Why You Should Consider Cash-Based Occupational Therapy

Cash-Based Occupational Therapy. GettyImages

Like many Americans, I now have a high-deductible plan and find myself doing something I’ve never done before: shopping for my health care.

I’m in the middle of some prenatal care and have some occupational therapy and physical therapy needs that I hope to meet for a reasonable amount. This search has brought me face to face with something that I’ve heard talk of in my therapy circles—cash based therapy practices.

I know from my fellow therapists that there are more and more incentives for therapy clinics to step outside of the complex world of insurance-based care and switch to cash-based practice.

But there is less written about how these practices benefit consumers. To answer some of my questions, I reached out to Paul Potter, a physical therapist who blogs and has written a book about cash therapy practices to answer some of my questions.

Why are most therapists offering cash-based services?

In the last several years, there's been a health care revolution occurring in the United States. In order to control rising health care costs, government agencies and insurance companies have put in measures to transfer the cost of health care to consumers.

Simultaneously, they have also put in measures to transfer some of the risk of providing services to health care providers. The net result of increased regulation and decreased reimbursement is a cost shifting to consumers and providers.

The net effect that consumers feel is through higher deductibles and co-pays. It is not uncommon for families to have a deductible of $5,000 to $10,000. Co-pays are rising to $60 to $75 per visit. On the health care provider side, reimbursement levels are being capped at a per visit rate, with no regards to patient complexity and difficulty.

Increased regulations have contributed to higher overhead expenses and administrative costs.

Therefore, there has been a movement among therapy providers to step out of the insurance-based system, and offer their services directly to the consumer. With the elimination of the administrative overhead, the clinician is free to offer longer treatment times, with more personalized care. The gap between the copay amount and full charge for an out-of-network provider has lessened considerably.

An improved outcome is usually the result of a high-value service offered to consumers that are seeking the best value for their dollar. Many therapists have found the cash therapy model to be a more efficient model, to provide services directly to their patients.

What are the benefits to the client for paying cash for their therapy services?

The benefit to the client is a higher quality service, as evident through longer treatment times and one-on-one, personalized care. The cash-based therapist knows that, in order for them to stay in business, they must provide favorable outcomes for the clients in their care.

Word-of-mouth advertising is the lifeblood of any cash based practice. Clients will sense that their therapists are committed to them getting better because both parties will benefit from a positive outcome in a cost effective manner.

On the other hand, the patient now has an investment in their medical care. Because a third party payer is no longer footing the bill, it is their own money they are spending. They are intrinsically motivated to do their part to make the program work. The cash-based service model facilitates a partnership between the patient and the provider.

Another benefit that is often overlooked is that the patient and the provider carry on a conversation that incorporates what the patient can afford, and how to achieve their goals in the most efficient and cost-effective manner. Both parties are interested in how much the service costs and how long it will last. Much more than sending the bills off to insurance company and see how much they will pay.

How are therapy clinics benefiting from offering cash therapy services?

The benefits can be described in three main areas:

1. Professional freedom

2. Personal freedom

3. Financial freedom

Professional Freedom

In order to have a thriving cash-based practice, a therapist usually specializes in a specific niche. This allows the therapist to concentrate on improving their professional expertise in a specific area. This concentration of skills and training increases the provider satisfaction and productivity.

Personal freedom

There is often an increased control over their work-life balance when the provider is making the decisions on how much they want to make, and how long they want to work.

One of the complaints of a corporate therapy job is a high volume of patient load increases stress on the provider in getting his work done during the day. A cash-based therapist is generally in control of their schedule, and is more flexible to make decisions regarding hours worked, and their schedule for family time.

Financial freedom

The decreased overhead, and simplicity of the cash-based system allows the therapist to reap the benefit from their risks and hard work, directly. No longer is the effort going toward improving a corporation's stock price, or stakeholder shares.

4.) I'm not used to shopping for health care services, but now I have a high-deductible plan, I find myself doing just that. Do you have any suggestions for making sure I'm paying a reasonable amount and getting a good value for my dollar?

One of the benefits from being treated by a cash therapy practice is the transparency regarding the actual cost of visits and duration of care.

My suggestion is that you do a Google search on the Internet prior to visiting any therapist, check out their webpage to see if there's information that discloses the cost per visit, and their payment policies. Don't be afraid to call and ask to speak with the business manager or billing manager, or the therapist herself, to discuss treatment prices.

You might also benefit from having an initial consultation in which the therapist would perform an initial evaluation, and give you an estimate of the cost and plan of care. Most therapists do not provide the initial consultation free, but it is your best way to do comparative pricing between clinics.

The benefit of a cash-based practice is that the financial considerations are just part of the normal conversations, and they are used to providing you that information upfront. I would be hesitant to enter into a course of treatment with a clinic that would not provide you this information. 

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