How to Transition from an Insurance Model to Private Pay

How to Transition from an Insurance Model to Private Pay

Are you a nutrition and wellness professional looking to transition from an insurance model to private pay? If so, you’ve come to the right place.

The insurance model is no longer sustainable for many medical professionals, including dietitians and nutritionists. As such, making the switch to private pay can offer more freedom and autonomy in your career. Plus, it will also help you expand your services with cash-paying clients!

In this post, we will explore the differences between insurance clients and private pay clients, discuss the benefits of transitioning away from insurance companies, provide steps for making the switch successfully, and offer tips for setting up your business for success with a new model.

We will also share strategies for marketing your services as a private practice and highlight available resources to help along your journey.

By the end of this blog post, you should have all of the tools necessary to transition confidently from insurance-based care to private pay!

Private Pay vs. Insurance Company Model: Overview

There are some key distinctions to consider regarding getting paid by an insurance company vs. private pay (or fee-for-service practice) models. The obvious differences include that the health insurance company is a third-party intermediary with insurance-based care and pays for services rendered based on predetermined fee schedules.

In contrast, a private pay practice model requires you to charge clients directly for your services and does not involve accepting insurance. It’s all you for the billing and collection of funds owed. No big surprises here, so far, right?

Benefits of Transitioning to Private Pay

Any business model has pros and cons, and insurance versus cash pay is no exception. After coaching many hundreds of health professionals over nine years as a practice-building expert, I admit my bias toward a cash-pay practice. Or even a hybrid model where you accept only your top-paying insurance plans while the remainder of your practice is cash-based.

In many cases, transitioning from insurance-based care to private pay has many benefits, including providing highly personalized and comprehensive care tailored to your client’s needs and preferences. You get to work with clients in a way that best serves them with fewer restrictions. When your clients pay out of pocket, the insurance companies no longer dictate what you can and can’t do!

So running a cash-based practice can create a deeper connection with your clients and offer more individualized services that insurance companies may not cover. Additionally, you can provide higher-quality care without insurance companies dictating the prices of your services or how many sessions you have with each client.

Insurance is a high-volume model whereby you need to see lots and lots of clients every single day of the week to make good money. The biggest issue I see with insurance providers is high levels of burnout and exhaustion. Because you aren’t making money unless you’re in front of clients, this model is challenging to scale, which means if you have to take time off for any reason, your business is not generating revenue.

Eventually, you will max out within the insurance model because you have no more available hours to “sell”. You can’t create more time to see more clients, and you also can’t increase your rates, so this significantly limits your ability to grow (unless you hire out or grow your team – which is a blog for another day!).

On the other hand, when you transition to private pay, you have the freedom to set your own rates which will allow you to earn more money over time. You are no longer limited by insurance company fee schedules and can charge what you choose for your services. This often leads to higher revenue with fewer clients as well.

Finally, by transitioning to a private pay model, you become free from insurance reimbursement delays and denials, allowing you to focus on providing adequate nutrition and wellness solutions rather than worrying about insurance paperwork. Most insurance companies are difficult to get reimbursed from which can lead to cash flow issues.

Steps for Making the Transition from Insurance to Private Practice

Making the switch from insurance to a successful private practice can seem daunting, but with some planning and effort, it is possible!

Here are some steps to help you get started:

  1. One option is to start the process by eliminating the “dud” insurance plans and keeping only the top-paying plans. This means dumping the plans that aren’t paying well or removing the ones that are making you jump through hoops to get paid.
  2. Research alternative benefits that cover health services, such as Flexible Spending Accounts (FSA)  or Health Spending Accounts (HSA). Many insurance recipients have these benefits and might not realize they can use them to cover the cost of your services.
  3. Develop packages and programs which enable you to bundle your services. I highly recommend that you move into a program/package business model because you will get better clinical results and outcomes, and it improves the lifetime value of each client. Decide your pricing for each package and consider payment plans too. I recommend opening a Stripe account to manage your credit card payments.
  4. Set up systems and processes: Create a new system or process for collecting payments from your new private pay clients, booking appointments, managing client information, and keeping track of payments.
  5. Introduce changes to clients: Reach out to your current clients, inform them about the new system, and explain why it benefits them (hint: more intensive services mean more support/handholding and usually equates to improved results).
  6. Market your services: Create a marketing plan to help you reach potential clients unfamiliar with private pay practice models.

Tips for Setting up Your Private Pay Practice

Once you’ve made the switch from insurance-based care to private pay, there are several steps you can take to ensure that your business continues to be successful in its new model.

Payment Options for Private Practices:

While many private pay practices are thought of as working with “cash-paying clients”, very few people will actually pay cash outright. Most will pay with a credit or debit card, just as they do with any other service. Your new private pay clients are paying out of pocket so you’ll need to have your payment options arranged ahead of time.

I recommend that you have each client sign a credit card authorization form that gives you permission to charge their credit card. This is in contrast with “invoicing” your client – which I do not recommend! You must retain control of the collection process.

Streamline Your Services & Schedule:

Evaluate and streamline your programs and packages so that you can provide the best possible care in an efficient manner. Eliminate super time-consuming components (or charge a premium).

When it comes to scheduling, your own schedule may change since you are no longer bound by insurance reimbursement rules. Make sure that you have a system in place to make scheduling easy and simple for both you and your client.

Set Policies for Your New Payment Model:

Establish clear private pay policies about cancellations and late payments so that new and existing clients understand how these will be handled in advance.

Be Flexible:

Consider making exceptions on occasion if clients are struggling financially but still need assistance – this will build trust with your clients.

When it comes down to it, private pay isn’t that different from insurance-based care. Ultimately, you are still providing effective nutrition and wellness solutions to your clients – the only difference is that insurance companies are not part of the equation. You’re in the driver’s seat which means it’s up to you to make some key decisions.

Strategies for Marketing and Promoting Your Services to Private Pay Clients

The key to success when transitioning from insurance-based care to private pay is consistent marketing efforts!

While we typically think of a “marketing strategy” as traditional advertising, social media, radio spots, or TV commercials, many other ways to promote your private practice exist.

Here are a few ideas:

Get the Word Out:

Contact colleagues and referral sources in the community who can spread the word and send private pay referrals your way. When you cultivate private pay referrals, you reach prospective clients that are otherwise unfamiliar with you and how you can help.

Your current clients can also be powerful advocates for your services. Ask them to share their results and experiences with friends, family, and coworkers.

Build an online presence:

Building an online presence includes creating a website and social media content.

Having a website for your business will make it easier for ideal clients to find you, understand your services, and help you grow your email list. At the same time, social media content creation on platforms your ideal audience hangs out on is a great way to provide valuable educational material and can significantly expand your reach beyond what would otherwise be possible.

Social media lets you stay in touch with current and potential clients and keep them informed about your offers. This is also your opportunity to showcase your specialized expertise and share results that clients have achieved through working with you

Networking events:

Attending or hosting local networking events might be old-school, but it still works! Relationship-based sales are still my all-time favorite strategy. This can be an effective way to meet potential clients and build relationships with referral sources in the community.

Offer complimentary consultations:

Offering free sessions or complimentary calls are great ways to attract and book new clients into your programs and packages and can help you to build relationships with existing clients.

You can use many effective strategies to market and promote your private pay practice, from building an online presence to attending local networking events. With the right strategy and effort, transitioning from insurance-based care to private pay can be a successful venture.

Resources Available to Help You Transition Successfully

The transition from insurance-based care to private pay can feel overwhelming. Don’t worry; there are plenty of resources (and people!) who can help you.

Private Coaching:

In my 1:1 coaching programs, I help nutrition and wellness professionals navigate the insurance-to-private pay transition. This is the highest level of support and guidance you can get to make the switch.

Online Courses:

Online courses are another great way to learn about insurance-to-private pay transitions if you’re looking for a more self-paced option. These courses typically provide helpful tools, resources, and information on successfully transitioning.

Free Webinars and Workshops:

Webinars and seminars are also great resources for learning about the ins and outs of running your practice as a private pay model. Just be aware that sometimes too many free resources will contribute to more overwhelm and doesn’t always lead to more private pay clients. Sometimes it’s better to accept that you need help and engage a mentor in private coaching or an appropriate group program not ensure optimal results. Just sayin’.

Social media communities or groups:

Joining social media communities or groups can be a great way to connect with other practitioners and get advice on transitioning to private pay. If you are looking for a supportive community of health professionals, try the Multiple Streams of Income for Your Health Practice or the Build Your Killer Practice Facebook group, Both of these are my communities and the collaborative and friendly people you’ll meet will be happy to share the strategies that are working for them.

Private Mastermind Groups:

If you want a more intimate setting, consider joining or forming a private mastermind group with other practitioners. You’ll be able to share experiences and advice while getting the support and guidance needed to make the insurance-to-private pay switch successful. I offer the Income Accelerator for Health Professionals for only $97/month.

Group Coaching Programs:

Many health professionals I privately coach are also enrolled in my group coaching programs. I offer courses on everything from creating your online course (Lucrative Course Blueprint) to growing your practice to 6 figures and beyond with the 6-Figure Biz Academy for Health Professionals.

Closing Thoughts on Insurance vs Private Pay Models in Nutrition and Wellness Practices

Switching from insurance-based care to private pay can feel intimidating, but with the right resources and guidance, it is possible.

By taking the time to properly set up your business for success with the right marketing strategies, a business plan,  and support systems in place, you will be well on your way toward providing quality nutrition and wellness services that your clients can trust – without relying on insurance.

Ultimately, insurance and private pay models provide quality nutrition and wellness solutions to individuals who need them, but they differ in how they are billed and managed. And while the general public may more widely accept insurance-based care, private pay models are quickly gaining traction as a viable option, especially for functional nutrition and medicine practices. And the private pay model has many benefits including a much higher income opportunity!

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Lesli Bitel, MBA, RDN, LDN, is a sought-after Business Strategist and Mentor specializing in guiding integrative and functional medicine professionals through the complexities of practice building.

Her mission is to unravel the confusion associated with the business side of running a successful private practice. Lesli focuses on real-world marketing and client attraction strategies to seamlessly integrate multiple income streams into the private practice business model, including

  • 1:1 coaching to online courses
  • Group programs
  • Online courses
  • Passive income products
  • Memberships
  • And more

In her work, Lesli draws on her experience running her own 6-figure functional nutrition practice, specializing in helping patients with neurological disorders. She also has a 13-year tenure in the pharmaceutical and diagnostic testing industries, where she excelled in marketing and sales, eventually reaching high-level executive roles.

For over a decade, she has empowered practitioners to overcome business challenges, attract ideal clients, and diversify income streams for thriving practices. Lesli offers private coaching, classes, webinars, and more, dividing her time between Salida, CO, and Lake Geneva, WI.

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