E754 | Making The Move From Insurance To Hybrid Practice With Yves Gege

Transitioning to a Hybrid Physical Therapy Practice: Navigating the Changing Healthcare Landscape

In this podcast episode, Doc Danny and Yves Gege delve into the growing trend of physical therapy practices shifting from insurance-only models to hybrid models that combine both insurance and cash-based services. This transition is becoming more crucial as the physical therapy landscape changes, with insurance reimbursements decreasing and costs rising. Here’s a breakdown of the key points discussed in this insightful episode.

The Changing Landscape of Physical Therapy

The physical therapy industry has been experiencing significant shifts in recent years. Insurance reimbursement rates have been steadily declining, while the administrative workload and costs for clinics have continued to climb. For many practices, especially smaller clinics, it has become increasingly difficult to maintain profitability while relying solely on insurance-based revenue.

As a result, many clinics are exploring the hybrid model—a blend of insurance and cash-based services—to create a more sustainable and profitable practice. This approach can help clinics navigate the economic challenges of running an insurance-only practice.

Understanding the Hybrid Practice Model

A hybrid practice model typically aims for a 50/50 or 60/40 split between insurance and cash-based services. This balance allows clinics to leverage the volume and stability of insurance-based patients while also offering cash services, which often have higher profit margins. Hybrid models can take several forms:

• Keeping Select Insurance Contracts: Clinics may retain a few key insurance contracts (e.g., TRICARE, Medicare) while offering cash-based services for other patients.
• Differentiated Roles: Junior clinicians might handle the bulk of insurance-based patients, while senior clinicians focus on more profitable cash-based services.
• Loss Leader Strategy: Clinics could use insurance-based physical therapy as a "loss leader" to introduce patients to higher-value, cash-based wellness, or training programs.

This strategic approach helps clinics diversify their revenue streams and provides more control over pricing and service offerings.

The Challenges of Transitioning to a Hybrid Model

Transitioning to a hybrid model is not without its hurdles. The biggest challenge for many clinics is learning how to effectively sell and market cash-based services. Clinicians who are accustomed to the insurance-based model may find it difficult to shift their mindset and communicate the value of their cash services.

Other challenges include:

• Navigating Out-of-Network Status: Going out-of-network with insurance providers requires careful planning and can be a complicated process.
• Changing Staff Mindset: Convincing existing staff to adapt to a new hybrid model can be difficult, as they may be resistant to change or uncomfortable with a more sales-oriented approach.

However, overcoming these challenges can lead to a more resilient and profitable practice.

The Benefits of a Hybrid Model

Despite the challenges, a hybrid model offers several key benefits:

• Consistent Cash Flow: Cash-based services provide a steady revenue stream that helps offset the delays and denials often associated with insurance reimbursement.
• Patient Transition: The volume of insurance-based patients can be leveraged to transition them into more profitable cash-based services over time.
• Scalability: Hybrid practices can maintain a larger patient base, making them more scalable than purely cash-based models.
• Flexibility and Control: By incorporating cash services, clinics gain more control over pricing and service offerings, avoiding the constraints of insurance contracts.

This flexibility and increased profitability make the hybrid model an attractive option for many physical therapy practices.

Strategies for Transitioning to a Hybrid Model

For clinics looking to make the transition, the podcast outlines several strategies to facilitate the shift:

1. Phase Out Low-Paying Insurance Contracts: Gradually drop the lowest-paying contracts while building up cash-based services to minimize revenue loss.
2. Introduce Cash Packages: Start offering cash-based packages or continuity programs to existing patients, making it easier for them to transition.
3. Develop Sales and Marketing Skills: Focus on building effective sales and marketing strategies to attract and convert cash-based clients.
4. Retain High-Value Insurance Contracts: Consider keeping a few high-volume or high-reimbursing insurance contracts while shifting the focus toward cash-based services.
5. Train Staff: Ensure the clinic owner and leadership team are comfortable with the sales process and can train staff to adapt to the new model.

The Takeaway: Embrace the Hybrid Model for Long-Term Viability

Overall, the podcast emphasizes the growing necessity for physical therapy practices to adopt a hybrid model to remain viable and profitable in today’s healthcare landscape. By incorporating cash-based services alongside select insurance offerings, clinics can achieve greater financial stability, scalability, and control over their business.

The transition requires careful planning, a willingness to embrace change, and a focus on sales and marketing skills. However, the rewards of adopting a hybrid model—consistent cash flow, scalability, and enhanced service offerings—can make it a game-changer for physical therapy practices looking to thrive in a challenging market.

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Danny: [00:00:00] Hey, real quick, if you're serious about starting or growing your cash based practice, I want to formally invite you to go to Facebook and join our PT entrepreneurs Facebook group. This is a group of over 6, 000 providers all over the country. And it's a pretty amazing place to start to get involved in the conversation.

Hope to see you there soon. Hey, are you a physical therapist looking to leverage your skillset in a way that helps you create time and financial freedom for yourself and your family? If so, you're in the right spot. My name is Danny Matta and over the last 15 years, I've done pretty much everything you can in the profession.

I've been a staff PT. I've been an active duty military officer, physical therapist. I've started my own cash practice. I've sold that cash practice. And today my company physical therapy business helped over a thousand clinicians start growing scale their own cash practices So if this sounds like something you want to do listen up because i'm here to help you

What's going on? Dr. Danny here with the pt option or podcast and today i've got Yves Gege with me who's one of my business partners And we're talking about hybrid practices. One of the things that we see on an ongoing basis, [00:01:00] especially over the last few years I would say is More and more insurance based practices that are approaching us to help them with the transition from taking insurance 100 percent to, in many cases, at least getting to 50 50.

50 50 insurance and cash, and in some scenarios, moving completely away from insurance exclusively. Now, Eve, in particular, has unique perspective on this because at one point in time, he actually you. Owned ran and then sold a in network practice now. So the same thing with a cash based practice, right? This is a trend that we're seeing something that we wanted to talk about because some of you might be listening to this and have an in network based practice and you don't really know what to do and The landscape is not getting any better for Small insurance based practices.

I just even spoke to a fairly like large national brand that has in network practices and they're struggling to make it work as well. And they're looking to flip it to a hybrid practice at a minimum because the economics of these businesses are just like, they're trending the wrong direction, [00:02:00] people, their salaries are obviously going up as cost of living is going up but insurance reimbursement is consistently going down.

So it is a really difficult place to be. So today we're going to talk about. What we've seen, the people we've helped with that transition, what the steps are, the big hurdles. And if you're thinking about doing this, what the next steps would look like, for you, if you want to take this this next step to move to a hybrid practice.

Eve, why don't you tell me this? So the difference between when you had your insurance practice and today, what are the biggest differences in just the business model in general?

Yves: Will you say the difference between like insurance based practice and a cash practice or just the transition?

Danny: No, I mean like the landscape when you had your insurance practice, How does that compare to people that are trying to run insurance practices today?

Is it getting worse? What's the difference? What are the things that have changed?

Yves: Yeah. No, we can talk about this definitely at length. We look at the landscape of physical therapy in general and it's no secret reimbursement, as you said, has gone down and down as well as the amount of red tape and the amount of [00:03:00] documentation and the amount of claims that are rejected.

And the paperwork involved for insurance based practices has also increased, right? I was in a time pre EMR when people may not, written notes and Once EMR happened and Medicare happened I swear, every single year there'd be a new hoop we'd have to jump through again and again.

And it's just making it very difficult to sustain. Like hospitals they have higher negotiated rates. So they're making money, more money per hour. You're looking at small private insurance based practices who can't negotiate high rates. They need to either increase their volume or their profit margins will just continuously drop and drop along with, what we've seen now with inflation and post COVID is basically We got to pay our people more and all of our overhead is more like everything's more extensive yet reimbursement has gone down Which I think is great for the profession because physical therapists, I think deserve to make more money and that's great but ultimately who's getting squeezed out and [00:04:00] We know it is the small insurance based practice And so they want to do more and they're not really sure how and the cool part is I feel like we can finally talk About it today because I have enough Reps basically of understanding how to add cash services, which wasn't even a, back when I had insurance, but that wasn't even a thing, and so now we really understand, Oh man, you can put these on the back end and use insurance as a loss leader. You can rip the bandaid off completely and go totally cash and transition out. There's just more options to than there ever has been before. And yeah, I'm excited to share more about it.

Danny: Yeah, and it's interesting to see that people have, they've gone about it in different ways based on what their skill set is, because some people, if they say, I don't understand the performance side of things. I'm not sure what to do with people that are trying to achieve maybe more of a golden goal.

Getting out of pain and kind of general activities. And that might be a general orthopedic clinic [00:05:00] that they're working with more of a lower sort of functioning population versus people that are maybe come from more of a strength conditioning background. They're working with or a specific niche where they're helping runners, get to the point where they're running races.

And we know that you can make it work in a number of different ways, but when you look at the transition about how people are doing it there's not one path that's right for everybody. Like we see a few. That seemed to be proven depending on their goals and depending on their skillset.

But I think the biggest thing and the most scary thing for every single person that's in this position is the fear of removing insurance, the fear of what do they do about their accounts receivable? The actual, like the challenges they're already dealing with, are they. Hopefully they get that money.

Maybe they never do. We know plenty of businesses that are, have huge accounts receivable as they go out of business. And that's sad, but it's true because they'll, your cashflow gets, screwed up so bad that you just don't, you can't make payroll and can't make your head and game over, so what do you see as the biggest hurdles for people? [00:06:00] To make that transition to go from, okay, I'm thinking about this to like, what's the first thing and the hardest thing, in many cases for people to really do to get to the point where they can at least start to make a percentage of their business cash.

Yves: I've seen what you said, I've seen two routes. One is the person who wants to fully transition, which I think is a little bit of a different story. We're going to talk about how most people probably want to keep some insurances, right? And the biggest drawbacks I think for a lot of times is people don't even know how to get out of network or and that process, which I found which is very interesting, Sometimes could take months to get out of, right?

And then understanding how to even do that. I would say that's one big hurdle. But I really feel like the main one is, and it's really what big part of what we teach at PT Biz, is how do I actually get people to buy this thing. How do I sell physical therapy? Something that I really have never had to sell my entire life, right?

People just came in for a copay sometimes they'd have a [00:07:00] deductible, but that wasn't really a conversation. It was just like, okay, here's what you got to do. Now you've got to change the way, and this is the hardest thing for but if they get this right, They crush it. It's how do I talk to people on the phone initially and how do I talk to them at the eval to get them to purchase, a package or some sort of continuity program after that.

If they get that right, everything else is easier. But that I think is the hardest transition, especially when doing it a certain way for a long period of time.

Danny: Yeah, learning how to sell, I think in general is just such a difficult transition for clinicians which is funny because it's not hard to teach clinician how to sell because they already, they're already great question askers, active listeners, they are helping people understand what's going on in a really thorough, logical way.

So 80 percent of the sales process is already built into their skill set, whether they know that or they don't know it. The other 20 percent is what scares them when they have to talk to people about money. That's what, that is what will stop people [00:08:00] from ever making that transition. Like literally the fear of that.

I brought this quote up at a mastermind whenever when I presented and, I don't know where this quote come from, but I saw it on free was it free guy? Not free guy. Ball guy. Sorry. Ball guy. It's close enough. Yeah. Ryan Reynolds and Ryan Gosling. Ryan Gosling is in the one that I'm referencing and.

He says something that I think is so accurate, basically just across the board. And it's everything you want is on the other side of fear, right? So anything you want is on the other side of your in life in general, right? I think about all the things that you've, that are scared of, that maybe you were able to overcome that created like really impressive, important moments of your life, or it was really important changes or really impactful as you're just a person to see what you're capable of.

When we take people then, and we teach them how to sell, I see that happen to people all the time. And there's a lot of fear there associated with it because, Money is one of those things that can make people feel very uncomfortable talking about, especially as a clinician. You're there to serve people, you're there to help them get out of pain.

And it can feel incongruent to try to [00:09:00] charge somebody for the thing that you would probably do for free if you didn't have to pay for your, mortgage and food and all the things that life requires. So you can feel bad about, charging money for something that you just feel so passionate about helping somebody with anyway, is this a, it's a service based business, right?

But it's not a nonprofit. Like we have to be able to, fund our lifestyles and build business to build, hire other people too. So that last 20 percent is the part that will stop most folks. And it's the fear of selling the fear of rejection, the fear of talking about money and maybe their own relationship with money, which can be such a fascinating thing to get into in its own right.

But that is for what I see with these clinicians, once they get over the hurdle of that, all of a sudden they do so well because of the entry points can be different. And like you're saying it can be initially, maybe they take insurance. And then they have back end continuity programs that are cash services that allow them to work with people in an ongoing, more wellness based approach.

Sometimes I've seen where people have junior clinicians are taking insurance, [00:10:00] senior clinicians are taking cash, which allows them to maybe focus a little bit more of their skill set or give people an essential opportunity to get to that. We've seen people that literally only just take us a couple of insurances.

So like we have companies that we work with that have a lot of pro athletes to come through, especially in the off season. They take work comp because that is what you get reimbursed from with the teams are doing a bunch of work with them. We see people that are maybe in military areas that want to work with military families.

They take Tricare and that's it. We see people that are in higher geriatric populations. They take Medicare and that's it. So a portion of their population is insurance-based. They can get volume from that, but they get the average visit rate that they need through applying cash with that to average it out and put 'em in a much better spot, right?

So there's a lot of ways to do it, but either way, you gotta learn how to sell. You gotta get comfortable with selling. Both on the phone, people are first coming in as well as a plan of care and potentially a continuity package of some sort. But again, that's 20 percent of the skill set that you need.

You already have the other 80%. You just got to get past the fear of what if somebody [00:11:00] says no, or do you feel weird talking about, a couple thousand dollars for a plan of care?

Yves: Yeah, I've had now. I don't know, hundreds just like you have conversations with people who are scared to sell.

And every conversation pretty much goes exactly the same way. I say, what do you say at the eval? How do you get them to essentially buy into your plan of care? What do you tell them to make sure that you can lay out a plan for them? And I get them to say that. And then I say, cool, you're already selling, maybe change one or two words and then hand them this pricing sheet And there you go, so like it's like this authentic clinical selling that I'm obsessed with where it's just can I align what I'm already saying clinically and turn into a sales process?

And for almost 100 percent of people, that's basically all I'm doing. I'm basically just like bringing those two ideas and merging them together. And almost always it's an aha moment for them. They're like, Oh man, I've already been selling. [00:12:00] Oh, man, this is way easier than I thought. Great, and this is now talking about the package sales process, which I think in a lot of ways is easier for clinicians than the initial phone call.

I'm sure it depends, of course, but like a lot of times, just like you said, you're already active listening. You're already laying out a plan. And now you're just changing the way you're doing it a little bit for a lot of you. Clinicians out there for most of you, you're saying way too much clinical jargon.

So I'm usually just dumbing it down significantly, but you're essentially saying the same thing. And then, yeah, just laying out here's what I think is the best plan for you. Ending it with that. And lo and behold, you're now selling at a 70 percent clip for most people. And just as you said, they've already got the skill set.

It's really just getting over. The money mindset or the fear, as you said. Yeah.

Danny: And I found the owners, the clinical owners, they tend to make the transition much easier than their staff does. Because when you hired your staff, this could be your front desk. This could be your actual, [00:13:00] clinicians.

They came into a certain business model that is what, that's what they were expecting. And now you're changing it on them. And. So many people are resistant to change and maybe they don't have the right personality or the desire to even shift the model to where it needs to go.

But I really don't know what options people have these days, right? Cause we were chatting about this earlier. It's no offense to anybody that's starting a practice right now with insurance, but like, Why would you go a hundred percent insurance? I just don't understand unless you have a big established brand where you're building, um, you're building a market share and you're trying to capitalize on that.

And you're making up for it with this massive valuation you could potentially get because of size. If you are just starting one clinic right now Why in the world would you take insurance contracts because you're gonna you're gonna have the least leverage you're they're gonna pay you the last like you're gonna have the lowest.

Average visit rate you're gonna stack so much volume on yourself [00:14:00] in order to even grow to the point where you have enough Revenue to be able to hire somebody else you're gonna be so time poor like I don't understand how anybody can start in a single in network practice right now and feel comfortable that, they're going to be able to make the numbers work.

Cause I just don't really see how that works until you get to a few providers. And even at that point, they have to be very high volume for it to make sense.

Yves: Yeah, I made the analogy that it'd be like starting a blockbuster or a circuit set, because we can see.

Danny: Or not, sorry, Kmart. Kmart,

Yves: yeah, whatever, right? Like I'm going to start selling VHS tapes again, there might be people that still buy it, but that's a zero sum game and we know. And when I went cash, It wasn't like there was a bunch of education out there, people talking about it, or a proven model in my area.

I literally went cash because I was going to be in a room in a CrossFit gym and I ran the numbers because I'd run a seven figure insurance based product. I was like, I physically cannot make [00:15:00] enough money in this space. So actually this is the only viable option for me, which, ended up obviously being something that worked out really well.

But yeah, the numbers don't work and it's not like it's going to change. You know what I mean? Like it's only, Unfortunately going to get difficult and it's only going to get more difficult and it's only going to get more expensive. And so you're right. There are definitely people out there who want to grow and get acquired and that will still be an amazing business.

Or if you want 20, 30 clinics, you can take less profit and basically change it for volume. But again, now we've got I think a really cool model, which I've never been excited about. Like I'm an old cash guy, but I've never been more excited about it. I'd be like, this would be fun to start from the beginning because the huge benefit to a hybrid practice, by the way, is that you can do.

I'll be really bad at marketing to be perfectly honest and still do really well because people are going to come see you. The cool part is you're going to probably get pretty decent volume of people coming to you. It's [00:16:00] basically a loss leader on the front end and then you can capture people on the back end.

So that's a big pain point for a lot of cash matters is I can't get enough evals but now Usually our hybrid practices are getting plenty of evals, right? They're having a little bit of hard time converting back, but you'll take that all day. Cause you've gone, now got plenty of people got a huge pool of people who are willing to come in and give you a lot of opportunities to, to honestly get it wrong.

And if you commit to it and get enough reps, a lot of people end up getting it right. And it just, the balance that can create in somebody who's been an insurance based practice their entire life and ran that and sees it dwindling to now being, like you said, a 50 50 split or a 6 40 split they're okay.

AR, which happens, you don't get reimbursed for 30 days from a huge insurance, you typically do. Your cash flow can carry that. And, you're just in a completely different space. That seems to be the main benefit with the hybrid groups is when I talk to them, just I just feel so much better because I have consistent cash flow coming in.

I'm not waiting 30, 60, 90 days for AR. And a huge [00:17:00] percentage of the AR actually never even gets paid back. You know what I mean? So there's so many free visits that are happening. It's just only on top of that get denied or it wasn't filed correctly. So it's just a huge benefit for so many reasons.

And I don't think a ton of work, you know what I mean? Like ultimately it's, you've already got the pool of people. You just got to develop this one skillset.

Danny: Yeah, they're, they have strengths and weaknesses, like the, I think of the two options, the straight, like just cash only and hybrid, I think a lot of it, it depends on your area, a certain area to think you better than others, right?

If you're in more of a rural area less population, maybe not as much a disposable income than a hybrid clinic can make a lot of sense. If you have a really strong backend. Cash service. So for instance, let's say you have physical therapy on the front end and you have some sort of maybe like gym or training facility.

That's that is combined with that, where physical therapy in some way, maybe is not as important [00:18:00] to have as high a probability as you can, because you want to get exposure to these other services that you offer, then that could make sense, right? It just depends on what you. What you're doing and also what problems you want to deal with because if you're just like dude I've already dealt with insurance.

I don't want to deal with any insurance, right? Then totally get it, right? the simplicity of the cash model makes a ton of sense because You literally, you save yourself a ton of time. You don't have to have these discussions You don't have to have these negotiations. You don't have to worry about accounts receivable It's literally, you could pay the time of service But you may have to deal with some of these challenges if you want to be able to scale in certain areas.

Or you just decide that you want to keep profit margins higher and be smaller overall business. There's no really right or wrong way for people. Me personally, like I just, I probably would, I don't know, I wouldn't say never. It would be very hard for me to take insurance in any capacity.

Because of just like the actual administrative burden of that not just on myself, but on my staff, [00:19:00] because there's other things you have to account for, especially if you're going to take any sort of like government insurance like Medicare or Tricare. And so there's additional things that I think lead to that.

But is one more scalable than the other? I think probably a hybrid practice is more scalable than a cash practices as far as like total size, you could grow speed potential you could grow at, but generally probably has slightly lower profit margins as well. So it just depends on your goal. That's the key.

You got to figure out what you're trying to do. Hey, sorry to interrupt the podcast, but I have a huge favor to ask of you. If you are a longtime listener or a new listener and you're finding value in this podcast, please head over to iTunes wherever you listen to the podcast, and please leave a rating and review.

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Yves: Yeah, we've been now in business for a long time, in multiple areas, not just PT.

And there's two things [00:20:00] that I think make cash the number one. One is the control factor, right? So like you were literally, which would be almost impossible for me to do at this point and be like, Oh, okay. You're just going to get to choose what to reimburse. Like you can send me a lot of people, but ultimately.

That's going to be really difficult for me and what you just said too would be the administrative burden and just the simplicity of what we're doing right now, so being able to control price and keeping things simple. I think that's going to just be the kind of business that I want to run as opposed to yeah having to deal with Insurance and taking that out of my hands because that is again.

That is honestly the biggest challenge Is because what I was going to say is typically the owner needs to go and sell it first because they need to understand it At deep level so that can be a very difficult transition especially maybe if they're they've been backed out of the business before i'm like guess what you're going to have to dive back in because It's going to be very difficult for you to teach your pts how to sell if you can't do it yourself it's That is, I think, a little bit of an [00:21:00] issue in those practices as well.

Because. They don't necessarily want to get sucked in, but 100 percent they're going to, they're going to have to, you know what I mean? Because there's so many nuances to it. They, and we've tried it the other way and it just doesn't ultimately, do you know what I mean? Being able to train.

Danny: Yeah. What do you see the best? Obviously this is like regional, but are there any insurance providers that you've found that seem to be the most That people are taking the most that are going the hybrid route. Is there any specific ones or is it just depend where they're at regionally?

Yves: Oh, it does depend regionally. I've heard if you're in the Northwest, you actually get paid a pretty decent amount. And then we also have, which I don't want to make this conversation more complicated. We have added network practices that seem to be very common in the Northeast, where they get reimbursed a decent amount.

I do think, believe it or not, Medicare does very consistent. Yeah. People usually like working with that demographic. You get paid pretty quickly, there's red tape, but it's not that. That, and I think Blue Cross tends to be another one, which a lot of people have [00:22:00] and reimburses it good enough.

But there are some that are just awful. I can more tell you about that. Like UnitedHealthcare tends to be one of the worst ones that can reimburse it. Reimbursed as low as 30 to 40. And it's really bad, but definitely those more common Medicare. Tricare as you had mentioned, and then Blue Cross Blue Shield, because you just get a lot of volume for those and you get decent bang for your buck.

Danny: Yeah. And the thing with Medicare too, which is interesting is like when I was an intern at a, in a high volume clinic like Medicare, you can't, At the time, I don't know if this is the same now, but like you can't work with Multiple people at once you can only work with one medicare patient that's it.

Like you have multiple medicare patients same time, right? So you had to over it couldn't overlap those but in a one on one setting like you're not working with any other people, right? So it's like it's it's very easy to do something like that And if you're you are actually spending a full hour with somebody You can typically build decent amount of units to, to make it make weird time.

I always felt somewhat bad about not being able to work with more Medicare population [00:23:00] too because there's a population that I felt our approach could have really helped more. And it just, but it just really wasn't worth the logistical side of things for us to add it and and make it a part of the business.

And we weren't really in a really high geriatric volume area anyway. But if I, let's say I was in Florida or something where there's like a higher Medicare age, a percentage of population, then, yeah, it could make a lot of sense if that's a population that you want to, that you really want to work with.

And also there, these are people that you can work with in the Medicare side and then move them over to, ongoing, training services or, whatever other things you might offer that are cash based that can make a natural transition, natural fit with that population. I think there are a few you're right.

Regionally from what I've seen the same thing, wherever you're at, there can be differences. I think the benefit with something like a blue cross is post op volume. So stabilizes schedules really well. It may not be. What everybody wants to see. Unless maybe you have an ACL, specific niche or something that you're wanting to work with.

And those are obviously easier if you're taking insurance, cause it's a lot of [00:24:00] volume, but you just gotta make sure the numbers work out and that it works out with what the vision of the clinic is, right? But these hybrid variations are definitely they're a viable option for sure.

And I just think every clinic is going to have to go to a hybrid option. If you're not if, and they really are, if you look at it, deductibles and how high they are. A lot of people are paying out of pocket for a lot. They're going to have thousands of dollars until their deductibles hit, you're in a hybrid practice, whether you like it or not, you got to have a, you have to have a cash conversation about where the self pay rate is and that's happening in every clinic I've ever talked to.

Yves: Yes. And that was another point was so probably everybody. May consider them hybrid at this point, right? Like I've talked to a lot of practice owners like, oh, yeah, I take cash, and what they do basically is they charge 100 or less per visit for some of these people that want to pay self pay. And I was like that, okay, technically, yes, you're taking cash for services, your cash pay, but that is not, a business model.

That is not. A way to work with those clients, you need to find a way to actually do this and probably charge more. [00:25:00] So what you're worth, right? Which we know is at this point over 200 dollars an hour. Pretty much minimum there's a lot just to be cleaned up there. So I think you're right.

I think everybody is a form of cash, but they're utilizing it. Are they actually using it to improve? Their profit margins are they actually utilizing it to keep people around long term, like probably not, that's why I think it's such a big opportunity for a lot of people because it's a couple small tweaks.

And all of a sudden now you've got a cash program on the front end, got a cash program on the back end. And then to your point, you've got probably fitness and wellness services on the back end of that as well. Funneling people from Medicare into a small group training class, like we know works really well.

So there's just so many options out there now that I think people know exist, but they don't know sometimes.

Danny: Yeah. What have you found as far as say somebody is looking to make this Transition. Do you drop everything at once? You just rip the band aid off as far as the insurance [00:26:00] contracts you take or do you look at, all right, let's whittle these down kind of one at a time and slower transition.

What have you found that seems to work the best?

Yves: So definitely pros and cons to each. The only time you really would rip the band aid off. is if you've probably got some sort of adjunct service already in place, right? Like you've already got a training side to your business that can weather the storm, so to speak, just in case.

That's the only way I'd recommend that. So for most people, it is adding cash services to the back end. Cause a lot of insurance now, like it ends after 20 visits or it doesn't even matter. You know what I mean? There's this inherent point where you can transition the no matter what. So you're doing that.

Probably first and foremost, establishing some sort of cash model. So converting some of the people, maybe you're already getting, maybe it's a lot, but converting those people into a cash paid eval and a cash paid package. And then cash in the back end. And then you slowly drop the lowest [00:27:00] paying insurance.

So we'll pick the lowest paying one. You'll go out of network with that one and then slowly start chipping away at it. And then at some point, some people get really excited and they go all the way. Most people do what we talked about. They probably keep their two to three highest payers and or people who have the highest amount of volume coming in.

And they optimize the back end. And that seems to be. The version of that I think goes really well for most people. So that kind of cookie cutter, best version, that will be it.

Danny: So if somebody's looking at this and they say, okay, what are these down, but I don't have, you keep saying continuity back end.

I don't know what the hell we're talking about. So what are some examples of what people are doing that are cash services within these clinics that are these cash based or recurring based services that, that allow them to move people over to those instead of just straight insurance.

Yves: 100%.

This is an analogy I made the other day with somebody we work with. In a cash model, somebody comes in, they buy a package, they come, [00:28:00] they get seen for 10 to 12 visits. Through that goal is typically to get them out of pain and back to their ADLs, back to functioning. And then we sell continuity, which is typically focused on performance injury prevention, maintenance care kind of thing.

And if we look at an insurance model, it's basically the same thing. They come in. Warning about they get a plan of care. Typically, it's a little more higher volume. It's 2 to 3 times a week for 8 to 12 weeks. The goal being getting out of pain and getting them back to normal. ADLs or back to their sport, whatever.

Once you're done with that, then they enter this kind of continuity phase where it could be more about wellness. It could be a lot of times about some sort of performance goal, right? So i'm a runner, I want to be able to run this 5k or I want to be able to hit a PR next time or it could be something that's a little more about maintenance.

I want to stay healthy, I want to be around for my grandkids and all of a sudden you can do that too. So the cool part about that is insurance technically doesn't pay for that, right? So there's this inherent kind of [00:29:00] stopping point and there's this easy inherent kind of transition to these other programs.

And so I, I try to put that all together for them in that kind of way.

Danny: Yeah. This gives people a good place To start, if you're thinking about doing this, obviously, I don't envy anybody that's in this place. I'm all, over the last few years, I've really come to realize, I think the people that are in the toughest spot are people that have smaller in network practices.

One, two clinics, small. Footprint a couple staff members and are just getting each year. It's like death by a thousand paper cuts It's just like more paperwork less reimbursement, and then you're the Overhead burden goes up, right? So it's just a tough place to be I think it's the reason why you're seeing so many of these folks just shut their clinics down It doesn't make any sense for them.

It just feels so hard. It feels like such an uphill battle So if you're listening to this and that's you know I think this is a really hopefully helpful conversation for you to hear And a good place to start with what the next steps look like for that, because, to take a business and let's just we look at the numbers of it.

Let's say to make it easy. You're [00:30:00] making 100 an hour on average is like your average hourly kind of reimbursement, and you can change the model to where you can have. Other services that are offered that are non insurance based. And that can change it to go from even a hundred to one 50.

All of a sudden, you have 50 percent more revenue per visit times, however many hours it is that you have that are being there being treated or addressed. And that, that can be the difference between a business that works and does not. That is actually like able to provide an income for you and your staff and and a healthy business to run versus one that is literally going to go bankrupt, and that's the reality of a lot of this stuff.

And it's really harsh to say it that way. And I think for a lot of people, That options are either shut my clinic down, try to sell somebody to absorb my clinic, maybe a bigger group that you're probably gonna get almost nothing for your clinic that was probably worth basically nothing, or you try to change the model slightly and make it to where it's more efficient model.

Yves: Yeah, you're right. That's why a lot of people [00:31:00] are selling and or shutting down. That's a good point. Let's say you're an owner, you've got. Four, five, six PTs. You're frustrated, not sure what to do next. I think the easy action item, just put it all and wrap it up in a bow, is take some of your patients you're already seeing, because you've definitely got these patients, almost everybody does if they've been in the profession long enough.

They've been working with them for a long time or come back more often. You A, you need to price your stuff correctly. So I would say 175 is the absolute minimum, but 200 or higher is where we want it to be. Try to sell them on some sort of wellness package. It could be a monthly, it could be twice a month.

Sell them some in the back end of the insurance. You figure out how to do that. Build up your cash services and then all of a sudden you're like, Oh man, this is possible. Like I can do this. And all of a sudden I think your eyes will start to open up and be like, how can I get my PTs to sell this?

How can I sell this on the front end a little bit more? What does it look like to drop the next insurance? And just watch your average visit rise because, I've done this math too, and we have tried in a practice before and it went pretty darn [00:32:00] well. If you go from averaging 100 a visit, let's just say to averaging 175 or 200, literally 40 percent of your patients could stop seeing you, and you would still make the same amount of money.

Because You don't need billing, you need way less paperwork, like there's the advantage of that. So the numbers work out really well. But it does come back to, which is a great thing to circle back to, it's it's on the other side of fear. And that fear is massive. Like I get that fear. The fear of going out of business is something that all of us as business owners, entrepreneurs deal with every day.

And that's a tough one to get through. We Typically recommend that model that I just talked about, which is, dip your toe in the water, see how it goes, learn the skill and slowly disseminate it, down the, down the chain.

Danny: It's so true, man. We can leave it on this.

Everything you want is on the other side of fear. Just go watch go watch Fall Guy. It's actually a really funny movie. Did you watch it?

Yves: I have not. It's on my list. I can watch it with my kids.

Danny: Yeah, we watch it with our kids. It's I think it's PG 13, but my kids are 11 and [00:33:00] 12. So close enough.

Yves: I agree.

They're already, we've watched like one or two of our movies at this point. And now they're like, what are the next one we can do? I was like, let's just stick to PG 13. Like I'm good with that. And I gotta,

Danny: I gotta watch Gladiator with Jack before the second one comes out so I can take him to go see it.

I'm not too worried about like the, that's not the stuff that I'm too worried about. It's like the super scary, sketchy stuff that'll give him nightmares kind of thing. It's I don't know, Roman Coliseum. It's not I'm not too concerned with that, but no, it was a good movie. But I remember, when I saw that part of that scene, I just Pause it.

I was rewinding it. It was like that's great. I'm sure someone has said that before Ryan Gosling, but I think of the moments in my life where, I've had like really impactful things happen and things that have changed. And if you're listening to this, Eve's right. There's a lot of fear with making any change in any business, especially the longer you've been in business, the more fear there is around changing anything, because you may have to learn something new.

You may have to reinvent how you're doing things. You may have to come to [00:34:00] terms with the fact that There's a lot of work that needs to be put in and maybe it's not worth it You know, maybe it is maybe a different path is worth it But if it's worth it to you, there's fear around making those changes.

There's fear around talking to your staff about these things There's fear around what happens if I drop a contract and all the people that are that's their insurance They're pissed about it or whatever, right? And and not to say that you're not going to have some negative interactions. I'm sure that you will I just don't know of any I don't know of anything that anybody does in any business where there's no negative interaction at all ever like it happens and you have to ask yourself If the opinions of other people mean more to you than the opinion that you have of yourself and what you're, what you know that you need to do, like it's, that's the key.

Is it, do you care more about what other people have to say than what you know and what you come to the decision that you need to do? Cause if so, then this is gonna be hard for you. But if you can be, calm enough to understand that's going to happen, that's going to be part of it and get past that, like you can put yourself in a completely different place With your business or [00:35:00] the spillover effect from that is just okay, cool.

You've conquered this one thing. What else does that help you with? What difficult conversation in life does that help you with? What difficult conversation with a family member or spouse or a business partner or your kids or whatever? It's like the fear of something negative happening. All of a sudden you now have this courage, this, the skillset you've built up and something else that then transitions itself over into other places.

And that's really powerful. In general, not to get too philosophical about this, but I think that like when we look at businesses, one of the greatest things that we have an opportunity to do is challenge ourself in a way that a lot of other people don't, they don't get that opportunity outside of.

Things like sports and the military. So many other places I've seen where there's literally I thought I was going to throw up in certain situations. And I felt like that in business too. And that arena that you can play in and develop that callous of being able to be tough enough to do these things and push past stuff.

It's not like we don't get scared of things. I obviously do. Everyone does. It's just that we've realized now enough [00:36:00] that that's almost like it for me. It's like an azimuth. It's like a compass. If I know, oh man, I'm scared to think about this or what about this. It's almost like a directional thing for me to know, shit, I got to do it.

Every time I've done this in the past and I'm going the direction it's worked out better for me, in some way longterm. So that's something to think about. If you're scared, that's normal. It's just a matter of whether this is necessary or not based on what you're trying to do going forward.

Yves: Yeah, I were always hard on clinicians saying, Oh, man they necessarily want to be business owners and they have a tough time learning these things. But a superpower of clinicians is that they're really passionate about what they do. And if you're passionate enough about what you want to do, you'll be willing to go through some of these trials and tribulations to get on the other side, because ultimately, the goal is to help as many people as possible.

And to do that, You've got to stay in business to hire really good PTs. You've got to have enough margin to be able to pay them really well. You've got to have a bigger space. You can help more people. All these things, are necessary. And I put it through the lens you just said, but also this lens as well.

It's like my goals impact as many people as possible. How do I do that? [00:37:00] I need to have enough profit, I need to be big enough so I continue to grow and help more people. I just want people to continue to push themselves and hopefully this is another avenue for somebody we haven't talked about a lot.

In order to do that,

Danny: I think that's where to ended it. That was great Eve. Thanks for all the insight on hybrid clinics. If you're listening to this and you have a hybrid practice and it makes sense, head to PT biz. PhysicalTherapyBiz. com and pick a time to jump on a call with one of our advisors.

They'll take a deep dive into your business, take you through an assessment where we benchmark you against all the clinics that we've worked with, which is pretty cool. So we're talking hundreds of clinics and we have really clear benchmarks of where your business needs to be. And if it's not there, where you need to work towards in order to put your business in a really healthy position.

If you wanna have a conversation about the ins and outs of what this looks like for a hybrid transition we obviously help people with that all the time. Highly recommend jump on a call with one of our advisors. It'll be valuable, worth your hour. You'll get a lot of insight on your business and to make sense that maybe we can help you with what you're trying to do, then they can tell you about what that might look like if there's a fit.

Anyway, thanks for your time and I really appreciate it. And as always [00:38:00] guys. Catch you next time

Yves: Hey

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