From Insurance to Independence

The road to being insurance free can be difficult and challenging, but having faith in your practice’s values can make it easier.
Photo Credit: Dr. Elizondo

I bought my practice, Westlake Hills Vision Center, in 2019. Between existing circumstances from the previous owner and my own personal experiences during that time, my attitude about accepting insurance plans changed drastically in a short amount of time. 

Breaking Down the Costs
The first week I was open, my biller quit. I was forced to learn how to file insurance for medical and vision plans and post the payments. I realized quickly how difficult it was to get paid if a copay is missed and you don’t manage to collect payment up front. Getting the correct medical insurance benefits to collect the correct copay often took an hour when the online benefits were ambiguous. 

This process was both time consuming and frustrating, and it was often not worth the headaches as I also realized that the revenue from a vision exam didn’t cover my staff time, let alone the full chair cost. I was often still in the negative on my time cost even if patients bought products. 

On top of that, I had inherited a unique hurdle from the previous owner. He had advertised on his website that he waived new patient copays. This meant that when patients came in the next year, they forgot about the promotion and just remembered that they didn’t pay. I was forced to have many uncomfortable conversations with patients who were angry about now having a copay. 

Considering Going Insurance Free
After taking three months off following the birth of my son, I was sleep deprived and fed up with doing insurance billing at home. My time outside the office was worth exponentially more to me after the birth of my son, and that shaped a lot of my decision making.  

I called my IDOC advisor and said I want to drop insurance. When I bought the practice, the patient base was at 1,300, and it dropped 30% when I took over. My advisor politely recommended not dropping any of the insurance plans I contracted with due to the small size of my practice. Insurance was a headache and my bane. When I first opened my practice and contracted with insurance, I had six major medical insurances, Superior, EyeMed, and VSP. I was determined to drop at least one. We looked at the percentage of patients who came from each insurance company and what percentage they contributed to revenue. Superior was only 3% of my patient base and slightly less of my revenue. It also had the lowest collections per exam.

Against recommendations, I dropped Superior in October of 2020. The next year, our revenue was up around 11%. There were no negative effects from this decision, so in August of 2021, we dropped EyeMed.  

Making the Leap
In October of 2021, I dropped all medical insurance plans. The decision didn’t affect our revenue, freed up time wasted calling insurance companies, and weeded out patients who weren’t interested in buying glasses. It also freed up more chair time for patients who really bought into our practice model. After dropping medical insurance, Superior, and EyeMed, we optimized our patient experience, our sales process, and the aesthetic of our practice.  

At that point, VSP was the only insurance plan we still accepted, and the decision to keep it or drop it was one that kept me up at night. After dropping six medical plans and two vision plans, our patient base went from 1,300 to 632. However, our revenue was 40% higher than the year we saw 1,300 patients. While it took a lot of courage and multiple attempts, I finally cancelled VSP as of January 1, 2024.

Reading the book The Pumpkin Plan by Mike Michalowicz helped me make the final decision to leave. The book is all about a simple strategy to achieve business success, and it summed up exactly what I was trying to do in my office. I wanted to put more energy and effort into clients who valued me and my practice model and cull those who didn’t. I realized that only a small percentage of VSP patients were my ideal clientele. 

A Look at the Numbers Now
When I dropped VSP, my patient base was only 632 patients. A majority of my patients (65%) utilized VSP, and they made up 37% of my revenue. My topline revenue has gone down about 20% since dropping, and I made the decision knowing that if I lost all of that revenue, we would go under. It was scary, but history told me it would be okay.

For any practitioners considering doing the same, I would highly recommend having a three-to-six-month cash cushion to fall back on. I had to loan the business a small amount of money, as predicting cash flow the first year without any insurance plans was a significant challenge.  

Overall, our patient base is down about 35%, but our collections per patient are up. The only months we didn’t break even were also months we didn’t break even with insurance the year prior.

Though this year has been full of unknowns, I feel less stressed than I ever have. Now, when problems arise, they are easier to deal with because I know that our patients chose us, trust us, and are willing to work with us.  

Author
  • Susan Elizondo, OD, MS

    Dr. Susan Elizondo earned her bachelor's in genetics at Texas A&M University, which kick-started her love for Lindy Hop, a dance style. Her academic journey led her to a Master of Science in Molecular and Cellular Biology in Rochester, New York, where she also discovered her love for traveling and teaching in South America. She attended optometry school in New York City and had an externship in China. Dr. Elizondo became an active Central Texas Optometric Society member, holding every office from Social Chair to President. In 2019, she took the leap into business ownership by acquiring Westlake Hills Vision Center. Dr. Elizondo's favorite part of being an optometrist is talking and getting to know patients. She has also fallen in love with the practice management side of things and lives by the motto of Constant And Never Ending Improvement.

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