Sick of the Status Quo: Doctors Test New No-Insurance Models

San Antonio Express-News article 4/25/2012

No Insurance Healthcare Models
Primary care physician Dr. John Rodriguez with Healthcare2U examines new patient, Natalie Grubb, a hairstylist with no insurance who “jumped at the chance” to sign up for care when she heard how the new plan works.

Tuesday, April 17, 2012. Rodriguez is trying to build a new business model where patients pay $25 per month plus a $10 co-pay per visit, which includes an annual physical exam.

Norris and Rodriguez are part of a small but expanding segment of primary-care physicians who have ditched health insurance for a “direct pay” model because of what they consider to be an expensive and bloated bureaucracy that drives financial reimbursements.

“Obviously, doctors are very frustrated,” Rodriguez says. “I’m really trying to create a different model.”

About a dozen Bexar County physicians specializing in internal or family medicine accept only “self-pay patients,” according to the Bexar County Medical Society. That’s less than 3 percent of members who are primary-care doctors.

In addition to being worn out from wrestling to get insurance reimbursements, primary- care doctors complain about having to see so many patients a day — as many as 30 — because reimbursements are based on those “encounters.”

The typical primary-care physician treats about 3,000 patients.

“There is a high sense of frustration and burn-out in having to see so many people a day,” Norris says.

San Antonio physician Mark Thornton calls that system “internal medicine on roller skates.” About 10 years ago, he started charging a retainer so he could cap the number of patients he sees.

Thornton, whose practice bears his name, was one of the first physicians locally to adopt what many call “concierge medicine.” But unlike some of the recent adopters, he continues to accept some insurance.

While Norris, Rodriguez and others have recently gravitated to the direct pay model, they have devised vastly different blueprints for executing their business plans.

Norris intends to cap how many patients she sees at 750 to give each more time and attention. They’ll pay a monthly access fee of $49.

Rodriguez, meanwhile, will charge patients $25 a month, plus $10 for each visit, hopefully to attract people who can’t afford health care.

San Antonio’s Health by Design, known for giving extensive annual physical exams to executives, now wants to treat those execs year-round. It will charge them $100 to $200 a month for the service and cap the number of patients per physician at fewer than 200.


A growing trend

To be sure, the number of primary-care doctors who operate under the direct pay model remains relatively small. Data are hard to find, and most information is anecdotal.

Statewide, the Texas Medical Association reports 9 percent of all physicians don’t have contracts with health insurers. But that includes doctors in specialties, such as plastic surgery and psychiatry, which generally do not accept insurance.

Nationally, the American Academy of Private Physicians estimates 1,100 primary-care physicians don’t accept insurance, double the number of five years ago. It anticipates the rate of growth will accelerate.

“Physicians are reaching the tipping point on their business models, particularly in primary care,” says Tom Blue, executive director of AAPP. “They just can’t make ends meet. They’re being forced to make decisions about changing their revenue models.”

Low overhead = profits

Norris doesn’t want to be on a treadmill of seeing 30 or so patients a day. At her new Stone Oak practice, she will treat only 12 a day — spending at least 30 minutes, and as much as an hour, with each one.

Norris’ Integrative Family Medicine charges patients either a membership fee or a fee for each service. The monthly adult membership fee includes an annual physical and common lab tests and screenings. Follow-up visits cost $20 each, which includes common lab tests.

By refusing insurance, as well as Medicaid and Medicare, Norris says she doesn’t have to hire staff to handle medical billing, coding and collection to get reimbursed by insurers. Her only employee is a licensed vocational nurse who doubles as the receptionist.

“If you keep your overhead low, then you’re able to be profitable,” she says.

Norris’ desire to spend more time with her patients ultimately led her to North Carolina-based Physician Care Direct (PCD), a North Carolina company that is direct pay to doctors.

For every adult membership fee it collects, Norris says Integrative Family Medicine pays $4 to PCD, which provides payment management for both patients and employers.

Billing, coding and collection drive up medical costs but add no value to the doctor-patient relationship, says Dr. William “B.J.” Lawson, PCD’s CEO and a founder. A primary-care doctor who can spend more time with patients can educate them on living a better life and provide accountability and follow-up, he says.

“That’s how you actually get folks to change behaviors and adopt healthy lifestyles, and bend the cost curves away from the chronic diseases that are killing us,” Lawson says.


Care for uninsured

Where Norris wants to scale back the number of patients she sees, Rodriguez wants to see more.

For those who don’t have insurance and can’t afford expensive monthly fees charged by most concierge practices, Rodriguez thinks he has an answer at Business Healthcare Solutions in Stone Oak.

The monthly fee he charges includes an annual physical exam, most lab work, vaccines, and same-day service in most cases. But he expects a lot of the health care he will provide patients will be dispensed over the phone.

Plus, Rodriguez “saves the money he doesn’t have to spend trying to collect from insurance companies, which some estimates say are darn near a third of the overhead of the practice,” says Blue of AAPP, the private physicians group.

Rodriguez has about 500 patients and needs to get to 1,500 to break even, he says. His goal is to attract 10,000 patients and open five additional clinics. He’s already finding patients through Craigslist and launching a billboard advertising campaign, he says.

He’d also like to expand the concept to Austin, Houston and Dallas.

“It’s a crazy idea, but I’ve run the numbers in my head,” he says. “If I have 3,000 patients paying me 25 bucks, can I offer them quality care, affordable care and better care than what they are getting now? Absolutely. I’m convinced. I wouldn’t do this if I didn’t really do my due diligence.”


Year-round for execs

San Antonio’s Health by Design, meanwhile, is expanding into concierge medicine at the urging of some of its patients. The company specializes in giving executives annual physicals, paid for by their employers. It’s already treating some but expects to expand this summer, says Dr. James W. Ogletree, CEO and medical director.

“Sometimes they have issues like (high) blood pressure, cholesterol or whatever that needs to be followed,” Ogletree says.

Health by Design expects to charge a $100 to $200 monthly retainer and cap the number of patients per physician at fewer than 200, Ogletree says. While most, if not all, of those patients will have health insurance, the practice won’t accept it.

Working outside the insurance system will allow doctors to give “adequate time and attention” to patients, Ogletree says.


Traditional concierge

While recent adopters of the direct-pay model accept only cash, Thornton, who has had a concierge practice for almost 10 years, accepts some insurance. But he says less than 10 percent of his income comes from insurance reimbursements.

Most of his income comes from the $1,750-a-year “management fee” ($1,550 for spouses) that he charges patients. He’s heard it described as the Costco model.

“Costco doesn’t make any money on what they sell you,” he says. “Where they make their money is in the membership fee.”

For the annual fee, patients get round-the-clock access and sometimes even house calls.

Ogletree adds, “People think it’s about the money, but it’s really about control and being more in control of your life and your practice of medicine.”

Today, Thornton says on a busy day he’ll see 10 to 12 patients. He has capped his patient load at 600.

“A lot of people see that primary care is broken, and this is one alternative to it,” he says. “It’s made me love being a doctor again.”

Correction: Dr. Simone Norris’ practice is called Integrative Family Medicine. An information box with a story on Sunday’s page A1 of the Express-News and on had the wrong name.

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