Shared by: Miles Bodzin, DC www.CashPractice.com Why Have a Cash Practice? October 1, 2003 Here is the latest issue of Dr. Bodzin's Nuts & Bolts of Cash Practice Newsletter. I hope you enjoy it and learn something new. If you have any questions, feel free to contact me by email. ------------------------------------------------------------------------ I was on the phone today with one of the doctors who recently bought my Cash Practice Calculator and we got into the subject of the philosophy behind running a cash practice. ------------------------------------------------------------------------ It seems that doctors automatically make the assumption that running a cash practice means doing prepays. Well that couldn't be further from the truth. Having a cash practice is not about having everyone prepay for their care. A practice full of prepay patients is a practice out of balance. It is a practice dependent on new patients. It is a practice with the same stress as a non-cash practice - where are my new patients? No new patient means no new income. If running a cash practice is not about prepay then what is it about. The real philosophy of having a cash practice is being in control of one's own destiny. Not being dependent on some third party to support your life. As Dr. Fred Scofield told me years ago, "Taking Charge!" Although the philosophy behind having a cash practice is taking charge, the Purpose of having a cash practice is to support your lifestyle. That's right. The purpose is to support your lifestyle. I choose to have a lifestyle that is fun and free from as much stress as possible. You can too. ------------------------------------------------------------------------ "Dr. Miles, this is the missing link that I've been looking for. I will bring in almost $6,000 in revenue for the same work... A nice 50% increase... These were the easiest closes I have had in 18 years of practice. That certainly makes me feel a whole lot better with my future. I definitely recommend your Cash Practice Calculator." - William Moyal, D.C. Miami, Fl ------------------------------------------------------------------------ Back to the assumption that cash practice is about prepays being wrong. The key to having a STRESS FREE cash practice is creating CASH FLOW. It is not about having a great month of collections. I love those practice management ads with all the testimonials about how doctor so and so collected $xyz that month. Big deal! It's not about a big month's collections. Anybody can have a big month. It's about creating a consistent flow of income that supports the practice and your lifestyle. Prepays, although nice to have, do not support a "consistent" cash flow. I'll repeat. The key is to have enough CONSISTENT monthly income from your cash patients to support your practice and lifestyle. Lots and Lots and Lots of patients on monthly payment plans accomplishes this. If you had 200 patients each paying you $150 a month on average, you would have a consistent cash flow of $30,000 per month. Do I accept prepays? Yes, it is an option for our patients. However, we also encourage monthly payment plans. My favorite it the Option 2 choice on our cash plans. Option 2 is where a patient pays a third down and the balance is paid monthly. This down payment creates commitment on the part of the patient, where as the monthly payments creates the consistent cash flow. And quite frankly, patients who pay monthly stay longer whereas prepay patients have to "renew" at the end of their term and any time a patient has to make a "choice" regarding renewing, you will lose some of them. However, if a patient is already used to paying a monthly fee, when the renewal comes up, the monthly fee should be lower (since they are coming in less often). They're happy to continue, especially when the fee has gone down. „Hey Mary, your monthly fee is going down from $285 to $155 per month. Isnžt that great!ū After a long enough period of time, you will have built up a clientele of patients who consistently, month-after-month, pay you to care for them. You can literally go months WITHOUT a new patient walking in the door. Do you know how good it feels to be able to just take care of people and not be concerned about new patients? It is truly the definition of a fun, stress-free practice! I hope this was helpful. If you need any further assistance, just let me know. Yours in excellent service, Miles Bodzin, DC www.CashPractice.com