Physicians Practice - July/August 2008 - (Page 59)

IDEALAB CASH-ONLY HEALTHCARE STILL WORKS MY LOW-COST, NO-INSURANCE PRACTICE IS RIGHT FOR ME AND MY PATIENTS B Y B R I A N F O R R E S T, M D I’m often asked how I can afford to keep charges so low at my primarycare practice. The answer is simple. Only the administration of primary care is expensive, not its provision, so I keep charges low — for example, I can take care of a chronically ill, hypertensive, hyperlipidemic, diabetic patient for $25 per month and $20 per visit — by refusing to average for the state, but hardly wealthy.) I thought it would be useful to tell you how things have been going in the last 14 months. One fast-growing aspect of my practice is the “Access Card” discount plan. The idea is simple: Patients pay $300 a year for a card and $20 per ofﬁce visit, which includes labs and any in-ofﬁce testing. This means that NEW MODEL The idea is simple: Patients pay $300 a year and $20 per office visit, including most labs and any in-office testing. a typical patient who comes in for a complete physical, four follow-up ofﬁce visits with lab work, and a sickvisit will spend $420 for a year’s worth of primary care. Compare that to the average $700 that Americans are spending yearly just for health insurance premiums ($3,300 per family), which does not include copays, deductibles, or employers’ contributions. Something does not add up. Primary care is the most cost-effective way to keep people healthy, yet most healthcare dollars do not go to the average primary-care physician. Many physicians are skeptical of my Access Card program. They say, “Don’t you lose money on that?” On the contrary, I do quite nicely. Consider a typical primary-care physician with a modest panel of 2,000 patients. Now suppose each of those patients paid $300 a year deal with healthcare’s primary creators of administrative costs: insurance companies. My overhead is low, so my services are cheap, which makes it possible for middle- and low-income families (including some who are insured, and others who are not) to afford me. You might remember me from the June 2007 issue of Physicians Practice, when I ﬁrst told you about my practice, Access Healthcare in Apex, N.C. (Read the original article by typing “Cash and Carry” in the Search Articles box at www.PhysiciansPractice.com.) I still get a lot of questions about how it’s possible for me to run a cash-only practice in a middle-class town. (Apex is a suburb of Raleigh, where median household income is about $71,000 and median home value is $208,000; those ﬁgures are aboveWWW.PHYSICIANSPRACTICE.COM for the physician’s services. That comes to $600,000 a year in revenue before the ﬁrst ofﬁce visit is made. If your overhead is low (like mine, at 25 percent), you would clear $450,000 per year. That’s a lot more money than the average primary-care physician makes. Our overhead is exceptionally low because we do not ﬁle insurance and only have one staff person for every two providers. But even if your overhead is 60 percent, you would still make $240,000 per year if you had 2,000 patients each paying you $300 a year. We accomplish this with no billing, no accounts receivable, and it only costs our patients $25 per month, a real deal in terms of outof-pocket healthcare expenses. You might be thinking that only uninsured patients would come to see me, to gain access to affordable primary care. Why, you might ask, would insured patients pay me $300 on top of their own insurance premiums? In fact, about 42 percent of my patients have traditional insurance through their employers; another 10 percent are on Medicare. They see me anyway, because my $20 per visit fee is slightly less than their in-network copay, and it often includes lab tests that their copay does not cover, so they still save money. About 30 percent of my patients are uninsured. Another 15 percent don’t have conventional insurance but have heeded my advice to purchase high-deductible, low-premium plans with health savings accounts to cover any unforeseen hospitalizations or catastrophic costs. What they save in premiums with this type of insurance plan generally more than makes up for their Access Card fee, and they JULY/AUGUST 2008 | PHYSICIANS PRACTICE | 59 http://www.PhysiciansPractice.com http://WWW.PHYSICIANSPRACTICE.COM

Table of Contents Feed for the Digital Edition of Physicians Practice - July/August 2008

Physicians Practice - July/August 2008 Contents The Bigger Picture: Battle Royale in the EMR Market Letters Physicians Practice Pearls: Hire Right Noteworthy Cover Story: Healthcare Reform: Voting for Change Patient Relations: Dealing with Problem Patients The tech Doctor: Is Self-Service Medicine Inevitable? Technology: Do EMRs Make You a Better Doctor? The Guide Idealab: Cash-Only Care Still Works The Administrators Desk: Who’s in Charge? Ask The Experts What Went Wrong: ‘Why Our Great Idea Didn’t Work’ Coding Start It Up: How to Launch a Practice: Operations Partnership: Don't Let Partner Conflict Destroy Your Practice Appraisals: What’s Your Practice Worth? Getting Advice: How to Hire a Consultant Classifieds Advertiser Index

Physicians Practice - July/August 2008

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