Four Things to Do BEFORE Starting a Cash Pay Clinic
“It wasn’t raining when Noah built the Ark.”
-Richard Cushing
You wish to spend more time with patients while offering high-quality care. You’re tired of dealing with health plans’ red tape. Maybe a colleague boasted that he can charge $300-$400 a consult out of pocket. To which you say, “you know what, I can do that too!” We don’t blame you. But when starting our own cash pay clinic, we had to juggle several elements during the transition. We distilled that planning into four parts you must consider before launching that journey. This will:
Prevent you from making the same mistakes we did
Help patients understand your cash pay clinic setup
You can’t undo a cash pay or direct primary care (DPC) clinic with a control + Z keystroke. So let’s do a little pre-prep.
Today’s TLDR—the four things to do first, in order
Ask yourself why you want to pursue cash pay medicine. Are you sure about that?
Envision the patients you want to see. Does your local community have a favorable demographic?
Know your timeline to make the switch. How fast do you expect to go cash pay? Is that feasible?
Choose the ideal business model for your specialty and location.
1. Ask yourself, why? Why do you want to do this?
Yes, really. Is the pursuit of cash pay for you? Your patients? Your team? To reclaim sanity? To make more money? To ease major stress? Do you want more control over your time (and maybe your life)? Don’t consider going 100% private if unclear on any of these aims.
2. Envision the patients you want to see
Medicine is a local practice at heart. Knowing your community within 20-30+ miles of the clinic is a great first step for proper targeting. Like any prolific office, seek new patients. Established patient attrition from the initial cash pay transition can make room for this.
Let’s do a brief exercise. Patient caricatures are your best friend in any growth aim, but especially so for cash pay clinics. Grab yourself scratch paper or a notepad. Write out a list of what your ideal patient “personas” are. How do these patients spend their day? What is their home life situation? Do they pour milk before cereal? What do they do for work? Start there. Avoid focusing on age alone.
For reference, our clinic’s most common personas are:
Up-and-coming professionals at a top-five local employer in the state (in our case, Intel and Nike) with a young family or planning to start one
Former teachers and school district employees neglecting their own care for years but who now wish to be followed by a watchful dermatologist
Small and medium-sized business owners seeking frequent head-to-toe mole mapping/skin cancer screening due to decades of sun exposure related to their work
The best personas have two complements
Think salt and pepper or Reese’s peanut butter and chocolate. Make sure there is a clear link between where the patient comes from (e.g. their profession, social background, aspirations, etc.) and what you offer (XYZ outpatient service tailored to said patients). Channel your diagnostic observation skills. Have your manager take notes too. Your first-draft personas will be precisely wrong but vaguely right. Iterate them to be mostly correct. For any cash pay office, there will be some bias towards the affluent. Not everyone has spare cash for healthcare—that’s reality. But DO NOT ASSUME that you’re only going to serve your local Kardashians. There’s more variety in socio-economic background than you may expect. Keep an open mind for other demographics you haven’t reached yet. More on this in a moment.
Given that medical bills are a leading cause of personal bankruptcy in the US, it’s no surprise that patients view healthcare as an expense.
Take yourself for example. You probably have medical insurance. Over 92% of US residents have some form of health coverage. That plan is paid for either directly (your premium) or indirectly (your taxes). Said insurers then promise that your care will be handled at minimal extra expense. Although not always the case, this mental conditioning sets in like concrete. You’re already paying for the insurance and it’s *supposed* to work for you. So why bother shelling out more dough? And now the private pay doctors lament, “but I provide X, Y, and Z to my patients above and beyond expectations!” Don’t waste breath on patients seeking in-network care only for the sake of having “free” care.
So who do you target instead?
Certain patients consider their health to be an investment, NOT an expense. Recruit them to your cause. They view their doctor as a lifelong partner, not a one-visit dictator, of their care. Prevention and process become just as important as treatment. These patients are willing and able to pay for high-quality care, even if their income hovers around US GDP per capita. Also take care of the patients with subacute to acute problems aligning with your service. For example, if you have expertise in skin cancers, leverage that to the hilt. Carry the years’ worth of trust built up among your most loyal intergenerational patients with a white glove. Or maybe a sterile glove. You can lose these patients in ten seconds if you’re not careful. Regardless of what personas resonate the most with your services, cultivate the proper mindset among all your patient groups. Again, position your services as an investment, not an expense. This is the essence of patient demographic targeting.
3. Know your timeline
From experience, we went cash pay in three months, but had to rip off many band-aids at once. We terminated all insurance plans, including Medicare, in one swoop. We do not recommend this drastic violence of action. It’s a smoother process to peel off insurance contracts, a few at a time, over 6-12 months. We did not have that luxury. But you might—treasure that time. Exercise selectivity in cutting the lowest value-add and lowest volume health plans first. Larger insurers such as Aetna and Medicare drastically impact your patient panel. Save them for last. Build up experience with appeasing patients from the smaller plans you remove first. Explore if a 'hybrid' out-of-network dynamic works for the clinic. But avoid being hybrid forever. This will confuse new and established patients, especially if you drop some but not all commercial plans under the same parent. There is an exception: terminating government payers but keeping all other insurers. It’s not uncommon for specialty practices to pack the schedule with higher-paying commercial plans over Medicare. Medicare and Medicaid usually reimburse less for equivalent work. The moral issues of alienating these members can be its own story.
Blocking appropriate time matters.
It can take longer than expected to terminate plans. You may have a contractual obligation to care for certain members in-network up through a specific date. Other health plans may be flexible with termination requests but some cool-off periods may be three months minimum. Consult your lawyer or state medical association for best practices here. There will be a future article with termination letter templates.
4. Choose your business model wisely
Yes, cash pay medicine is much more than asking patients to “show me the money!” Patients should understand what they are paying for ahead of time. We’ll post a more detailed guide separately. Here’s a brief summary table in the meantime.
Most existing private play clinics choose a paygo or concierge model. Reimbursement must align with the nature of your specialty. A neurosurgeon probably shouldn’t have a retainer. Family medicine doctors fare better with a concierge setup over paygo. Your location and ideal patient pool can allow for some exceptions.
Beyond this list: the road ahead
You’re more prepared than before, but maybe a little overwhelmed. Going cash pay is a huge decision—if possible, take your time in making this choice. And then 100% commit when ready. Either way, Care to Cash is here to guide you through the private pay journey. Reach us on our Substack or contact me directly @caretocash on x.com to address questions for your practice.