How a Physical Therapist Makes Six-Figures with a Cash-Based Practice (and How You Can Do the Same as a Physician) – Interviewing Dr. Carter

Hey, doctor! You’ve been working in the hospital. You’ve been working in a private practice. You’ve been working your butt off. And right now, you’re absolutely miserable.

There is way too much paperwork and way too little reimbursements. (Especially if you’re in family medicine.) Each year, you spend more and more time doing pointless work for less and less pay. With Obamacare, it looks like the trend will keep on getting worse and worse.

Welcome to my world!

For almost two years now, I have been learning as much as I can to break out of the rat race. A race in which a doctor is the rat running on a hamster wheel, trying to get a bit of cheese tied to the end of a stick. However, he never quite makes it to the prize. That is not the life for me, which is why I’ve been learning as much as I can about starting my own business and running my own medical practice — a cash-only one.

In my educational journey to my dreams of money and leisure through medicine, I’ve met many mentors. One of my most memorable mentors is Dr. Jarod Carter. No, he is not a physician. He is a physical therapist. So why is he so special and memorable? Because he is living a life that most doctors only dream of:

a life of more freedom, more money, and less hassle … by running his own successful, cash-based practice.

At the end of the day, a cash-generating medical practice, a cash-generating physical therapy practice, a cash-generating dental practice, and cash-generating whatever other practice all have one thing in common:

a mastery of business.

And that is why a physician who hopes to bypass insurance companies must learn from not just other physicians, but also from other medical professions who have successfully mingled medicine with business.

That is why I am super excited for this article, an interview with Dr. Carter. If you are interested in a cash practice, if you are interested in making more per hour while reducing time-consuming paperwork, you better pay attention closely and learn how a physical therapist did what so many doctors could not.

Interview with Dr. Jarod Carter, PT, DPT, MTC

1. Why did you start a cash practice? Are you taking any insurance at the moment?

I’ll answer the second question first:

No, I started my practice in 2010. I have never been in network with any insurance company nor Medicare. There are a number of reasons why I started a cash practice. To name just a few:

  1. I want to have the best possible chance of keeping a nice income doing what I love, even as the inevitable and ongoing decline in reimbursements cripples insurance-based practices.
  2. I want my decisions about patient care always to be 100% about what my patients’ need, not about what services get reimbursed.
  3. I can’t stand unnecessary paperwork, and can’t stand rushing from one patient to the next every 20 minutes or less.

Medicare and Social Security have years in which the systems paid out more than they have brought in. And the baby boomer population has not even fully exited the workforce yet. When this happens, it will be mathematically impossible for these systems to survive without significant cuts to reimbursements for various health care services.

Private insurance companies have already been leading the way in reimbursement cuts, and no one could effectively argue that this situation will actually get better rather than worse over time.

For that reason, I believe that any healthcare practice relying solely on third-party reimbursement is going to have an extremely difficult time surviving in the future. We are already seen such small practices being bought up by corporations and hospitals, or simply going out of business altogether.

I can’t predict the future, but I imagine that my practice and my take-home pay will be much less influenced by the above-mentioned changes. And the way I provide care to my patients will be much more in my hands, rather than in the hands of politicians.

2. How did you first start out? What were the most important things you’ve done to make a cash practice work? Did you have a lot of money in the beginning to get it going?

I started my practice by seeing patients in their homes, because I didn’t want to take on the expense of renting clinical space. I only had a few months of living expenses in savings, so I had to keep overhead as low as possible and to start making money as fast as possible. Being a hands-on manual therapist helped in this situation because I didn’t need a large gym set up and a lot of expensive equipment to provide great care. I had a portable treatment table that I would cart around to patient’s homes and provide treatment on-site.

After a few months like this, I found a nice little office space where I could rent a treatment room and pay per session rather than a monthly lease. So if I wasn’t making money, I wasn’t spending it. Within about six months, my schedule was relatively full. And less than a year from starting my practice I was able to lease a nice small office space full-time.

Yes, I could have applied for a loan. But I wanted to see if I could get the ball rolling without going into debt. And with a few months of 12-hour days, I was able to make it happen.

In addition, if I wasn’t treating a patient, I was working on generating patients in some way. It took a lot of hustle, but it paid off very nicely.

3. How long have you been doing this for?

I finished PT school in 2005 and started my cash-based practice in early 2010.

4. How did you attract patients, especially those that can afford your services?

The answer to that question could fill an entire book. (In fact, it has!) But I’ll try to give some highlights …

When you start or convert to a cash-based practice, there’s no getting around the fact that you are moving into more of a niche market. But here’s a big misconception about your new market … it’s NOT “people with a bunch of money.” I have patients who seriously struggle financially, but will see me or send their children to me every time anyone has an injury. There are also plenty of people with a huge financial surplus who would never visit me because I don’t bill insurance.

When you start or convert to a cash-based practice (or just add cash services), your new market becomes “people who put a very high priority on functioning and performing at the highest level they possibly can, and are willing to pay more than the average person to do so.”

For the elite athlete (or their parents), that might mean being able to get that college scholarship or that Olympic medal; for a person with fibromyalgia, it might mean being able to walk up their stairs without being stopped by pain or exhaustion. Highest possible functioning/performance are obviously different for everyone.

If your treatments provide outstanding results and if you can really differentiate yourself from the insurance-based competition, income level will have less to do with who comes to your clinic than you might expect. It’s more about where they place their priorities. As I often tell those who follow me at my website, “it’s more of a mindset thing, than a bank account thing.”

So with that said, the marketing strategy for a cash-based clinic needs to be significantly different than an insurance-based one. You have to target people with the mindset described above.

For traditional physical therapy clinics, the primary focus of marketing is on developing physician referral sources, but I’ve found that as a cash-base practitioner, this approach does not yield a great return on investment. I have plenty of physicians in the area who send me their family members for treatment, but most are not large referral sources for me. It’s nothing personal. I know they really appreciate the results I get, but the vast majority of their patients have the mindset that anything to do with healthcare should be covered by insurance.

So I focus my marketing directly on the public, as well as on fitness and wellness professionals whose client base are accustomed to paying out-of-pocket for services that improve their overall health, wellness, and performance.

I use a variety of in-person and online marketing techniques to develop relationships with local personal trainers, yoga and Pilates instructors, acupuncturists, massage therapists, etc. I have spent almost no money on marketing. It’s really not necessary when there are such effective free marketing techniques available these days. Blogging, YouTube videos, and live presentations for groups of the above professionals have all been very effective in filling my schedule. Networking has also been a huge component of building my patient base. Above all, making sure my patients are spreading the word about my services has been absolutely essential to my success thus far.

Again, it took me an entire book to describe how to market a cash-based practice, and all the above approaches and techniques are explained in detail there and at my website.

5. How do you practice your services?

Like I mentioned above, I specialize in hands-on manual therapy. When patients are at my clinic, the majority of the time is spent on providing manual therapy but we always leave some time to review and progress their home exercise program. I teach them the stretches and exercises they need to be doing, and then it is their responsibility to do the exercises on their own. So my patients are never paying to do anything at my clinic that they could reproduce on their own time.

It’s frustrating when I hear about people not getting good results with physical therapy. The physical therapy they received was basically a PT (or tech or assistant) watching them as they did the exercises they’d be doing at home anyways. Sometimes, the PT or whatever provider would oversee other patients at the same time.

This is an unfortunate reality for many PT clinics out there, and much of it is driven by the fact that reimbursements are getting progressively worse. So the staff has to see increasingly more patients per day to maintain the same profits. This scenario is not limited only to the field of physical therapy either.

I spend a full hour one-on-one with each patient in every treatment session. All visits cost $150, and this is collected at the end of the hour. It is an absolute luxury as a clinician to be able to practice this way.

I get a great deal done in each session. Between the effectiveness of manual therapy and the extended one-on-one time, most of my patients need far fewer visits that if they were to go to my insurance-based competition. My patients recognize the high-value of the services I provide, and are happy to pay for it.

6. Looking back, did you have any regrets? Where there anything you would do differently?

Not really. I could say “I wish I had started earlier,” but my time in both insurance-based and cash-based practices before I started my own practice were essential in learning the things to do, as well as things to avoid, to succeed in this model.

7. Will a cash practice work for doctors? What type of practice works with this business model?

Absolutely! A quick search on Google will produce a ton of examples of physicians doing very well in cash-based practices. Currently, the majority of cash-based medical practices are primary care practices. However, we are even starting to see surgical practices moving into a cash pay model! I think that with some creativity and marketing savvy, most medical specialties can at least add some cash-pay services to their practice in order to decrease their reliance on third-party payers.

The cash-based model is still a relatively new and foreign idea for most healthcare practitioners, and I think many who could have great success in this model are limited more by their fear of the unknown than anything else. The reimbursement world is changing quickly, and not in favor of the clinician/practice owner.

Any healthcare business owner who is not making their own changes to account for this, is in for a very rude awakening when it becomes too late to make those changes. If we want to maintain the ability to provide high quality care, we need to be creative and open to new ideas.

8. Anything else you want to add?

For those interested in the cash-based business model, I recently started a podcast with a focus on interviewing healthcare practitioners who are already having success with this type of practice. Though the majority of the interviews will be with physical therapists, I will be making a concerted ongoing effort to interview as many cash-based physicians as possible.

If you have any questions, I have done quite a lot of writing on this subject at and there is a contact form at that website through which you can reach out to me directly.

That’s Not All!

After this interview, you may still be panting for more information. How did he do what he did? How did he turn his practice into a cash cow?

Well, my friend … You’re in luck. He wrote a book, My Cash-Based Practice: Essential Knowledge for Creating a Successful Private-Pay Physical Therapy Practice, that shares the exact steps and tactics he took to get his practice up and running, and full in just a mere 6 months. Incredible!

I have personally read the book and it is the best guide available about starting and running a successful cash practice. Honestly, there are not a lot of books out there that cover the topic. (That is because there are not many doctors who are brave enough go against the trend by not accepting insurance.) And there are even fewer medical practice books that

  • offer insanely high-quality information and …
  • are written by someone who has “been there and done that”

If you’re even the least bit interested in a life of medicine with more freedom, more money, and less stress, I urge you to check out the book here and learn how to start a successful cash-based practice today!

At the very least, check out the book review.

This article is part of the Money in Medicine series. Click on the link if you want all the money-making secrets available to doctors.

Speak Your Mind