As the Affordable Care Act rolls out across the US a handful of doctors are rejecting the entire idea of health insurance (government supported or otherwise) and starting cash-only practices. They even seem to be profitable.
Cash-only medical offices (known in the medical industry as “direct primary care”) have one big advantage over their competitors. The amount of paperwork is drastically reduced which means fewer employees to help run the practice. No Medicare/Medicaid headaches, no back and forth with HMOs, PPOs or anyone else for payment. A patient comes in, pays for what they need and leaves. The practice can focus solely on patient care, not on the paperwork to support patient care.
There are drawbacks. Patients still need catastrophic health insurance coverage in case of a major event or illness. While chronic diseases like diabetes can be managed at cash-only clinics, acute events generally need more sophisticated facilities. A patient might be unable to use their doctor (who likely doesn’t have hospital privileges) while they are in the middle of a medical event. Catastrophic insurance policies also tend to have high deductibles, sometimes as much as $5,000. This might leave patients in the poor house when everything is finally added up.
How a Cash-Only Medical Clinic Works
A physician or group of physicians with a private medical practice will stop taking insurance. They either offer an a la carte option of services to patients or they request a monthly fee which covers basics like an annual visit or simple blood work. Any expenses above the month-to-month services are extra, but are usually provided at a discount below typical physician fees. The physicians contract with other local medical providers such as pharmacies and labs to offer patients discounts on drugs and additional lab work when needed.
There is a growing list of cash-only physicians providing these services. The doctor has no constraints on how to diagnose or treat patients but might be limited to what the patient can afford.
How Cash-Only Differs from Concierge Care
Just what to call these clinics differs depending on whom you talk to. But generally speaking, cash-only clinics are just that, they accept payment via cash, check or credit card and don’t offer any insurance coverage.
A sister model is concierge care. Physicians continue to accept health insurance and have affiliations with hospitals, etc. But for an additional fee they allow patients to have more access to them. With a concierge service, physicians accept fewer patients as a whole so there is more time dedicated to each patient. The patients are essentially crowd sourcing for exclusivity. Patients can pay anywhere from an extra $150 to $6,000+ a year for that access.
A recent survey for The Physicians Foundation found that 9.6% of “practice owners” are planning to convert to a concierge practice over the next three years.
Physicians Switching Over
It’s estimated there are 4,000 physicians in the U.S. who offer either direct patient care or concierge care and that number is growing. Physicians who are considering this model need to weigh the pros and cons of each option. One of the big differentiators is that physicians will have a more hands on approach to the business side of their practice.
Other skills to consider with a concierge or cash-only practice are social media skills, website development, blogging, community outreach, and in-house staff who can help sell the services.
One place to start for information is Concierge Medicine Today, a website dedicated to this growing type of medicine.
Are you a concierge or direct pay physician? Do you like it better than the typical U.S. model? Have you hit any snags? Feel free to leave a comment below or if you’re an M.D. or D.O. join us inside Sermo for more in depth discussion.