Why you should consider paying cash for your healthcare

Value, Value, Value. Value is both a verb and a noun. As a noun it is defined as “the regard that something is held to deserve; the importance, worth, or usefulness of something; also, a person’s principles or standards of behavior. As a verb “consider (someone or something) to be important or beneficial; have a high opinion of. Or, the estimate monetary worth of something.”

What do you value? Your time, your family, your passions, your health. When you make the choice to pay cash for something you value that product more. That is your hard-earned money and you are making a conscious decision to use your money to purchase something. This means you feel that product, good, or service is worth your time and energy translated into currency. This usually means the product you purchase is of higher quality or value. Now when I go out and want to buy a hamburger, I can buy a fast food $1.00 hamburger. Or I can go to steak house or pub and spend $15 on a hamburger. Why does the pub cost 15x more? Perhaps they simply charge more, but if that were true people would likely stop buying it and wait to go get fast food. Likely, the quality of hamburger is better at the pub. It was made with more care, or better ingredients. Don’t get me wrong, I love fast food to a fault. It is a guilty pleasure, but if I have a choice I would much rather have a steak with a side from a fancy steak house than a burger and fries from a fast food joint. Both are beef with some carbohydrates. But one is inherently better. This is healthcare today. When you choose to pay cash for your health, you most likely will be receiving a better product than if you use insurance. You are choosing the steak.

Let me explain: when you choose to use your insurance, the insurance tells the provider that in order for that healthcare provider to have access to you as a client/patient they (the insurance) need to get a discount of anywhere from 30 cents to 75 cents on the dollar worth of the service. Now healthcare providers got into the business of healthcare to help people, but they need to pay for their bills, rent, student loans, a hamburger or two, etc. So, they have a couple options with charging you. They can charge you a competitive rate in cash or choose to be in network with the insurance and increase the volume of patients they see to make back the difference in what they are reimbursed by the insurance. When healthcare providers are forced to accept a higher volume, then they will use ancillary staff of techs, assistants, and other support staff to carry the load of seeing more people. This means in Physical Therapy you likely will be seeing and working with the support staff 75% of your time in Physical Therapy and 25% of your time with the Physical Therapist, the same healthcare provider you originally came to see or that your physician referred you to. The insurance soon becomes a model of volume like fast food. A lot of hamburgers out to people, but is it the highest quality of products? Is it the greatest amount of care made in making the hamburger? Again, likely not. And this is where insurance falters with routine care. Don’t get me wrong, I have insurance and use it like anyone else, but really it should be used for catastrophic issues and not routine care.

Won’t this get expensive then if I am paying cash?

Another reason to use cash for physical therapy is value from a monetary standpoint. You can actually save money. Insurance co-pays continue to increase along with deductibles. Remember, insurance companies are businesses and they are looking for ways to make money and not lose it. So, they often structure their plans in ways that ultimately they are making money if you choose to use your insurance for Physical Therapy. Here is an example: You go see your Physician because your shoulder hurts and they recommend you go to Physical Therapy. A common prescription is 3 visits a week for 4 weeks, or 12 visits. On your first day you schedule a visit to see the Physical Therapist. The Physical Therapist will spend anywhere from 15-40 minutes examining you and giving you a prescription depending on the complexity of your case. You will then spend the following 4 – 6 weeks going and each visit you will be asked to pay a copay. The average copay is $20-$55 and the average deductible is $4364 for an individual and $8439 for family. At the end of your 12 visits you may have spent as much as $600 in copays. Also, you might not have met your deductible for the year and an additional bill will be coming from the PT clinic for as much as $1500 that you owe the Physical Therapist since your insurance hasn’t kicked in. During these visits you likely are spending 75% of your time with the Physical Therapist Tech or assistant with you being attached to machines that have questionable effectiveness, but it can be billed for, and remember the Physical Therapist has to find a way to make up the money they are losing by being in network so they are seeing other patients at the same time as you running back and forth and doing the documentation to submit to the insurance so they get paid for seeing you for 15 minutes. By the end of the 6 weeks your pain may be gone, or it might still be there due to the fact that the treatment you are receiving from Physical Therapy is less than perfect care. Often times it is still there, if it is still there, then your physician may give you another referral for Physical Therapy or have you come in for an injection, imaging, or other procedures to figure out what is wrong. This means more money for your physician and more money for more physical therapy that you are paying out in visits. But what is the worst is this is more time taken out of your schedule and your problem is still there. That is 6 weeks you can’t get back.

Now, if you chose to pay for your Physical Therapy with cash. A typical visit might cost anywhere from $100 to $350, but the therapist will be spending all their time with you for roughly an hour to really understand what is wrong, prescribe exercises/stretches to help, using their hands to physically stretch or mobilize your body, and creating a plan of care that fits your needs and goals. The cash based therapist can see you for multiple issues at the same time while the insurance based PT can only focus on one issue because that is what the insurance will allow. Because it is more expensive initially you might choose to spread out your visits to 1x a week. After 4 weeks of seeing your therapist at say $150 a visit you notice your pain is gone or has lessened and you know better how to manage your pain. You paid $600 in both scenarios, but got better 2 weeks faster. You gained 2 weeks of your life, goals, interests back. There is value with paying cash and possibly even saving money.

So the question is, what do you value? When it comes to your health, time, and energy. Get the steak.

Pulford K, Kilduff B, Hanney WJ, Kolber M, Liu X, Miller R. Service utilization and costs of patients at a cash-based physical therapy clinic. Health Care Manag (Frederick). 2019;38(1):37-43.https://pubmed.ncbi.nlm.nih.gov/30640238/↩

Rosato D. How paying your doctor in cash could save you money. Consumer Reports. Published May 4, 2018. Accessed February 26, 2021. https://www.consumerreports.org/healthcare-costs/how-paying-your-doctor-in-cash-could-save-you-money/↩