Ways to Pump Up Your Bottom Line (Despite Healthcare Reform)

Leigh Page


October 25, 2012

In This Article

5. Become a Direct Primary Care Practice

If you're concerned about oppressive coverage regulations under the ACA, you might be interested in dropping third-party payers and starting a cash-only practice. The arrangement is less complicated than billing insurers and may help forge closer relations with your patients, according to physicians who have taken this route.

Direct primary care practices charge a monthly fee that covers only their own services. Patients make their own arrangements for hospital and other healthcare services. Direct practices may offer some simple procedures and arrange discounts for laboratory tests or imaging. Charges are lower than for "concierge care," which offer special perks and more personalized treatment.

Karen Josephson, MD, a geriatrician in Long Beach, California, runs a solo direct primary care practice. When she teaches internal medicine residents in a geriatrics rotation, the residents first ask her, "Is it legal?" (the answer is "yes"), and then tell her, "You're the first happy doctor we've had."

What You Need to Convince Your Patients

To make direct primary care work, however, you need to convince about 10%-20% of your existing patients to pay you out of pocket, according to Lester M. Baskin, MD, a Portland, Oregon, internist who runs a direct primary care practice with his physician-wife. To start the practice, he made a lot of cold marketing calls to patients and spoke to many community groups. "I view myself as an entrepreneur," he says. "I have to get people's attention." Dr. Baskin now offers his services to employee groups, which he thinks will become a big part of his practice in the future.

Dr. Baskin charges $50-$60 a month for basic primary care services. Dr. Josephson, who spends more time with her elderly patients, charges $2000 a year for office visits and $4000-$5000 a year for a home visit plan, depending on the distance.

Because Dr. Josephson rents space from another doctor and has no employees, she has a very low overhead. She does her own billing and has very few problems with nonpayment. She says she is making more money in direct practice than she did in the large group practice where she previously worked.

Dr. Baskin spends a lot of time advising patients over the phone and by email. He says this is more efficient than making the patient come in for an appointment, but because e-visits are usually not reimbursed by traditional insurance, it would be difficult for a regular practice to do this. He says he does as much as he can for his patients without referring them to specialists. This means performing such procedures as a mole punch biopsy, which other generalists might send to a dermatologist.

Patients are expected to take out high-deductible policies to cover hospital and other services, but Dr. Baskin says some of his patients don't have any health insurance. He wants to persuade insurers to offer "wraparound" policies that would be limited to non-primary care services. He thinks payers would be interested in this because "the big costs for a health plan are specialty care and hospital services, not primary care," he says.