Direct Pay Practice

[ItRainsItPours]

I'm only an undergrad but I was thinking that this business model would work well for a PA owned practice. This FP on SDN has his patients pay him a monthly subscription and takes no insurance. The rates are affordable, $50 a month for an adult and $10 a month for a child for unlimited visits, free procedures, and house calls. 

http://forums.studentdoctor.net/threads/are-fp-residents-familiar-w-direct-primary-care.1047025/

The benefits of this model are that your patient panel can be significantly less than a traditional insurance based practice, he claims he sees around 5 patients a day, and that it keeps your overhead low extremely low. I dont think he has an office manager or a receptionist, just his MD partner and a nurse.

I figure a PA could even approach an existing practice with this offer. Hes generating about $360,000 a year from his patients, and after his overhead takes home 200-240k. Could you as a PA ask to be an IC in a doc's office space and pay him what you would spend on an office and just have the patients pay you directly?

Apparently theres a large market for this type of practice because under the ACA small buisnesses get a break for offering crappy insurance along with this type of membership. I read on KevinMD that an internist with a similar practice has been approached by multiple small companies looking to take advantage of this.

Perhaps I am naieve and am missing something here, but this seems doable as a PA with the correct collaboration agreement.

[ventana]

if it were this easy to make $200k I think everyone would be doing it

 

Fact is it is very hard to build this type of practice and typically in large cities only (skimming the top)

 

Problem with it is that the monthly fee is not health insurance, it is only your fee and therefor the patients still have a HUGE financial exposure.  Overhead is a constant.

[rcreek]

My program has us studying quite a bit before we actually start in a couple months. In my Essentials of Family Medicine text it says a lot of positive things about these direct-pay practices, which it refers to as low-overhead practice models.

 

This textbook says about 2/3 of primary care practice revenue goes to support staff. Some providers have been able to reduce their overhead to 20% through a cash-only basis and skeleton staffing. It also describes how providers are able to spend more time with their patients, yet generate similar incomes for themselves.

 

As an example it describes a physician in Apex, NC who has a low-overhead/direct pay practice. He says he elminated the insurance middle men and has made things more efficient and transparent. The cost of services is listed up front so patients know exactly what they are going to pay (i.e. $50 for a full physical). His collection rate is almost 100%. His overhead is 24%. He takes home over $250k. He can spend up to 30 minutes or more with each patient. He does all the bloodwork, EKGs, vaccinations, and so on himself. It mentions that he even takes out the trash.

 

The catch here - this is in Apex, which is also not far from Raleigh. Why does that matter? Less than 2% of the population in Apex is under the poverty line. The median family income there is now about $90K!

 

Having personally lived in North Carolina area for some time, I can tell you that there is a large population of wealthy folks in that part of the state. I don't think this direct-pay practice model would work everywhere, like Ventana has said.

[SocialMedicine]

There are rules against providers running their own insurance program fyi. But that is not what you are getting at here.

 

In theory it works ... however people tend to pay a lot for their health insurance and as a result want to use it. Especially with insurance mandates in effect I would imagine that cuts into the direct pay clients.

 

I see a few patients who have insurances that I do not participate in ... and their insurance will NOT COVER lab work I order because of this.

 

This makes a direct fee system almost impossible if patients are going to scrutinize every lab test bill.

 

Also you will find as you move through medicine anecdotal evidence is not always accurate. I would imagine if this MD is doing everything himself  room prep, EKG, vaccine mgmt., room cleaning, lab work he is probably evaluating 2 -3 patients an hour at most. And if he had NYC rent for his practice he would already be out of business given those prices.

[EMEDPA]

have you seen this?

5 dollar office visits:

http://thefw.com/88-year-old-doctor/

 

of course he probably payed off all his overhead in 1962 or something....