Cash-only practice

Cash-only practice overview

A cash-only practice is a patient self-pay model where dermatologic services are provided without billing insurance. Patients pay directly at the time of service, streamlining practice operations and enhancing autonomy for the physician. Similarly, a concierge practice is one where the patient pays an annual membership fee.

Why dermatologists choose this

• Frustration with third-party payers and denied claims.

• Reduced administrative complexity and fewer billing disputes.

• More time per patient and deeper clinical relationships.

• Better work-life balance and less burnout.

• Flexibility to control pricing, schedule, and clinical decisions.

How this model works

Employment and structure

Dermatologists may work independently or as part of a practice that operates on a direct-pay basis. Ownership models vary from solo practitioners to group practices.

Patient care model

Patients pay upfront using cash, credit, HSA, or FSA accounts. Services typically include initial visits, follow-ups, and minor procedures, with transparent pricing often tied to Medicare benchmarks.

Administrative support

Since insurance billing is not involved, administrative tasks focus on upfront payment collection and patient education on cost-saving resources for prescriptions and labs.

Compensation and incentives

Physicians are generally compensated through direct patient payments, often resulting in simpler revenue cycles and potentially higher profit margins without insurance overhead.

Technology and operations

Cash-based practices often use EHRs and scheduling tools optimized for efficiency and patient communication rather than for billing compliance. Many adopt point-of-sale systems, automated booking, and digital intake forms. Without payer requirements, documentation can be streamlined. Online presence and social media marketing are essential for patient acquisition and visibility.

Career growth

Opportunities may include expanding the patient base through concierge offerings, developing specialized services, or integrating teledermatology to increase access and efficiency.

When this model makes sense

• For mid-to-late career dermatologists with a strong patient following.

• In regions with high-deductible health plans or gaps in dermatologic access.

• When a dermatologist values autonomy and direct relationships over volume.

• For physicians interested in reducing overhead and administrative costs.

Success factors

• Build trust and loyalty, because long-term patients are more likely to transition with you.

• Be transparent with pricing by publishing fees and explaining costs clearly.

• Provide unique value through faster access, longer visits, and direct physician care.

• Understand your market and then align services and pricing with your community’s needs.

• A lean, well-communicated model creates efficiency and clarity.

Potential challenges

• Hard to launch straight out of residency without a patient base or reputation.

• May lose some patients who rely heavily on insurance.

• Out-of-pocket expenses for labs or prescriptions can be a barrier.

• Physicians must document care refusals carefully if cost deters patient compliance.

Real-world example

Madhavi Kandula, MD, FAAD, transitioned to a cash-only dermatology practice in 2016 after years of frustration with insurance processes. While the shift initially reduced her patient volume, she quickly attracted new patients who appreciated timely access, transparent pricing, and personalized care. Her practice is now one of the highest-rated in the St. Louis region. She enjoys a four-day workweek, low administrative stress, and strong patient relationships.

Early career advice

• Begin in a traditional setting to develop your reputation and rapport.

• Use early years to understand patient expectations and needs.

• Consider a hybrid model before fully transitioning.

• Think strategically about pricing and communication.

• Deliver consistent, high-touch care that sets your practice apart.

Related AAD resources

• Practice types: See our full menu of resources on practice types, from solo to institutional.

• Get started: Access our guide to getting started in practice, with resources on practice types and policies and procedures.

• Employment guide: See all our resources on contracts, questions for employers, and more.

This content was created with the particular needs of early-career dermatologists in mind. See the rest of our Career Launch resources for young physicians.