Should you add cash pay or subscription services to your physical therapy practice? Is doing that even ethical as a physical therapist?
Our CEO Neil Trickett interviewed James Pumarada, PT and Founder of Complete Physical Rehabilitation in New Jersey, to find out how James created 3 levels of cash-pay services in his practice.
How to Create Additional Sources of Revenue in Your PT Practice
Neil: One thing you do really well is your cash-based services.
When we’re faced with upcoming challenges with reimbursement cuts and changes–and let’s face it, it’s been going on for decades, someone’s always trying to cut funds–you are looking at: “How can I create additional sources of revenue in my practice?” That sets you apart from a lot of other practices.
Why did you decide to offer cash pay physical therapy services in the first place?
James: Neil, it’s definitely an interesting challenge providing cash pay services. There is a certain level of commitment and onboarding to get a person to commit to a private pay physical therapy service.
Even if you’re in physical pain, you still need to be able to walk, or unbutton your shirt, or eat a meal. But when people are in dire need [and they can’t do these things], there is a sense of urgency. That’s where we saw a niche: we can harness that urgency and convert it into a cash-based model.
So what I ended up doing was saying: Okay, I’ll use this urgency and create two different membership levels: a concierge level and a regular cash-based level. I’m only in my one facility one day out of the week, so if you want my time, you have to be willing to pay a certain amount.
But here’s the thing: it’s easy to charge someone cash. But you’re doing cash pay or private pay, you need to provide more value than if your patient went to an in-network provider using their insurance benefit.
The secret sauce is: you need to provide value for that price point. People seek value. They want to see the value in what you are doing.
3 Levels of Cash Pay Services in My Physical Therapy Practice
Level 1: Insurance-Based Individuals Pay Cash for Specific Services
James: What we ended up doing was: for the insurance-based individuals, we use a cash-based model of using the Light Force Laser. We say “If you want to get better faster, with no side effects or medications involved, then you should definitely give the Light Force Laser a try. It will get you better, faster from physical pain, it’s a deep tissue laser, etc.”
Check Out the Cash Pay Physical Therapy Services Available in James’ Clinic!
- Light Force Laser Therapy
- Squid Compression Therapy
- AlterG Anti-Gravity Treadmill
- Acupuncture
- Complete Yoga Program
Level 2: Annual Membership at a Low Price Point
James: Then you layer in another piece to it, which I came up with this year: onboarding our current and past patients onto an annual membership at a low price-point. All businesses–Amazon, Disney Plus, anything you use in your daily life–everyone has some type of monthly membership for their services at a more affordable cost.
For us, we have an annual membership that allows patients to get a 20% discount on private pay services.
You may think: “James, the math doesn’t add up! If you discount 20% off of everything, you may be taking a 10% hit in profits!”
Well yes and no. The reality is, as you harness more and more subscription members who are getting value for the service, it creates a warmlist and it allows you to market less to that individual, because they already know they are an annual member.
→ Check out Complete Physical Therapy Rehabilitation’s Annual Membership Program.
Level 3: Private Concierge Physical Therapy Services
James: For our concierge-level individuals, we said: for that price point, it allows you the ability to use Lightforce Laser, if needed, on every session, for one part of the body. So that alone makes our patients say “Well that’s great value!”
For Cash Pay Services, You Have to Add Incredible Value
James: It’s exactly what I was saying before. You have to reward the individuals who have been with you since the beginning.
How do you make that warmlist warmer? You elevate them [to an annual membership]. We elevate our warmlist with the newsletters and postcards you’ve helped us with to get the message out: you want to be an annual member. There may be a time where your insurance may not cover a certain amount.
So if you’re an annual member, not only will you get 20% off the cash pay physical therapy services we provide here–which includes the Lightforce Laser and also the ICS Impulse Goggles we have here for vestibular care– but if there are any products that we order for you in the future, you’ll get a 3-5% discount on those as well.
You have to layer in value after value after value.
If you do it right, you can get $5,000-10,000 of cash revenue from annual membership fees, whether or not people come in to use your services.
That allows you another touchpoint to market to people. Say “Hey, you haven’t used your benefits. Come on in!”
These are things that we’ve thought of during the pandemic that we’ve been rolling out slowly, little by little.
Neil: I love it. You’re thinking so outside the box. It’s genius! I’ve always said that practices need to have a subscription model attached to their core services.
James: Absolutely.
Why Cash Pay or Subscription-Based Therapy Services Aren’t “Evil”
Never Say This to Physical Therapy Patients…
Neil: I’ve seen it so many times and it makes me cringe. You’re in a practice and you hear this:
- Patient: I had a wonderful experience! I feel so much better now. I’ve got my life back. It’s fantastic!
- Therapist: Great. Hope to never see you again!
What?! We’ve got to change the mindset of our therapists. PTs are the mechanics of the body. If something’s not going right, you need to come back in here, just like you’d go to the dentist. You need regular checkups to keep you healthy.
Change to that philosophy and mindset.
There are so many opportunities to create a subscription model based on extended care for your patients. You’ve mixed it in with value-add services from the laser and classes, plus a discount. Kudos to you for working on this service.
There are very few practices that approach their business this way. But let’s face it: in business and practice, we are going to have to go more in the direction of private pay subscriptions and memberships.
With high deductibles, consumers are more used to paying out-of-pocket than ever before. Like you said, everyone’s on a subscription now. They can get used to private pay physical therapy services, too.
…Instead, Say This….
James: When we graduated physical therapy school, we looked at PT as taking a patient from A to B to C. We thought of an annual subscription model, where people are returning to us, as something that was evil! We thought we shouldn’t be doing that as physical therapists.
But why wouldn’t you give a patient everything that’s in your head?
Why wouldn’t you give someone a full treatment experience over the course of their life?
That doesn’t mean that patients constantly need manipulations. We’re not saying that by any stretch of the imagination. All we’re saying is: patients may need our advice. Everyone needs a coach.
For example, we’ve been working with Practice Promotions for over, what, 2 years now? We’ve realized that we need to delegate some things to you, because we can’t perform and produce at the level that your team can! Those products allow us to stay in business.
We’re thankful to say that these are the steps that have helped us to thrive. It’s by using our patient list and harnessing it over a period of time.
There’s Probably a Product Hidden in Your Current Services
James: Consistency and writing things down are the two things I’d recommend for business owners looking to start cash pay physical therapy services. There’s probably a product that’s hidden inside of your practices–you just have to figure it out, write it down, and then figure out a way to layer in the experience and market it.
Also, don’t be afraid to say “No” to free.
We do consults because we feel like it’s a life mission for us to promote the field of physical therapy. We’re in a socioeconomically low area here in Elizabeth, New Jersey. Our goal is to provide physical therapy services to the Hispanic community here. We’ve been doing it since ‘03, ‘04. It’s our thing.
But I ask myself all the time: how can I get Medicaid patients to pay me cash? I mean Medicaid–you’re talking about people who should have no income, yet they’re willing to pay me cash. I’m still trying to figure out how I’m able to do that.
It’s about the product, the experience–it’s everything. You have to be consistent with your messaging.
Neil: You’re right. People will invest in what they see as having the most value to them.
Listen to Neil and James’s full conversation on the PT Marketing Power Hour! Found wherever podcasts are found.
