The magic bullet? This family physician takes no insurance nor Medicare and charges a flat fee of $45 per visit.
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{ 4 comments }
Interesting. The only catch I could really see is that he owns his own building, which strikes me as a very sensible catch.
I wish psychologists could run things this way. Trouble is, a therapy hour is a therapy hour is a therapy hour. There’s no averaging of 5-minute consults with 50-minute consults. They’re all 50, or 45, minutes.
Still, the no-insurance, pay-as-you-go model may be pretty good even for psychologists if you just look at what your overhead is and carefully calculate it out from there. As this MD has done.
Nice job! Good for him. Of note, his overhead is so, in no small part, because he only pays 10K per year in liability insurance. Compare that to 160K for an OB in NY. I believe that complicates matters somewhat for high risk specialities or for other primaries in places like NY, where liability insurance rates are high.
Otherwise, great model.
What I don’t understand is why his fee is so low. I pay my PCP almost twice that for an office visit–in cash and am glad for the privelege of having MY doctor instead of my insurance companies doctor.
I think the fee may represent what I often see in PCP’s –a reluctance to demand fair compensation for value from patients–an embarassement about charging for medical care and a secret desire that they be sort of medical missionaries supported by anonymous third party donor giving heroically to appreciative patients.
The fee can be low when the office overhead is low. With a small census, he can have the same person make appointments and do checkout, pull files and prepare the statement and even collect (need integrity measures, but that is another issue.) He doesn’t need billing personnel or coding personnel or collections personnel, or the space, computer hardware or software those employees require. Accounting is cash basis. He walks his dailies to the bank and there’s no looking back.
The biggest component to overhead is office staff salaries and benefits. Most office staff these days on the administrative side are hired to deal with insurance companies, medicare, billings and collections. He avoids all of that.
What is important is knowing the market. Making the cash price attractive and holding the line on administrative duties. You have to be willing to say no to those who wheedle and whine to get you to file their insurance for them. There are a lot of doctors that don’t think they could do that, which is part of what makes this practice unique and possible: he fills a niche for those with no insurance but a little cash. Those with insurance have to be willing to play by the cash-only rules. There are not too many patients like that. The one group he doesn’t have to deal with are the deadbeats, whether they have insurance or not.
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