The following is an article published in MedPageToday.com. It is written by Dr. Ryan Neuhofel (aka Dr. Neu [@NeuCare on Twitter]). He is a Direct Primary Care Physician in Kansas. His and his patients’ experience with this new model of care are exactly the same as ours here in Maine. Not in spite of, but BECAUSE OF the fact that we don’t deal with insurance companies, we are able to provide better care at far less cost.
Michael A. Ciampi, M.D.
Doctors get asked many difficult questions — “Did the biopsy show cancer?,” “Will I ever get better?” But, perhaps the scariest question a doctor can be asked is “How much is that going to cost me, doc?”
Throughout my medical education, the only real consideration of costs I witnessed was occasionally asking a patient, “Do you have good insurance coverage?” Financial issues may have been discussed with non-clinical office staff, but rarely were considered by providers with or without a patient present.
No matter how medically appropriate, many doctors’ recommendations go unfulfilled due to patient financial issues. Patients are not capable of answering, “Do I really need to have this test right now? or would it be okay to wait?” and if needed, “Is there a less expensive option that may also be appropriate?” Nobody is better equipped to answer these questions than physicians.
A physician’s day is busy. We are considering the most appropriate medication, checking boxes in our EMRs, and educating patients on the importance of checking home blood sugars. Given the lack of transparency and our lack of knowledge about prices, it seems impossible to also help patients navigate the murky nature of out-of-pocket costs.
As a resident, about 50% of my clinic time was spent working with uninsured patients at a safety-net clinic. That was my crash course in health care costs. Most patients were “self pay” (a term I now despise!) for anything I ordered or prescribed.
In training, I also started to become more aware of insured patients’ costs as well. I quickly realized that just having a plastic card in your pocket does not lead to affordable costs or fair prices. I tried my best to help patients avoid surprise medical bills, but it was often an exercise in futility. I often felt helpless in answering my patients’ questions about costs of even basic stuff that was provided by my clinic and hospital system.
Wanting to provide my patients with more transparency, I started a Direct Primary Care practice shortly after finishing residency in 2011. My business plan and pricing structure had a radical mission: Make things affordable and tell patients what stuff costs.
By limiting overhead costs — which is pretty easy when you aren’t dealing with insurance hassles — I could make basic primary care services, including communications, clinic visits, point-of-care tests, and labs and office procedures very affordable if bundled in a simple monthly membership fee ($30 for kids, $50 for adults and $70 for seniors for unlimited amounts of service; with big discount for families).
Many of the patients who joined my practice were uninsured or carrying high-deductible insurance plans — not the “concierge” crowd that many of my colleagues predicted. In order to serve their needs, we worked hard to provide affordable ancillary services to these patients.
Many patients’ big expenses, with or without insurance, were with ancillary services such as diagnostic testing and medications. That would be a tougher challenge, I presumed.
Being fully membership fee supported — without a need to profit from any ancillary services — we have been able to provide our patients labs and medications “at cost” of contracted rate. I was initially skeptical we could do that for things beyond basics, but the actual costs of most outpatient services are often astoundingly low compared to what I remembered hearing throughout my training.
With our lab contracts, we found an average of 50%-90% savings versus insurance-based prices and 80%-95% versus “self-pay” prices (if a patient gets billed directly by the lab). In fact, we purchased basic labs (lipid panel, hemoglobin A1c, TSH, metabolic panels, blood counts) so cheaply we decided to provide them at zero cost to our members; along with most point-of-care tests we perform (dipstick UA, EKG, urine pregnancy, rapid Strep). We routinely save insured patients $100’s per year on labs monitoring common chronic conditions.
For diagnostic imaging, we have developed a local network of facilities with cash-friendly prices. It may seem unreasonable for patients to pay directly for things like CTs and MRIs, but we have found steep discounts for most things (i.e., $150 for ultrasound, $450 for MRI). We subcontract x-ray technical service with a local orthopedic group for $25-$35 per series and I don’t charge patients for my interpretation — not bad, considering our local hospitals charge $100-$300 for x-rays.
Ironically, even our patients with “good” insurance often spend less out-of-pocket on ancillary services with us by “paying cash.”
We recently had a patient with a high-deductible insurance plan break her wrist after falling from a truck. The sum total of her ancillary fees for the event with us was $70; including $25 for x-ray series, $15 for radiologist over-read (as I was uncertain about a carpal bone involvement), $10 for a splint, $20 for a cast a few days later. Her husband had a nearly identical fracture last year that cost them $2400 with the same insurance plan (namely for an unneeded ER visit because primary care didn’t have time for a visit the same day).
Even excellent primary care has its limits, so our patients do need to use their insurance when we can’t provide a needed service. This is still a tricky task for our patients, but thankfully, more organizations are taking up the cause of promoting transparency at all levels. Finding a baseline “fair” price for a given service is becoming easier with online tools. Recently a partnership between MedPage Today and ClearHealthCosts.com has started another transparency project to help tackle the issue.
Many of my skeptical colleagues continue to ask, “How can your patients afford to pay cash for _____________?”, or make statements such as, “My patients couldn’t afford concierge medicine.” Trying to be diplomatic, I explain the distinction between “concierge” fees (which are on top of insurance-based fee for service charges) versus DPC membership fees (which cover actual care), but often want to ask them, “How do your patients afford to continue with the traditional model?”
W. Ryan Neuhofel, DO, MPH, is the owner of NeuCare Family Medicine in Lawrence, KS. He spoke about his experiences with Direct Primary Care at a recent Direct Primary Care Summit, and will be doing so again at the AAFP National Conference of Family Medicine Resident and Medical Students and the AAFP FMX(assembly).