Meet the orthopedic surgeon who stopped taking insurance and does house calls [PODCAST]

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“I can tell you what I don’t want to do. I don’t want to mill through 50 patients a day, mindlessly clicking through EMR checkboxes so an insurance auditor five states away will deem that I’ve done my job and deserve reimbursement. That’s a high volume, high overhead game, and I don’t want to play it. I recently spoke with a doctor who was getting so many insurance denials that they needed to hire 14 additional billers at an estimated cost of somewhere around half a million dollars a year. Insurance companies want to make it difficult for doctors to get paid. They will only add more hoops to jump through, meaning that I need to hire more hoop jumpers as a doctor. Hiring hoop jumpers costs a lot of money, which means I need to see more patients. Seeing more patients in the same amount of time leads to shorter visits and worse care. Not to mention the pressure from hospital administrators to “expand your indications,” or in layman’s terms, operate on someone who may not really need it.”

Daniel Paull is an orthopedic surgeon.

He shares his story and discusses his KevinMD article, “I am an orthopedic surgeon who decided to stop taking insurance.”

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Hosted by Kevin Pho, MD, The Podcast by KevinMD shares the stories of the many who intersect with our health care system but are rarely heard from.

Transcript

Kevin Pho: Hi, and welcome to the show, where we share the stories of the many who intersect with our health care system but are rarely heard from. My name is Kevin Pho, founder and editor of KevinMD. Today on the show we have Daniel Paull. He is an orthopedic surgeon, and he wrote the KevinMD article “I am an orthopedic surgeon who decided to stop taking insurance.” Daniel, welcome to the show.

Daniel Paull: Hey, Kevin, thanks for having me here.

Kevin Pho: We’ll get into your article in a little bit, but first off, can you share your story and your journey to where you are today?

Daniel Paull: Sure. So I’ll start off by saying that I never thought I was going to have a cash-only orthopedic surgery practice, right? I thought I was going to go get a job at a hospital or a large private practice group like everybody else, and I kind of got derailed. So what happened with me is, medical school, fine. Residency, fine. And then I started a fellowship in hand surgery, and I said, “OK, let me do this fellowship. It’s only a year, right? I’ve already been through nine years of training.”

I get out there, and there’s a couple of things that happen. One is I’m pretty miserable, which isn’t abnormal for a doctor, so it really wasn’t what I thought it was going to be. So that was going on, number one. Number two is I’m looking for a job, and my wife’s from Colorado Springs, and I told her we’d move back here, or at least somewhere in Colorado, and I can’t find a freaking job. I mean, these jobs here, it’s either they want to lowball you or they want you to take call for their entire practice, like 24/7.

So I’m in this fellowship, I’m not super happy, and I can’t find a job, and then it kind of creates this existential crisis. And I have my own family crisis as well, and I’m kind of like, “Well, what am I doing? What am I doing?” You go on this journey thinking, well, there’s a light at the end of the tunnel. You keep your head down year after year, and then all of a sudden you realize, oh my God, there’s no light at the end of the tunnel. It’s just a series of tunnels, and that light is just the light between one tunnel and the next. And it was this whole existential crisis, like I said, combined with a family emergency, and I decided, screw it, I’m just going to roll the dice and go for it.

So I quit my fellowship, broke my lease, moved out to Colorado, and I said, “I don’t really know what this is going to look like for orthopedic surgery. I don’t know if anybody else is doing it.” I’ve got a friend who started a house call business as an internal medicine doctor, essentially, down in Florida, and I’m like, not only is he happier than anybody I know, he’s doing better financially. So I think there’s something there, and I just kind of need to figure it out. And that’s kind of the origin story.

And look, I had no idea what I was doing. Here I am, an orthopedic doctor who does house calls. Who does that? Nobody. I guess me, now. I didn’t know what to do, so I got my bag and my suit, I go to a hotel, and I’m like, “This will make sense. Let me go to hotels. That’ll work.” And it’s like they just wanted me to leave. They could care less. OK, scratch that. Let me try CrossFit. I’m like, you know, they get hurt all the time. So I go to CrossFit gyms, and they’re pretty receptive, but then I realized that CrossFit people never want to go see the doctor, because what I’m going to do is tell them they can’t do CrossFit anymore, and they don’t like that. So it was kind of just feeling my way in the dark until getting things established.

It’s been about two years now, and it’s been growing quite nicely. I do surgeries and probably about 50 house calls now, and I have an office. And the model at its core is not taking insurance; it’s only cash. And the reason for that is not because I love money. That’s really not what it is. It’s more hatred of insurance. If I take insurance, I have to hire five people full time, and then I need more office space. It drives the overhead up to the moon, not to mention your EMR, which every doctor hates because it’s not meant for note-taking; it’s meant for billing. And then you have to see a lot more people and end up spending less time. And I’m sure you talk to docs all the time who are miserable in this system, because it doesn’t allow you to establish a relationship with the patient, and I think that’s the core of medicine.

So I just removed all that. I mean, to me they’re parasites. They’re gone. No hospital administration, no insurance companies tell me what to do. Me and the patient, and to me it’s much better. So that’s kind of the core of the business and the story of how I got there.

Kevin Pho: So you’re in the midst of your hand fellowship as an orthopedic surgeon, and you decided to quit and do what you’re doing now. So what was the reaction of your peers when you made the decision?

Daniel Paull: Well, with anything new, people aren’t going to be super supportive, especially in a conservative community. I think they trusted me, and they know that I did not leave that fellowship lightly, knowing me. And if there was a reason for me to leave a yearlong fellowship halfway through, then there had to be a good one. So I think most people really felt bad for me and were like, “Oh, I don’t really know what he’s doing, but I guess he’s OK at the moment,” and just kind of let me be. And the fellowship was very gracious with that as well, right?

But I’m sure if I went on Twitter and said, “I’m going to do this,” I would have gotten dozens of people telling me how terrible of an idea it was. It just goes to show you, when you have these new, unique ideas, they’re very fragile. You have to keep them safe from people who just want to stomp on them. But most people are pretty reasonable.

Kevin Pho: So you wrote your KevinMD article and told your story. It’s titled “I am an orthopedic surgeon who decided to stop taking insurance.” Now, can you describe your practice in a little more detail and walk me through what a typical day is like?

Daniel Paull: Days are super variable. I’m only probably seeing a handful of people a day, and they’ll pay me cash at the end of the visit, and there’s really not a whole lot to it. I mean, sometimes I’ll see a bunch of people at once; some days I don’t see much of anybody. You get the occasional surgery, and I’ll do it in an outpatient surgery center. I’ll do medical-legal work too as an orthopedic surgeon. That’s not a good source of revenue; I also kind of like it.

There are offices that I work at. What I found is that as I traveled around, other docs would be like, “Hey, can you come see this patient in my office?” And all of a sudden I’ve got all these offices that I go to, including an imaging center. I don’t pay for any of them; I’m essentially value-added there. So sometimes I’m all over town. Later today I’ve got to travel; I think I’m traveling like an hour and a half to see somebody, and all the costs are factored into that.

But it’s not a grind at all. I mean, I have a fair amount of free time, and then there’s time spent running and growing the business and getting that going, things like figuring out payroll and workers’ comp insurance, things that you never thought you were going to be doing until you’re doing them. But overall, it is much, much more relaxed than anywhere I’ve previously worked.

Kevin Pho: Now, are most of your patients house calls? And if they are, are they initiated by the patients themselves, or are they initiated by referring clinicians?

Daniel Paull: I’m probably 50 percent house call right now. It’s both; it’s a mix. So some are from referring clinicians. Other people find me on the internet, which is great, and they’ll just call up and make an appointment, same day, next day. And the goal is to help them and provide as much value as I can. And I see all sorts of things. I go all over the place, but I’m trying to keep their interest in mind as best I can: “Yes, we can get an MRI of your knee. Let’s try this injection. If you’re still having pain, then we can get you an MRI,” remembering that all these people are all cash, so they’re kind of on board with all this. So it’s super variable in that regard, but enjoyable. I’m not rushed. If I’m late to the next patient, I send them a text. They have my phone number. It’s pretty good.

Kevin Pho: So if I’m a primary care physician in your area and I’m seeing a patient for an orthopedic issue, do I give them a choice? I can send them to a traditional orthopedic referral, or I can call Dr. Paull to come see you right now for an added fee. Is that traditionally how it works if I’m a primary care physician?

Daniel Paull: Yeah, I would say so, but most of the referrals from primary care physicians come from direct primary care doctors. In other words, most of those patients are already in that world of cash pay. They’re turned on to that idea. If you’re a traditional internist and you have 15 minutes a patient, 20 minutes, and half of that’s documentation, you don’t really have the time to explain what I do and how my pricing works and everything. And most of those people you’re seeing have insurance anyway, so that tends not to be a good referral source for me, because the patient kind of needs to be turned on to this kind of cash pay, how you actually can get high-quality care at a relatively low cost.

But I kind of determine it as in system and out of system. If they’re in system, I’m usually not a great fit. Sometimes I am. But out of system is really where I can sit down and explain what I’m doing, and they’re much more on board.

Kevin Pho: Sure. And so if I’m a patient, what are some of the advantages of going to you versus an in-system orthopedic surgeon?

Daniel Paull: Well, first is time, right? So I can see you same day, next day, whether that’s suturing, casting, splinting, or a steroid injection or whatnot. You make an appointment at the busy orthopedic practice, it could take you a month or two. You go there, wait for two hours, and then you end up seeing the PA anyway. Now, some PAs can be really good, but if you waited two months and two hours in the office to see somebody, you generally want to see the doctor. And the time you’re going to get with me is much longer.

And communication is one of the cores of my business, so that’s extremely important to me. So everybody has my phone number, and I encourage them to call and text me, and they do. And so it’s a relationship-based practice. And if you experience that with a direct primary care doctor, or a doctor moving their schedule around to spend more time, usually it’s a much better experience in that regard. But doctors in the system are certainly talented. It’s not about the doctor; it’s about the business model of delivery. And I just think the one where you spend more time and you cut out all the parasites provides higher-quality care, which people tend to like better, for the doctor and the patient.

Kevin Pho: And in general, what’s your relationship with your other orthopedic peers in your area?

Daniel Paull: It’s mostly zero. If I ever have a question about something orthopedic-related medically, I usually ask one of my people in residency, one of my attendings in residency. But no, I mean, I’m in a very competitive area, and there’s a high rate of narcissism and arrogance in my specialty, which I can’t stand, so I generally try to avoid them as much as I can.

Kevin Pho: Do they see you as a threat?

Daniel Paull: I don’t know how they see me. I mean, maybe I’m just sort of an anomaly. We’re not really even in the same sort of market. So they probably, I have no idea, they might or they might not. I’m not too interested in what they really think about me. I know a lot of these guys are super nice, but I’ve met some of the nastiest people I’ve ever met while in training. So they’re mixed. That’s why I stay away.

Kevin Pho: And as far as you know, running this type of orthopedic practice, are there any models like this across the country?

Daniel Paull: I don’t think so. If there are, I’d like to learn about them, to bounce ideas off each other. But as far as this type of practice for orthopedic surgery, I don’t think there are. I’ve met some docs who kind of dabble and do both. I mean, I’m completely detached from any sort of insurance: no Medicare, no Medicaid, no TRICARE, no regular insurance or anything. I think some docs are kind of partially out, but not completely.

Kevin Pho: And you have enough of a base of patients who are interested in a direct care model to keep your schedule full?

Daniel Paull: Yeah, well, I wouldn’t say it keeps the schedule full all the time, but it definitely is sustainable, because you’ve got to remember the overhead is so ridiculously low. Even your EMR is low. You don’t have office space. I mean, my staff is just me and my wife. So we can certainly turtle up if we don’t get anything for a couple of days. I’m not having these massive, massive payments of things. So it’s a very durable, very minimalist business model. You can kind of shrink down in a second and be OK if times get tough.

Kevin Pho: We’re talking to Daniel Paull. He’s an orthopedic surgeon, and he wrote the KevinMD article “I am an orthopedic surgeon who decided to stop taking insurance.” Danny, what kind of resources did you turn to to help build this model, especially if it’s something that really hasn’t been done anywhere else?

Daniel Paull: I loosely based it off of what my colleague did down in Florida, and then there’s a lot of trial and error. You meet with direct primary care docs and take a little bit from what they do. I’ve been educating myself a lot, just reading general business books. I don’t have an MBA. I don’t really want one, but you can get a lot out of a library card and just kind of generally formulating your ideas. And it’s a lot of going with your gut, just hoping things work, and then failing forward. And if things don’t work, hopefully you don’t sink yourself, and you can pivot, and by trial and error kind of figure this all out. And I don’t know of a better way to do it.

Kevin Pho: And for other medical specialists who may be interested in a direct care model, what are some of the lessons that you’ve learned along the way that you obviously wouldn’t do if you were to do this again?

Daniel Paull: If it’s a specialist, you’re going to have to kind of figure out what works for your specialty, and there is usually always a way to do it. It’s just a matter of using your creativity and ability to take risks, two things that get stamped out in medical education, by the way. They don’t like either of those things. So you need to harness those, knowing that you’re not going to make money for a while, that you’ll essentially be poor, and kind of plan for it. But if you’re creative enough and you’re stubborn enough, which we all are, of course, you can find a way to make it work. You just might not know what it looks like, or it may look different than what you think it may initially look like.

Kevin Pho: Now, how long was your proverbial startup phase? You said that people who go into direct care start off proverbially poor, but then you become sustainable. How long was that ramp-up phase before it became sustainable?

Daniel Paull: Let me think. So I cut my personal costs a lot, with my wife working, so we were able to get by with me not working. But I think it took a couple of months of just kind of getting the business set up, and then I started, and I think it was eight months until it was profitable, with paying myself here and there. That’s what it looked like for me.

Now, granted, the overhead’s not super high. It’s like a low-overhead, low-volume game, instead of your standard leveraging yourself up to the gills, taking out millions of dollars for these huge practices and hiring an army of people, because then if that doesn’t work, you’ve really got problems. But I didn’t need a ton of startup capital. I think it was only like $7,000, something like that.

Kevin Pho: Now, you’re in Colorado, which is obviously a high ski area. I’m sure that you have a lot of orthopedic cases. Do you see your model being able to be replicated across the country?

Daniel Paull: Yeah, I do. I think I do see a fair amount of cash, and it takes different time to build, and that will look different depending on where you go. But there are two other aspects of it. One is there’s kind of like a medical lien thing. So people who are involved in car accidents, like medical liens, I can also hold, because that’s essentially cash. And then the other one, what I’m trying to get going, is an employer-based musculoskeletal cost-containment service. And I think that as employers hit these high pain points with these crazy high premiums, they’re going to start looking for other options. So I think there’s a way to make it work in most any area; it’s just going to look slightly different.

Kevin Pho: And my final question: What’s your take-home message you want to leave with the KevinMD audience?

Daniel Paull: I think the take-home message is that if you have thoughts of doing these things, there is a way out of your practice that you don’t enjoy. It’s just going to take some risks, and just know that you may not have money for a while. But if you’re stubborn enough and you’re creative enough, you can usually get it to work. And you know what? Even when you start that initial phase and you’re poor or you’re not making any money, you’ll be much happier than you probably ever were in system. So you get that immediate reward.

Kevin Pho: And how can people reach you?

Daniel Paull: The best way to reach me is if you go to my website at www.easyorthopedics.com. I have a contact form, and it goes right to me. You just submit it, and I’ll be happy to respond. All right. Twitter, easyorth01. I’m on that a fair amount as well.

Kevin Pho: Daniel, thank you so much for sharing your story, time, and insight, and thanks again for being on the show.

Daniel Paull: Thanks again, Kevin.

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