Shorr Solutions: The Podcast Ep. 43 - Adding Cash Services to an Insurance-Based Practice - Shorr Solutions

With more and more practices wanting to move away from insurance-based medicine and embracing elective cash services and procedures, there’s an increased need for the most important question: HOW DO I DO IT?

In this episode of Shorr Solutions: The Podcast, “Adding Cash Services to an Insurance Based Practice”, host Jay Shorr describes step by step how to make the grand switch within your practice, including your staff, equipment, office, and business plan, while sending the correct message to your new and existing patients about your new offerings. Tune in now to learn more!

00:00:07:20 – 00:00:54:05

Mara Shorr

Welcome to Shorr Solutions: The Podcast. I’m one of the hosts, Mara Shorr. I’m a partner in the medical practice management company. Yes, Shorr Solutions. Who’s the other host, you may ask? Easy answer. That would be my father, our founding partner, Jay Shorr. Together, we now have an amazing team and clients across the country. Listen as we chat, conversed, strategize and commiserate over life in the aesthetic medical industry.

It’s time for you to listen, learn, and be inspired as we help you kick start your practice. Because who doesn’t want a little more help? Welcome to Shorr Solutions: The Podcast.

00:00:54:07 – 00:02:19:21

Jay Shorr

Greetings, ladies and gentlemen. My name is Jay Shorr and I am the founding partner of Shorr Solutions. It is such a different year, one that I have never seen before and I hoped, never, ever see again. But I promise we will. And I mean, we will get back to normal. Today is going to be on adding cash services to an insurance based practice.

So I’d like to start off by explaining that medicine is a science, no matter what form of medicine we’re in, there is a science. It’s a way to heal the sick and the injured. It’s a way to keep our patients looking young and beautiful in our industry. Cosmetic Surgery. The American Academy of Cosmetic Surgery that is elective. We don’t have to do it.

So it’s a way to keep our patients looking young and beautiful. And it is still one of the most respected professions today. And people say to me, Jay, why do you say that? And I say, well, look at the amount of accolades that physicians get and plastic surgeons get and cosmetic surgeons get because all of the education they have to go through and you may have heard me say this before, traditional four years of undergraduate work, four years of medical school, an internship, a residency, possibly a fellowship.

00:02:19:21 – 00:03:57:05

Jay Shorr

And you spend all these years in school and then you either want to open up your own practice, go work for somebody, or teach or work at a hospital, institutional based. So but never lose sight of the fact that medicine is a business. And that’s why we’re here. Years and years ago, I remember when I first got into this, it was not so common that doctors advertised and then all of a sudden somebody felt that if they market themselves somewhere, that it’s not an embarrassment because that’s a way to reach our people.

So with the changes in insurance and the government funded medical programs, reimbursements have drastically declined and makes it harder for medical providers to increase their income while still providing a ton of quality care. And what does that mean? When I first got into this business, many, many years ago and I mean many years ago, all right, it’s over 40 plus years that I’ve been doing this.

If you hang a shingle and you were in the book, you remember the book, the book that had all the different specialists from your insurance company, and you could pick who you wanted to go to. And they had HMOs and POSs and they had all these different types. Now, all of a sudden, for the same procedure year after year, if you didn’t negotiate your rates, your reimbursement for the same procedures went down.

00:03:57:07 – 00:05:38:03

Jay Shorr

Remember the days of ICD, ICD8, ICD9, ICD10, soon to be the ICD11, and then you have CPT the procedure codes. Well, for those same procedures, the reimbursement went down. Medicare, the Aetna’s, the sickness, the United health. We can go the blues, all of the different insurance companies, their reimbursement went down.

Many of them were based on Medicare allowables. But still, if they were negotiating on 70, 80, 90% of Medicare, then as Medicare dropped, so did yours. So now we’re talking about including aesthetic and cosmetic component to your program because of your traditionally insurance based or if you still have insurance, how do you increase the amount of fee for service revenue?

Well, over the years, they’ve come up with a lot different and a lot more types of procedures that you as the practitioners NPs, PAs, surgeons are allowed to do and now do. Example sexual health they have the male sexual health and you know, to help assist with erectile dysfunction they have vaginal rejuvenation, whether it is radio frequency, whether it’s CO2, CO2 assisted radio frequency, they have the injectables and the supplements.

00:05:38:05 – 00:07:09:00

Jay Shorr

I’ve never in my life seen so many different different types of neural modulators, dermal fillers and volumizers than ever before. And every time you look around there’s a new 510K approval from the FDA waiting for FDA approval in phase three. Now we’re all familiar phase one, face two, face three of the FDA because of the pandemic and getting our different vaccines in place.

But you usually will never see an injectable or an FDA approved supplement or anything like that come to fruition in a year or less. But because we had the pandemic, it just had to be so now we have these neurotoxins, neuro modulators, and you have to be careful because they all are kind of like the botulinum clostridium toxin and they call them different names Type A, and they have the dermal fillers, whether it is the hyaluronic acid or the calcium hydroxy appetite and the polylactic acid, we can go on and on.

They all have their own types of components associated for different types of lines and different types of corrections, and then they have weight losses and body sculpting. Years ago it was the radio frequency and then it was the CO2 or CO2 spurs and the radio frequencies. And then they came out with the different types of Crayola polishes for body sculpting.

00:07:09:00 – 00:08:25:16

Jay Shorr

And it wasn’t just surgical where they had liposuction to sculpt your body. But then they came up with machine based lasers, criollo policies, and then there was weight loss and weight loss, whether it was through nutritional supplementation, weight loss, whether it was through ACG weight loss, whether it was from phentermine and different types of those types of supplements.

But you have to really in in Florida, for example, you have to have a weight loss, a patient bill of rights if you’re going to do weight loss program. But it shouldn’t just be weight loss, it should be body change, body lifestyle, nutrition supplementation. You should have somebody that’s a nutritionist to help you with it because it shouldn’t just be an injection of vitamin B12 back up.

It shouldn’t just be a pill that you take. You’ve got to have make it a change in your lifestyle or you’ll end up losing hundreds and hundreds of pounds, gaining it back, losing ten, 20, 30 pounds gaining them back. That’s why I come with hundreds of pounds. Unless you have the gastric bypass, you’re not going to lose that massive amounts of weight.

00:08:25:18 – 00:10:04:24

Jay Shorr

You have to get to a gym. You have to do good basic health hygiene and and eat right and do the proper types of vitamins, you know, And then you have the aesthetic cosmetic surgeries that we’re doing. And then lastly, you want to get into the supplementation, the BHRT, which is the bioidentical hormone replacement therapy, whether it’s for men or it’s for women, whether or not you want vitamins, whether or not you want different chemicals, whether or not you want pellets.

All right. So just be careful and make sure that you get somebody that is properly trained, that knows how to do it. So know that you’ll have to add additional equipment and supplies for your new services, as well as additional marketing. And guess what else you’re going to have to add the most important resource of your business, and that’s staff, because you have to have them knowledgeable, whether it is an institution, the medical assistant, where they’re allowed a vocational nurse and RN, a PA, a nurse practitioner, and then your physician.

So you really want to know that you’re going to have to add the piece of equipment because you can’t add these additional cash based services to your traditional insurance based practice unless you have the equipment to do it or the supplies the marketing effort to get it out there to the community that you actually perform that service and most importantly, the staff.

00:10:05:01 – 00:11:42:10

Jay Shorr

So let’s ask about what questions do you need to really take into consideration. And there are a lot. First of all, do you need this piece of equipment? Do you have the base, the base of patients that you may have heard me speak about something like this? And when do you purchase the next piece of equipment and how do you negotiate it?

Well, I’d say, do you have a need for it or do you want it? What is the length of time that this piece of equipment has actually been on the market? Has it been tried and tested? Is it in your marketplace? Is it safe, effective, efficacious and what price point can you charge a patient in your area for a treatment and a package of treatments?

Because once you do that, you want them to keep coming back for more. The art of having your patients come back for more for residual income is the best way to be able to keep this patient in your practice. And not only is it the machine that you’re going to be buying, that you’re going to be taking from a traditional insurance type of based of a practice to an aesthetic type of a practice?

But what are the costs of the consumables, the cycles, the clicks? And does it make sense financially for you to do that? Because if you are the Daily Deal groupon type of a practice, I’m going to say don’t do it because you’re going to have to reduce it 50%. And sometimes your cost of goods sold is 50% of your retail, and your retail is already being cut by 50%.

00:11:42:15 – 00:13:30:24

Jay Shorr

So unless you’re going to use it as a loss leader, I say don’t do it. Now, which practitioners are providing the treatments and who was legally allowed to do these treatments? Because in certain states, medical assistants, aestheticians and RNs are not allowed to perform certain procedures. And in other states under the direction of a medical director, the doctor, they are and many states now the nurse practitioner is allowed to practice solo.

And in many states it’s coming before the Board of Medicine and it will pass. How much pain or I like to refer to it as discomfort is in this procedure because, you know, if you sell a procedure and it hurts and I mean hurts more than just the rubber band sting from a laser, the patient may not and I say may not want to come back for more.

So there’s magical consult, closing questions. And when you’re seeing a patient, here are the five questions that you want to ask somebody. When are you looking to book this procedure? Because you want to know, are you spinning your wheels? Are you wasting your time? How long have you been thinking about this procedure? That’s a very good question to ask somebody, because when you ask that, you’re looking for definitive, closed ended and not open ended.

Yes or no? You know, you want a definitive question. So how long you been thinking about this, this procedure? For a while. Well, that lets you know that now is the time to really get in and push that close. Well, how does this procedure make you feel? Oh, it would make me feel just wonderful. Well, think about this.

00:13:31:01 – 00:14:43:16

Jay Shorr

When you go to buy a car and the salesman says to you, How would you feel driving up in that brand new car? Can’t you just picture yourself in that brand new car? Doesn’t that make you feel wonderful? So if you can get that out of a prospective patient, how does the thought of it make you feel? And they can get a smile on their face.

Come on in and close that procedure. And how so are you looking to have the procedure? Because that’s going to tell you whether or not you’re wasting your time or whether or not you can get that close done and then you can get it on the books. And when you don’t get that sense, you know that that feeling in your belly that let you know you’re ready to collect the patients money.

Well, what’s stopping you from booking this procedure today? Because that’s the magical pain point that you have to overcome once you overcome that magical pain point. Now you’ve taken the rest out of the equation. Now, if you have a traditional insurance based practice, you may have to consider adding another provider. So before you add another provider, what I want to know from you is do you have a job description for that procedure?

00:14:43:16 – 00:15:59:07

Jay Shorr

And if not, I urge you to get one in place. So what do you look for? Credentials, fellowship, experience. You look for qualifications. Somebody that has worked somewhere, an educational background that has done research. If it’s a physician, that board certification, is it a deal breaker for you? In many plastic surgery practices it is. Are there certain personnel and traits such as your bedside manner and your reputation?

Look, people up online, see what other people have to say about them. Look for different types of people that have written online about them may give you a good sense of who this person really is. You may have to change the way your staff answers the phone. It’s a whole lot different when you’re an insurance based practice than when you have to hug and cuddle.

Now when I mean hug. I mean, feel the love. Make sure you get all the contact information from this prospective patient and the patient so that you can end up calling them back and cross-train your staff on how to answer all the questions. I say, Do these mock interviews when you’re looking to join join a GPO. Many of you know it’s a group purchasing organization or a buyer’s group.

You say, Jay Well, what is this GPO or a buyer’s group? You know, it was a buyer’s group Costco, BJ’s, Sam’s Club, they are buyers groups. Now. What’s the advantage of a buyers group? Well, you’re able to be part of many as one and get the purchasing power of the group. So you may only buy one, two, three at a time, but if you’re in a buyer’s club, you’re getting the pricing advantage of that group or that club that buys hundreds of these things.

00:16:33:05 – 00:17:54:01

Jay Shorr

Utilize an online chat function. I know sometimes they can be annoying, but you may be able to have somebody answer some of the specific questions for you. And then the patient reminders are always key because you want to know when is your next upcoming appointment. Look in your practice management software and see how long it’s been since the last treatment’s been done.

Three months for a neural modulator neurotoxin. Six months to a year for a filler. Don’t wait for them to call you. You call them and put a key into your system so that when they haven’t been back in three months, six months, whether it’s a micro derm, a couple of weeks a month, you call them. If you have to wait for them to call you, you may be losing out on one cycle treatment in a year.

There’s always a lot great software out there and then you have to do your invertising and advertising and marketing. You have to hit that patient with an e-blast about different things that are going on. Utilize social media channels like Instagram, like Facebook, Google pay-per-click, use in office signage, which is called invertising. Shred those magazines and brochures in your office that people have to pick up and they lick their fingers.

00:17:54:03 – 00:19:13:02

Jay Shorr

They turn the pages, got to get rid of that, use a TV monitor or a different type of screen and then connect with the patients when it’s been that certain amount of time about their skin care products. It’s very important because you can have a regimen of patient that you have your patients on for skin care products. You are marketing the skin care product up 100% with a 50% net margin.

So even if you do run a special, you’re not losing all of the money in there because that’s right around time that they’re going to be using up their product when you’re calling them to order more or have autoship, just like we’ve all been doing with all of the online vendors and people that we’re buying everything from. And if you don’t make it easy for them to buy it, they can easily purchase it from somewhere else.

And ladies and gentlemen, that is how we add cash services to an insurance based practice. It has been my pleasure to spend the last 20 minutes with you. Good luck. God bless. And in 2021 and beyond, please stay safe.

00:19:13:04 – 00:20:13:06

Mara Shorr

So that wraps up today’s episode of Shorr Solutions: The Podcast. If we mentioned any links in our show notes, be sure to check them out for the easiest way to discover your best solutions you can find them. Yeah. In our show notes, we love your help in spreading the word about our podcast. How? Rate us and share this episode with your friends, colleagues, and the rest of your team.

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