Tea Nguyen, DPM (00:53.998)

Dr. Tea, do you think going 100 % direct care is the way to go or start as a hybrid? I got this message from a doctor and I know it might be on your mind, so I'm going to give you some food for thought on this episode. The backstory for me was that I started my practice with insurance because I didn't have an option, basically. Nobody really told me not taking insurance was a thing. There was no model for me to follow.

When I opened my practice in 2018, I had my daughter in June, started hiring in July, saw patients in August, and I was taking all of the insurances because that's what everybody told me to do. And I was already familiar with the structure because I came from an employed position that took all insurances. And so kind of just did a copy and paste with a little twist of my own. And so I can see the benefit of thinking about starting your practice with insurance because that is how people will get to know you. That's how people got to know me because I funneled through my referral patterns when I opened my practice and told them, yeah, I take your insurance. And at the time, a lot of the practices were asking, well, as long as you take this insurance, then we'll consider it. And I thought I was being a hero by taking everything because at the time I just needed people to come in, be a patient and build my reputation.

However, the disadvantage of starting your insurance-based model with the intention of opting out eventually down the road into a direct care practice is what I went through a few years later when I started to drop one insurance at a time. And it was this, it's realizing that these are two very different models with very different expectations from the types of people who are choosing one model over the other.

Basically, you're restarting your business practice over again in some regards if you're going to take insurance and then drop it and then restart it with the direct care practice because they're just different buyers for those two types of services. In my experience and experiences that other doctors have shared with me, they did experience a dip in revenue when they started to drop insurances. So how do you protect yourself from that financial loss?

Tea Nguyen, DPM (03:14.478)

Two things happen simultaneously. One, when you drop insurance, you drop expenses. So it's really not that bad initially. But also number two, those people who chose you with their insurance are not going to choose you anymore and that's okay. So you have to build up either with new cashflow avenues, new service lines, or being patient with yourself and build up so that you have a solid marketing plan, solid packaging prices, and you can plan for a more abundant future. So there was an advantage to starting your practice with insurance because your referral line is just easier. People know about you. There's no friction as to how patients are going to pay. It's a simple button for the referring practice to send or fax referral notes to you. So yes, it's easier, relatively speaking.

So if you feel like in your specialty, you get paid good enough and you can still make a healthy margin, you might want to consider that pathway as an option, but it's going to cost you more. And if you drop insurance, you're going to restart your practice business model over again. So let me go into the nuances of if you are going to go into direct care at 100%, here are some conditions where it would work. The first condition is you're willing to learn how to market, how to sell, and you've got basic operation systems down. When these three things are covered, then yes, you can definitely start your practice with direct care. You can be coming from employment, maybe you've lost a job or you voluntarily terminated your contract, or you've built a practice where it was predominantly insurance-based and you're selling it and you want to start a new practice with direct care. If you're scrappy and you've always been, then this becomes a new fun project for you that you can get really excited about. So that is the first condition where going 100 % into direct care works. The second condition is if you are somebody who's not strapped for money and you're willing to give your business the time and attention it needs to grow, think of this as raising a baby. You need the bandwidth to be able to sort some of the logistics out, test it and refine it.

Tea Nguyen, DPM (05:33.718)

And so now you're growing it organically. That is the second condition where a direct care practice would work. You're not pressed to make money right away. You've given yourself time. Maybe you've had savings or you have a backup plan, a financial runway for you to play around in this business model. And I don't want to say play around like this is a light thing to invest in, but you have bandwidth to make real decisions that aren't panic decisions.

And sometimes doctors are in a financial crunch and they make rash decisions because of fear. They're under price, they're worried about not having enough patients. They buy fancy gadgets in which they don't have a plan to sell or a system to sell it for them. Those are all things to consider. But when you are in a position where you have time, you feel some safety, you're not panicking, then you can make reasonable, sound decisions for your business that are safe and sustainable. And the third condition is, which I don't see as often, but it might be available for you, is if you're going to buy a direct care practice, it's already established, it's got systems and equipment in place, and it's got a mentor, a built-in mentor or the old practice owner who's willing to bring you into this model and teach you a few things. Those systems are already set up to have qualified patients

It has a great offer that's working and you know how to sell them. This is what they call a turnkey situation. It's rare, but it is possible. So a lot of us are often in dire situations where we lose our job for one reason or another. We move, life circumstances happens. We didn't have a choice, but to learn direct care on the fly. And that's the category I sit in. But now you have this podcast.

and you've got a whole community to help you bear these business burdens. There is really no situation in your business that is entirely unique that could not be solved. There is somebody out there somewhere who can help you with that. So here's my humble opinion about hybrid practices where you take some insurances and you offer cash services in other instances. My approach, if I were to start my practice over again,

Tea Nguyen, DPM (07:56.334)

I would have chosen to have a direct care practice so that I would have better control of my finances and learn what I needed to learn, which is marketing and selling better. I didn't have those skillsets in the beginning, so I don't know if I would have been as successful if I left my fellowship and opened a direct care practice. That's a personality thing. That's a me thing, right? You are an individual and you know your own skillset and your abilities. So don't let my path be your only path.

It can be a guiding light. can give you, this is a possibility. But I know a lot of doctors who left residency training, left fellowship and just opened a direct care practice. They're in different specialties and we can all learn a little something from those individuals. The reason why I started to opt out of insurance was a few reasons. It wasn't just the financial expense of running an insurance based practice, but there was a moral misalignment. The hybrid situation kind of trapped me in a brand that I didn't really want to associate with. What do I mean by that? If I was the doctor who took insurance and people refer to me because the assumption is she'll bill insurance, but then the services I provided was not covered by insurance, I feel like that would just be more stress for me to have more of those conversations over and over again than I would like. So I didn't want to be the person who took insurance.

That was not my business model. My business model was I offered things that other doctors aren't doing, don't wanna do, and that I enjoy. That really helps people. So when people hear my name, I want them to automatically know that I do something different and it's gonna require you to pay an admission ticket. It's gonna require you paying out of pocket. So for me, that was very important. I don't like to play in the gray zone. I don't like to play a guessing game.

I don't want to know if something that I'm offering is legally allowed or not. For example, if I have a patient right in front of me, but I take their insurance contracts and now I'm offering a service that I don't know if it's covered by insurance or not. If I charge that patient cash for something that is actually billable to insurance, even in good faith, the patient says they wanted to pay out of pocket, they don't want to use their insurance. I might be doing something totally illegal without knowing.

Tea Nguyen, DPM (10:21.934)

If I'm billing the patient cash for a service that suddenly one day insurance decided it's now a covered treatment, but I didn't know of those changes, I'm in trouble, not the patient. And there are many different instances where a hybrid can put you in a sticky situation where you truly need to be fully aware of these ongoing changes that are unpredictable and are just administrative burdens that don't have a lot to do with patient care. So for me, I don't want to break laws.

I don't want to break contracts. I don't want to be in situations that I could have avoided. So I like to say that insurance is my salty X. I don't want to talk about him. I don't want to deal with him. I don't want to learn anything more about it. We've broken up. It's over. It's done with. So that's why I opted out of insurance. I wanted a clean cut. I needed to learn what I needed to learn. And it was kind of hard to do that in a hybrid situation while juggling all of the low leverage tasks, the unbillable tasks of doing what the billing codes are, the global period after providing a surgery or a procedure. Those are nuances that I don't want to live in my brain anymore because it's not related to patient care. I just want to take care of the patient and I want to be able to pay my bills. So that's why I don't love living in a hybrid situation. I thought I could, I thought I could for a moment. 

The last insurance that I did stay with was an open plan. It was a PPO plan. It's considered a really generous plan out here but I just didn't want to deal with it anymore. I'm kind of an easy gal trying to de-stress my life here. And so that's my point of view on how I feel about hybrids. That doesn't mean you can't do that though. Some practices thrive on a hybrid practice where they take a few or maybe just one insurance and the rest of what they do is cash. You can decide for yourself if that's going to be a good fit for you, which is why I'll also make a clear disclaimer that if you're choosing to have a hybrid practice, and you have questions about billing, about what you can do and what you can't do, I'm not the right person for those conversations because again, my salty ex, I want nothing to do with him. So I hope that I made that very clear. So if you don't wanna mix up your brand, you wanna have a clear structure that is simple and scalable, direct care is the answer. There's a little bit of a startup period in the beginning, learning how to sell, learning how to market, and when you're small, you're able to tweak things.

Tea Nguyen, DPM (12:47.374)

without a major impact. When you scale something that's chaotic, you've just also scaled the chaos. So that's a consideration to think about in your business future. I like my business to be simple. I want it to be enjoyable and I want to clock out when I'm done. It's pretty simple. And not taking insurance has given me that. I'm really okay if I'm not for everybody. And I actually prefer that because my time and my mental bandwidth has becoming more and more limited the older I get.

I want to be available to people who value me. I want to clock out when my work is done so that I can clock into my hobbies or sleep or take a trip or get a massage at a random hour of the day. If a girlfriend calls me and says, want to hang out? I want to be able to say yes. Direct care has allowed me to enjoy each and every day instead of having to grind until retirement age. I don't want to wait anymore. So knowing what I know now, would I ever do this again. Would I ever start a practice taking insurance and then pivoting out into a direct care practice? I think it would be hard to say. I think I needed to hate it enough to have that contrast to realize I never want to go back to it again, to really love direct care the way that I do today. But as they say, hindsight is 20-20. You never really know unless you go through the experience yourself.

And at the end of the day, do what feels right for you in the moment that you feel is appropriate for you, that feels aligned, and you will learn what you need to learn through life experiences. I'm curious to know where you are in your practice and what's working for you. Do you have a hybrid? Do you intend on opening insurance and then pivoting out into direct care? Or are you all cash? Are you just a direct care practice? Join me over in the Facebook private group, the Direct Care Society. That's where other direct care doctors and Direct Care Doctor allies are. And it's also where I announced the next training sessions to help you become the owner of a wildly successful Direct Care practice. I'll see you there. Take care.