prettygreeneyes said:
As a question to Ben, I curious to know if it makes a difference as to where you are at with your practice as to which insurances you should accept? Assuming that you could get on every insurance panel, is it better when you are first starting out with your practice to take every insurance under the sun to get the maximum number of patients into your office? And then as your patient base grows become increasingly more selective? Or, do you start out being selective to ensure you are getting the most out of your chair time?
The answer to this question is very personal. As ucbsowarrior suggests, it is very difficult to change the direction of your practice so you must decide what type of practice you want to have. There are practices that do very well servicing low-paying patients/insurance companies because they make it up on volume. You cannot have a large overhead in this type of practice if you want to be profitable. That is why corporate docs can do very well. They can see 10 patients a day at $50 a patient ($500/day) with little overhead and clear well over $100K a year. This is only because their overhead is less than 10%. In a private practice the overhead is closer to 65%, so if you bring in $500/day, or roughly $130K per year at 5 days per week for 52 weeks per year, your take home is only $45K. So you must decide what type of practice you want, and make sure you are practicing in a state where you can achieve that. From what I have read on this forum, in some states it is very difficult to get on insurance panels. I don't know which states are better for this, but you better be sure you know before you decide where you want to practice.
For me, I would not take any insurance plan that pays lower than VSP. Even in the beginning. I would not take VSP except that in my practice, it represents about 25% of my patients. Just to show you how hard it is to change direction in your practice, let me give you an example. In my area, VSP is being challenged by NorthWest Benefits. NWB is a discount eyecare plan, like Davis or Cole. A lot of the school districts in my area switched from VSP to NWB. For exams, the reimbursement is close, with VSP paying about $5 more. The problem is on the materials side. If the patient stays within their plan, we get reimbursed for the cost of the materials only. If they go above their plan, we get reimbursed for the cost of the materials plus $10. Once you factor in the time it takes my optician to process the order (frame select, write up, fax to lab, check in, call patient, dispense), it actually cost me money. I dropped the plan and offered those patients a 20% discount plus they could bill NWB for their exam and get some money back from them. We lost most of those patients. Was I upset? At first, but then we started filling those slots with patients that either paid cash, or had a better paying plan. In the end, I saw less patients, and made more money. Another thing to understand is that according to some consulting experts, a patient will change their doctor for as little as a $10 co-pay. Meaning, if they have to pay $10 to see you, but at the OMD office down the street it's free, they will change to that office regardless of how long they have seen you. Obviously, there are patients that are very loyal, but the point is you can't count on that. My neighbor, who I play poker with every month recently requested his and his wife's records because their insurance changed and I am not a provider. MY NEIGHBOR! But, when it comes down to paying me $151 for an exam or paying a $10 co-pay for an in network provider, can I really blame them?
So what's my point? If you start out taking every insurance plan under then sun to get patients, you will have a very difficult time being profitable without having to see a ton of patients. When you want to start dropping plans once you have an established patient base, expect to lose those patients to your competitor that stays on as a provider. That's actually a good thing because he will be choked with a large influx of low-paying patients, but it doesn't guarantee you will have a large influx of better paying patients. You have to decide from the beginning what type of practice you want, and find the right place to do that. Good luck.
