and, you know, like, you hear like these huge, like, doing $1,500 a week or something ridiculous. Like Dr. Zaino, he's, he's one— an example of like just this really, really big personality, which that's phenomenal for them, right? But it's just, it's like the— like you said, it's like the 1%, if that, right? It's like probably the 0.5 It's just a very rare thing to have this massive, you know, this, this personality. Um, and I just don't like the odds.

Yeah, I agree. That's a tough— you need to start thinking outside the box here, Doc. And that's what we're trying to show. Because if you're just, you're just on the corner and you got your, in your little town and you're in your little office and you're just doing traditional chiro insurance-based model and you're just mostly getting people into the neck and back, It's hard to break out of that if you don't start thinking outside of the box. And we just think there's such great potential to, at this point in our profession, with all the different technologies and niches and stuff, this is a great time to add in these cash-based services, which I think brings us to our 3rd one, correct?

It sure does, Doc. Good, good intro or good segue. Number 3, Is you get to diversify the type of patient. So you get to— number one, you want to, you want to try to mitigate insurance, right? Number 2, you want to avoid the commodity trap. Number 3, you want to diversify the type of patient. In other words, if you can, you know, get like a shockwave unit— so shockwave is like the new shiny object in chiropractic, which is great because it's a really great tool. But if you have a shockwave, Well, now you don't have to just treat neck and back pain. You can treat shoulder pain, you can treat knee pain, you can treat foot pain, like pretty much almost any musculoskeletal condition. And, you know, charge $100 or $125 per visit, and you do have a 12-visit plan. Well, that's, you know, $1,200 to $1,800 or something in that neighborhood of a cash plan. It's like your singles and doubles. Um, and so, and like Uh, you know, like Dr. Pinkerman was saying, sometimes patients don't want to come in for chiropractic at all. They— but they, but they do want to get, you know, whatever that condition is— shoulder, knee, hip, uh, foot, whatever that musculoskeletal condition is— they want— do want to get it taken care of. And most people are— they're attracted by technology, right? They like the latest and the greatest.

Yes. And so I get patients that come in frequently because we do some marketing for like our laser And one of our key phrases we, we do is deep tissue robotic laser therapy.

Yeah.

And I routinely get patients in that, yeah, they don't necessarily— they want to see you, but they don't necessarily want traditional chiropractic. They, I want that laser, Dr. Cobb. I want that laser because I read about that chronic pain ad that you had, or heard you talk on the radio about it, and I'm interested in that laser. These people are usually people that have probably been to other chiropractors before. They're used to traditional adjusting or instrument adjusting techniques, but they're usually people that are suffering from some type of a chronic pain. They're sick and tired of taking a drug. They're tired of shots, and they've maybe tried traditional chiropractic before. But hey, you have this new tool, this new shockwave, this new laser, and they're intrigued by it. And they well should be because it's, it's, it's advanced modern technology.

Yeah.

That produces tremendous results. And so their odds of getting improvement with these technologies are very high. I know because I see it every day in my practice. And so you're gonna develop this whole side revenue of business or this, this stream of patients that are coming in Not just for traditional neck and back pain, and maybe not just traditional chiropractic either. And so it's easy to see how this can multiply quite quickly in practice. And I don't mean to say this disparagingly, but I find most chiropractors aren't the greatest extremity doctors in the world as far as extremity adjusting or even evaluation. But If you have these tools in practice, you know what? Doesn't take much. Where does it hurt? And you aim and shoot in a sense. It's a little more nuanced, a little more complex than that. But in a sense, you know, you're going to help probably 80% of these extremity cases by doing just that.

100%. And on top of that, it can be staff-driven, right? So it's now You get to kind of multiply yourself. I mean, you're going to do the evaluation, right? I mean, obviously you got to do the exam, or at least in my opinion you should. But then, then you just hand it off, right? Hand it off to a staff member. They do the treatment and they do all the subsequent treatments. You get the revenue. And, you know, now we at Specialized Practice, we combine all these therapies together, right? And treat tough conditions like disc and, you know, osteoarthritis of the knee. Mm-hmm. Peripheral neuropathy, etc., and into bigger care plans, right? That are more in the around five thousand. But you don't have to do those big plans if you don't want to. You know, if you have a good laser and if you have a good shockwave unit, you can do what we call singles and doubles, where you're just you know treating kind of mild to moderate musculoskeletal issues, typically extremities, right? That Uh, you know, that, you know, patients, they, they suffer from this all the time. And the thing is, uh, and it's really easy to market to your existing patient too. I mean, our patient base, we'll do a whole nother episode on marketing these, um, these therapies and how to do it the right way. But, um, suffice it to say, uh, if you don't have like a shockwave or a laser and you add it, you just start, you know, marketing that. you know, to your existing patient base and in very simple methods. And all of a sudden, boom, you're going to start getting patient after patient after patient say, hey, I want that shockwave, I want that laser, I got an elbow, I got a shoulder. And it's just a really, really easy way to increase your cash services.

And the way to do it, docs, is just straightforward. You, you do a good workup, do a good exam evaluation, determine their diagnosis, and then you just simply lay out 2 potential plans for the patient.

Hmm.

One is whatever you, Doc, have normally done up until this point in your career for X, Y, or Z condition with the tools that you currently have. And now, okay, now you implement this new laser or this new shockwave into practice. Okay. Your second plan is, or what we would call our, our silver plan and our gold plan. Our gold plan is whatever you normally would've done before, Doc, but now you're gonna add in your laser Or your shockwave. And usually for acute conditions, you're looking packages of 6 to 8 sessions. For a little more chronic condition, maybe a package of 12 sessions. And, you know, then you explain to them, well, why, why does— why is this service going to benefit you, Mrs. Jones? Well, it's going to decrease your pain quicker. It's going to stimulate healing. And it's going to reduce inflammation. And doctors around the country are using this with phenomenal success. You can keep track of your own statistics as far as that goes too. And more patients than not, in my experience, are gonna say, yeah, I, I want that new technology, especially if it's, you know, a package of 6 or 12 sessions. It costs them hundreds of dollars, not thousands and thousands of dollars. Most patients are gonna want those and they can afford that. Not all, but most. And over a course of a year, week by week, day by day, if you're hitting singles and doubles over a course of a year, that adds up to a lot of extra revenue that you didn't have. You know, easy, easy to get an extra $5,000, $6,000, $10,000 a month of revenue just, just from an addition of a shockwave or a laser.

Oh, 100%. Um, and I think, you know, maybe a bonus reason. So we have, we have those top 3 reasons, right? Um, but a bonus reason would be just like, hey, just keeping up with the times, right? I mean, patients— patient expectations these days are higher than ever, and they really expect you to stay up to date with technology. Um, and otherwise, you know, otherwise you're going to get price shopped. You know, and they're gonna just kind of, you know, if they have kind of low expectations for themselves, they're gonna probably have a pocketbook that reflects that. But, you know, a higher quality patient expects you to stay up with the times, right? Just like, you know, with any business, we expect it to operate efficiently, have modern technology, and, you know, you don't go into a grocery store and see them like, you know, calculating things on a, on a, you know, little, you know, calculator thing. You know, they, they, hey, it's all just in, done by the computer. Swipe a card, you're done. Um, you need to do the same. You need to keep up with the times. And, um, for what these things cost, I mean, I don't know, Shockwave's like $20 grand, $30 grand. It's like a small price to pay. Um, laser, good ones are a little bit more, but regardless, this investment in your practice, investment in the future of your practice So I think any last thoughts on that, Dr. Pankinen?

I think I just leave you with what's, you know, what's possible. You know, I'll just give you a little taste of what I've seen personally. I mean, when I started implementing cash-based services in niches, I was like 90-95% insurance-based. And now Going down a few years down the road of doing this, I'm almost 50/50. So I still have my traditional chiropractic practice. I still have all— I, I'm a provider for almost all the insurances, and we still get people that call, are you a provider for my insurance? So they look up and that's why they come. But almost every patient that walks through the door, we are now offering them Some type of cash-based service, be it if they're a niche patient, chronic neck or back for decompression, chronic knee for knee niche or neuropathy. But so we get some of those every month, but we get a whole ton of patients that are just we're adding on laser or adding on shockwave to their traditional treatment protocols. And so now we've built a practice where we're almost 50% insurance and. 50% cash, and we've been able to double our practice from what it was years ago. And almost all that growth has been cash-based. And for the— and for the— for all the years I struggled, now I see it's like, oh man, I wish I would have done that much earlier in practice. Because it would have lessened a lot of stress on my wife and my family and our business and our marriage. And now, you know what? There's a little breathing room. There's a little leftover a month. There's a little money to go on vacations and take some time off, and it feels pretty good. So, that's what's possible, docs, if you are willing to step outside the box and— take a minor little risk and to add some of these cash-based services.

I love it. I love it. So, that's going to wrap this episode up. That's top 3 reasons to add a cash-based service. 1, mitigate insurance. 2, avoid the commodity trap. 3, diversify the type of patient that you can treat. And then the bonus there was just keeping up with times and patient expectations. So, that's going to wrap it up for this episode. Hope this was super valuable. For you. If it was, please share this with a colleague. Um, if you feel like it could help someone, that'd be great if you could share it. Um, and, uh, if you can give us a like and subscribe, we would appreciate that as well. So for Dr. Pankinen, I'm Dr. Leone. This is the Practice Builders Podcast. We'll see you on the next episode.