Interview with Josh Umbehr, MD, one of three direct pay physicians at Atlas Medical Group¸ Wichita Kansas

The role of the mind in man’s existence – and, as a corollary , the demonstration of a new moral philosophy: the morality of rational self-interest, or Objectivism.

Ayn Rand (1905-1982),  describing the theme of her best-selling novel.  Atlas Shrugged (1957)

Entrepreneurs everywhere ignored the same voices of expertise: the economists who deny their role as the driving force of all economic growth; the psychologists who identify their work and sacrifice as an expression of greed; the sociologists who see their dreams as nostalgia for a lost frontier; the politicians who call their profits unearned, their riches as pure luck

George Gilder,  The Spirit of Enterprise,  Simon and Schuster, 1984

What follows is an interview with Josh Umbehr, MD, a family physician in the three person Direct Pay (aso called Concierge) Atlas Medical Group in Wichita,  Kansas.  Wichita  in 20i2 had a  metropolitan population of 636,000 and was the largest city in Kansas.  Wichita is home of a number of aircraft manufacturers and is known as the “Air Capital of the World.”

The  Atlas medical group’s operating philosophy is Objectivism,  a doctrine of Ayn Rand, author of the 1957 novel, Atlas Shrugged,  who held that all reality is objective and that all knowledge is reliably based on observed objects and events.    Dr. Umbehr  and his partners believe that within 3 to 5 years most primary care physicians will be in direct pay, non-insurance  practice^.

Q:  How big is your practice and its staff? And when was your practice  founded?

A:    We have 3 physicians and 1 ½ registered nurses – one full time and one half time. We were founded in 2010.

Q:  How old are your physicians?  33, 33, and 32.  We started our practice right out  of residency.  We started with zero patients. We now have more than 1500 patients.  We are profitable and have below market rate prices.  We charge a monthly retainer fee.  It’s $10 for kids and $100 a month for adults.  Our corporate price is $50 for all adults.   We add 30 to 50 new clients  each month.

Q: I understand you have a unique EMR system to handle your patient volume  and for your type of practice.

A:  We have a custom EMR which we release  as a product for other physicians in the direct care concierge market.  We have designed our own software to be useful for our kind of physicians.  

We do a lot of unique things with it: dispensing medications,  labs wholesale, monthly payments, working with employers, merchant fees, shipping labels, postage, and so forth.   We needed an EMR for a very lean, very efficient, profitable practice. 

Q: Who helped you develop your customized EMR?

A: We have a software development team.  We sell the EMR to other practices.  We get out in front of other physicians through national media,  Sermo,  Facebook.  We offer our consultative services free of charge because we want to see the direct care movement grow. We have 20 clinics currently using our system and 87 different clinics in a trial mode.

Q:  I have read your website, atlasmd.com, and I know you offer a monthly retainer, same day service, unlimited time with a physician,  office visits or home care options,  access to doctors’ cell phones,  free lab work and ECGs,   free office procedures,  generic drugs at wholesale prices, among other things.    

How would you rate your level of satisfaction with this type of practice as a physician?  And what do your patients think of it?

A:  I’m thrilled with the practice, and I make more money than I ever did.  I see fewer patients. I provide better care. And there are no hassles, frustrations, or coding.  Our patients like it too.  We have about a 2% attrition rate.

Q; How do you handle referrals?

A:  It depends on patients’  insurance. We simply refer them on to a participating provider for their insurance.   We do not accept insurance ourselves.  We’re 100% insurance free,  but most of our patients carry insurance from  others. I like it this way.  I haven’t had to code anything for insurance companies for 3 ½ years.

Q: In a traditional private care practice with 3^rd party payments the overhead runs 50% to 70%.  What is your overhead?

A:  About 20% to 30%. That’s mostly rent and staff.   We have 1 and 1 /2 employees, and they’re both RNs. The national average is somewhere between 5 and 10 employees.  By that criteria, we should have 20 or 21 employees for this practice.  Doctors ask us why we charge so little.  It’s because we spend so little.

Q: Do you expect the direct pay movement without insurance to catch on nationally?

A:  Absolutely.   It will catch on quickly as insurance premims  continues to increase in cost. People will   need affordable care, and that is what we offer.  With an ObamaCare bronze plan, it’s $8000 a year with a $13,000 deductible before they have any coverage.  You  can pay $21,000 a year before you get any assistance, and its 60/40 after that.  Our value will more than entice patients to join.

Q;   You are saying these ObamaCare plans – bronze, silver, gold, and platinum play in your favor.

A:  They do.  No question about that. ObamaCare  helps the direct pay care movement.  ObamaCare is the direct care salesman for the year.  ObamaCare will  drive people right to our door. 

Q:  What do you see as the future of ObamaCare?

A:  It will continue to collapse in its own way. Insurance will continue to go up,  and ObamaCare will continue to go down, and it will usher in a paradigm shift for medicine to private care.  Most primary physicians will be in private care model in 3 to 5 years. There’s no value in maintaining the current system, at least  primary care if you look at it objectively. You don’t have insurance for gasoline,  why have health insurance for primary care? 

Our business model cuts red tape and lowers prices.   It doesn’t reduce care or prevent care.

 Why go to the ER when you have your doctor’s cell phone? Why use retail priced brand name drugs when we can get them for you wholesale? Why should anybody continue to use a bloated insurance plan?  

That’s why we’re making such great progress with insurance plans and employers, converting  their expenses over to our low cost model. We can save an employer 30% on their premiums just by redesigning their plan to match up with our business model.

Q: Do you market directly to employers?

A:  Yes, we just had a meeting this morning to have an employer match up an HSA plan we put together for them. They employees will pay less for their insurance and get a raise.  How many times have you heard that – doctors negotiating with employers so their workers get a raise?

Q:  What is your hospital affiliation?  How do you handle your relationship with hospitals?

A: We are not members of the hospital staff.  The hospital we trained at requires you do 10 admissions a year, and we do not do that.  If a patient needs admission, we use the hospitalists’ service.  The admit for us and manage the care for us.

Q: How large is the hospital where you trained, and what is its name? Are there any other physicians training there become concierge physicians?

A:  Wesley Medical Center. It has 400 or 500 beds.  I don’t know if any of the residents coming out of there are becoming concierge physicians.   As for us, we are working with physicians across the country who want to join the concierge movement.

Q: If your model evolving?  Are you refining it?

A:  We have 95% of the details worked out, and we are not changing it much.   As things now stand, each of us about 600 patients in our individual panels. 

Q:  Do you do any procedures in your practice?

A:  Yes, we do, and we do them free of charge.  These include lacerations, biopsies, EKGs, Holders, audiometry, ultrasounds, joint injections, urinalysis, lesion removal, minor surgeries, removing toe nails, stitches.  All of these are low-cost procedures. 

Q:  You are a young group.  I thought most concierge physicians were 50 or older and sought an escape from the system.

A:  That may be, but we saw the handwriting on the wall ten years ago.   We do not want to go through our career for 10 years, hating a broken  system and what it was doing to primary care physicians. 

Q: Do you think concierge direct pay medicine is a regional phenomenon?

A: No, everybody needs affordable care. Everybody wants to pay less for consumer products, gasoline and so forth, and  health care is no exception.  If something is better and cheaper, it will succeed, regardless of the market.  

Ours is a better business model,  and it decreases insurance premiums by at least  $100 a month everywhere it is tried and applied.  Our value propositions of unlimited visits,  free procedures, no copays, discounts on wholesale medications and lab,  can save patients significant amounts of money.   We can also carve $600 or $700 a month out of insurance costs.

Q: Do you market to insurance companies?

A:  We have a team of two  insurance experts, a separate business, who market our practice to insurers.  The better our business model, the more effective they can be in decreasing the cost of insurance.  They can save employers 30% to 50% from bloated insurance plans. 

Q: My understanding is that insurers are “uneasy,” to use an euphemistic term, about ObamaCare because it forces insurers to offer  10 comprehensive essential benefits for each and every plan covering all pre-existing conditions. 

Q; Yes, I think the mandates will drive premiums and deductibles to unaffordable levels.  We can show insurers that,  by working with us, they can be more cost effective while managing their risks and being more profitable. 

Q:  What are hospitals’ attitudes towards your practice?

A:  I don’t think hospitals notice us very much. I suppose the hospital could be aggressive by offering us discounts on lab, xray, or imaging, but we haven’t gotten to that point yet.

Q:  You seem to be telling me: A. Doctors like this model because it is growing; B. Patients like it because of lower costs and easier access; C. insurers and employers like it because it cuts their expenditures and boosts their profits. What’s not to like?

A: Exactly.  We hear it all the time.  It sounds too good to be true.  It makes sense.  Why isn’t everybody doing this?  It’s a model about being very objective about price and value. 

Q:  I read you came to this model, because one or all of you had read Ayn Rand’s 1957 book,  Atlas Shrugged,  and you adopted her philosophy as your philosophy.  Indeed, so much so, that you named your practice “Atlas MD.”

A: Yes, we all have read her book.  I have read it 11 times.  Her philosophy is “Objectivism,” that the science of economics has objective answers that you can be logical and thoughtful about.   Her book is a justification of  capitalism that brings the most protection to the individual.  Money is the root of all this is good. It a a voluntary exchange of goods for all parties involved.  The love of money is to love what is good.

Q:  As you are no doubt aware, there is another side to all of this, namely, consolidation  with hospitals hiring more than 50% of doctors and government herding them into accountable care organizations.

A: Yes, but consolidation may be destined for failure.  Already  hospitals are losing a lot of money buying up physicians,  just as they did in the 1990s, and they are driving up prices for primary care and specialty care as well.  

It’s a death spiral – premiums going up,  reimbursement for physicians going down,  productivity and profits  dropping ,     I feel confident that ultimately most of the primary care market will be direct care.  There is no value in doing more work for less money, and sooner or later, most physicians most physicians are going to turn off the lights in traditional practices.

Q:  Thank you for your time, any other comments.

A:  Yes, I would like to end with the story of Christopher Columbus and the Egg.  After his return from discovering the New World, he met with a group of imminent philosophers.  In their discussion,  they agreed you can’t make an egg stand on its end because it will wobble and fail.   Columbus takes the Egg,  crushes the bottom on the table, and up it stands.  What we have done is the same thing. We have crushed the bottom of the health care egg and made it stand.  Now everybody knows it can be done and how to do it.  Our model is thriving while the other model is falling down.  I do not think the present model of expanding Medicaid and Medicare and trying to insure everyone is sustainable.   Our system is going to have to adopt a low-cost, high-value,  more efficient, more satisfying, more convenient. non-insurance primary care foundation.  It is  all about disruptive innovation and creative destruction of our present system.

Tweet:   Concierge medical practices, a direct-cash, no-insurance  business model, are growing fast,  and offer an attractive  alternative to traditional practices and ObamaCare- approved exchange plans.