The Insurance Dilemma: Should Clinics Rely on Insurance Companies or Ditch them?

Katie Bell: 1:13

Welcome back listeners to another episode of the treat your business podcast. I’m your host, Katie bell. And today, we are going to be tackling a topic that’s been buzzing in the industry, not just recently, but I think for for many, many years, I remember way back when when I started my first Fitbit, when I first started my clinic nine years ago, I had to make the big decision was I going to rely on working with insurance companies, or was I going to just totally have private payers within the business. And even before that working for somebody else in their private physio practice, I remember having to work with medical legal patients and patients that had Aviva or AXA health insurance. So we’re going to explore some of the reasons why physio clinics, and other clinics have traditionally relied on insurance work. And it’s often because the reimbursement system feels like a safe bet. It feels like we’re gonna get that steady income coming through that consistent flow of patients. But having worked with many, many of the insurance companies over the years and working for somebody else, and having to see those patients, is it really all it’s cracked up to be. And this might be a little controversial, but I can’t bear working with insurance companies in our clinic we work with, and this shows that I have to think about it because we barely work with any of them anymore. We work with AXA. We work with WPA and we work with Westfield, which is a kind of local health insurance, which WPA and Westfield are great because the patient pays and then they just get reimbursed. That’s a win for me. We pre COVID I think now we got rid of Bupa. And we now just work with AXA as our as kind of one of the only ones and on a very, very small basis. So the insurance model definitely does have its merits, okay, it’s it is okay for the client, I still can’t quite in my head reasons some of the astronomical fees that people pay for private health insurance, and what they actually get as a result of it, particularly when it comes to our physio services. But it does have its merits, especially in the beginning stages of owning a clinic. And I remember right at the beginning, I needed to make that decision, having worked in private practice for five years, and being really dissatisfied when I was working with patients who were coming through medical legal companies or using their own private health insurance. Because it just never allowed me to do a really great job. Now it does guarantee a certain level of financial stability. And yes, it can attract a broad range of patients. So for a business owner in the new stages, it can definitely be a win. However, over time, clinics find themselves just increasingly tangled in administrative red tape, payment delays, and even really limited treatment options dictated by the insurers to us. So for lots of those reasons, I made the decision when I first opened my clinic nine years ago, that we were not going to see any medical legal contracts. And I remember back nine years ago thinking am I just making this the craziest decision of my life because all these other clinics are doing it and the the clinic that I used to work at used to have them and they must create a drive in coming into the clinic. But I remember spending hours on reports trying to navigate really crap online systems that you’ve got to use that weren’t fit for purpose, having to basically give your left kidney to get another six sessions authorised for the patient who’s walked in with raging sciatica, who’s had back pain for 25 years who’s got a shift in their lumbar spine who is so fear avoidance of any kind of movement don’t want to doesn’t want to left has been living with on pain relief, and you get six sessions with Bupa to see them. And if you don’t get them better in six sessions, and you need to ask for more. Which I would say that most good physios who are trying to get patients not just symptom free but back to functioning as a normal human being are going to need more than six sessions. If you’re doing your job properly. Bupa then they they then you’re not seen as a great physio because you’re having to request more treatment sessions. So you kind of get punished is the long and short of it. So for All those reasons, I just thought I just don’t want to have to rely on this, I don’t want to have to rely on the medical legal world where we’ve got, there’s definitely people that are so genuine, that have had the accidents and things happen that definitely need our help. But the insurance companies are driving shorter, shorter appointment times, reducing our fees, and really just not the not supporting the knowledge and the training and the time to become an expert in our fields, and then saying to us that you can charge 27 pounds for that half an hour. And then you’ve got to report write a report, which can probably take another 15 minutes. So it just becomes a real bind and loads of administration and I and then the billing aspect of it. I’m now on my soapbox, the billing aspect of it is just a complete and utter joke. And then the payment delays and then the chasing got payments that haven’t come through because you’ve not put the right number on and all of these long, complicated reasons. So it’s got its merits in the news in in beginning stages of of owning a clinic, I can see why business owners would want to do it because it’s a safe bet it possibly ensures some steady income, it possibly ensure some consistent flow of patients. However, I started my business deciding that wasn’t going to be something that I was going to go down we did we worked with Bupa. Again, I had to give my left kidney to be on their register. And then we worked with Aviva. And we worked with AXA as kind of like the main ones, I never worked with Nuffield because I can’t, I couldn’t bear their portal or their system, or any of that fat. So we just decided to start the business nine years ago, with the majority of our fees being earned from private payers. Okay. And that is the way it has continued to go. I guess another trap is the quality of care versus the insurance restrictions. So insurance driven care. And I want to be kind of, I guess I want to say here that if you’re listening to this, and you do see insurance patients, I’m not saying that you don’t do a great job, I’m sure you do a fabulous job. However, the conditions for delivery when we’ve got insurance patients in front of us are crap, because most insurance companies don’t allow us to see the patient for long enough or frequent enough to give them that that kind of personalised evidence based care, it inadvertently steers the focus away from those individual individual patient needs, doesn’t it? And sometimes we can see that clinics might be compelled to prioritise treatments that are more likely to be covered, rather than than what’s genuine, genuinely best for the patient’s long term health. And quite often I’m getting to say the back pain scenario, just just because that’s in my mind, it’s an easy example. But quite often, in my clinic, we are a multidisciplinary clinic we work together as a as a cohort of experts to get the patient, not just pain free, not just symptom free, but get them functioning, get them doing all the things that they want to do in their life that pain has been stopping them from doing. Now, that doesn’t mean we can only do on the bed physio stuff, it means that they might be coming into our classes, we might be doing some rehabilitation sessions with them, we might be doing some gym based work with them. It can, it can be so broad. Now, quite a lot of times that isn’t what is covered by the insurance company. So is that genuinely what is best for the patient’s long term health. It compromises the core principle of physio, which is that personalised approach that’s what we believe is really important in our clinic. And we are evidence based practitioners limits on the number of sessions, as I’ve said, and having to give your blood to have another set of treatment authorised and then punished for not getting someone better with you know, as I said, reading sciatica in six sessions, again, just moves us away from really focused on you know, we are not just we’re not just good in our clinic, we are great we want we are trying to separate ourselves from the pack and say, you know, yeah, we are going to have to treat your symptoms. Absolutely. But we’re going to go much further than that, in getting you back to living that optimum sort of pain free life. financial implications. Now, there is a delicate balance against this. Some of you are going to be running clinics and a big proportion of your fees are going to be generated by insurance patients. You need to do your maths, you need to do the numbers, and you’ve listened to many of my podcasts. I’m sure by now you’ve come on some of our free master classes and I’m always talking about your numbers. But in a very simple terms, you have all of your revenue coming into the into your clinic into your business, what proportion of that revenue is made up from insurance patients. And if that those insurance patients are a big slice of the pie, we need to start thinking about how you can be less dependent on insurance companies and drive more private payers into your clinic. So when pre COVID We were thinking like Bupa was just doing my head in and I thought, we’re just gonna get rid of them. Now I can make quite quick decisions in the business based on a feeling and I thought, Okay, now it needs to do the math. This is what I would tell everybody else to do. So I looked at the proportion of our income coming from Bupa. And when I realised it was 3%, I literally just decided overnight it was going, because it is not enough for me to even give it the time and the energy and the the billing and the time of all my admin staff to manage all of that. So we just got rid of it. And we and there was a way that we did that. And I will talk to you about that as we go on. But how much of your pay is made up of your insurance patients and off that pie? How is that then split into different companies. So you’re very, very clear what percentage is coming from AXA Bupa Aviva medical legal companies. Now some of those insurance companies, I don’t know, I’ve never met them. But if you do have some of these that you work with brilliant, if they are paying fees that are in line with what you would normally charge great if their payment terms are 30 days, great. If they their portals and the the paperwork is extremely quick, and is not taking more of your clinicians time, but you’re not able to charge any further fees for Great, okay, if that’s not the case, you need to start thinking about if your income 20% of it is derived from insurance patients and that fee that that total income is I’m just going to make your 5000 in the month. If you then looked at if you started to replace those insurance patients with private payers, that income would probably be as much as eight to 10,000. So this isn’t always focusing on what we’re going to lose, but it’s about what we are going to gain. And I really feel strongly that if all clinicians got behind this stance that we are not prepared to work for such low fees, and such disparity across what consultants can charge what were all of the other billing codes, charge. And then you look at what we get as physios or osteopath, chiropractors or whatever it is. It’s, it’s, it’s disgusting, frankly. So if if all of us would take a stand and stop working with these insurance companies, something would have to change. And I decided for all of those reasons we were out, we were just not going to go there anymore. Now, transitioning away from insurance work requires strategic planning. Again, it is for some of you, it’s going to be a big proportion of your income. This is not about saying overnight, get rid it’s about looking long term of where you want to be in a year’s time. So if your income is made up of 50% insurance, why not make a decision that in a year’s time you are going to replace 10% of that with private payers. So we’ve now got a 6040 split, and then we go for a 7030. And then we go for an 8020. And that’s might be that might be where you’re happy. But we’ve got to explore alternative revenue streams. So offering specialised services, thinking about asset before programmes and packages of treatment. And there will always be some initial challenges breaking free from insurance companies to give you that financial autonomy and that freedom to innovate in your business, which Insurance companies do not allow you to do. True Innovation often comes from a place of freedom. So we want to translate this into how can we improve patient engagement? How can we improve our long term success in the clinic and that’s going to be through reputation through delivering not just an okay service because the conditions that we’ve got to deliver are so poor but a fabulous service because we are autonomous practitioners and we are creating In a way of working with people that gets them the results that they are looking for, and they deserve and allows us to make the impact on the health and well health and wellness of our patients and our clients. So when we’ve not got these insurance companies that we’re not spending hours trying to work out how the heck health code works in all of these ridiculous ways that we have to abide by, clinically, you can invest more time in building those strong patient relationships. When we made the decision to leave bucur. We wrote to all of our patients that use Bupa and we we were really open and honest, we were very vulnerable with it. And I thought I’m not going to wrap this up. I’m just going to say how it exactly is. And we explained that we’ve had to make the very, very difficult decision to stop using Bupa. And the and these are the reasons and we talked about the fee structure. We talked about the the paperwork, we talked about what impact that was having on the results that we could offer our clients and why that didn’t align with us as a business and therefore, we weren’t going to be using them any any longer. Now quite a lot of those patients just decided to pay privately to see us instead. So what actually happened is we didn’t actually lose any income we just gained. engaged patients are going to adhere to their treatment plans, it’s going to give them better outcomes, it’s going to give you a better reputation in your clinic. So have carefully plummet think about where you are now doesn’t have to happen overnight. And then think about the communication aspects of what clients you’re going to want to communicate with. Look at your revenue, your revenue streams, what proportion is coming in from certain companies, and make a decision as a business where you want to be in 12 months time, inform your existing patients about the change, and really emphasise the benefits of this kind of patient centred care and expanded service offerings. You’re not doing this because you go in smaller and you kind of honing in, you’re doing this to allow for expansion. optimise your billing your payment systems to ensure that really smooth financial transition. But when you’ve made that clear decision to move away from being dependent on insurance companies, and a no, it’s not a light one to take that strategic shift requires commitment, it requires you to just to really follow through with it, make the decision, put the things in place, and then watch your income grow. I hope you’ve enjoyed this slightly controversial podcast. But it’s so important that you guys take control of your business, you should not be at the calling of all of these insurance companies, you should not be being paid 20 to 25 pounds for what is basically about 45 minutes of work. By the time you’ve added in all of the complexities around working with insurance companies. You’re you are way too qualified and way too good at what you do to be told that you can’t charge the fees that we deserve. So I really hope some of you come off this podcast and start going to look at your fees that you are earning from insurance companies and start making some really bold decisions. Stay tuned for our next episode next week where we’re going to be diving into another aspect of running your clinic. Until then, go and keep making a difference. Thanks for joining me