Saturday, April 12, 2014

Direct Independent Practice (DIP) Dilemmas

Culture is on the horns of this dilemma; if profound and noble it must remain rare; if common it must became mean.

George Santayana(1863-1952), The Life of Reason

While interviewing 6 physicians in direct independent practice (DIP), i.e., cash-only practices without 3rd party insurance,  I found myself  asking these questions about dilemmas of this type of practice.

One,  will direct pay practices ever be more than a marginal part of the health system

All of the physicians to whom I spoke thought  Direct Independent Practice (DIP) was the future.  They predicted DIP would dominate primary care within 5 years.   National authorities think otherwise.  They note 3rd parties insure 85% of Americans,  and only 5000 of Americans of nearly 1 million physicians  are in DIP.  The 5000 number is deceptive because many physicians offer cash discounts without declaring themselves to be in concierge-type practices or their variants.  Another  deception is that DIP is only for the rich.   DIP practitioners tell me the bulk of their clients are the uninsured and the insured.

Two,  will more physicians take the financial risk of  going into insurance- free practices?

It is risky to switch to DIP from insurance-dependent practices,  to give up panels of 2500 or so patients and to depend on seeing 500 to 600 patients on a cash-only basis.The physicians to whom I talked said there are multiple ways to handle this transition,  e.g. by layering on a concierge-type practice onto a traditional practice, and  easing the pain for patients – by charging fees for time spent,  by foregoing annual retainers,  by having retainers paid on a monthly basis,  by bundling  multiple services (lab tests, physicals, biopsies,  ECGs, discounted generic drugs) into one fee.

How can make a go of DIP without insurers,  who market my services by including me in their network?

Market yourself.   Start with your patients.  Tell them why you are making the switch in order to offer more personal, less bureaucratic, more convenient care.    Go to local businesses. Emphasize that DIP lowers their costs for primary care.   Inform that DIP fits it nicely with health savings accounts and lowers their cost of covering workers.  It  lowers workers' premiums.   Point out that ObamaCare has elevated premiums and deductibles to unaffordable levels.    Tell   specialists  you will  contract with them and send them patients if they will offer your patients cash-discounted services.   Cultivate the local media.  Use testimonials from your patients. Set up a website. On it, be transparent about your prices.  More and more patients are shopping for care online.

But how can I make a go of it financially?  

Simplify  your practice.  You can cut your overhead dramatically.    You will no longer need staff to code and to gather all that data.  You will be more productive. You will no longer have to spend 25% of your time on paperwork.     You no longer need to argue with insurers, or to request authorization.   Bundle your services by charging one fees for most services offered.   You find you are becoming a doctor again, rather than a file clerk for 3rd parties. 

How do patients responds to DIP?

The physicians who I interviewed all said patients “get it.” They understand that DIP is often cheaper than Obamacare-compliant plans.  They understand DIP is more personal,  more convenient, and more accessible on short notice.   They understand ObamaCare has failed to lower costs and to allow patients to keep their doctors and health plans.

Tweet:  Direct-Independent Practice (DIP)  without 3rd party involvement is a  rapidly growing movement among patients and physicians.

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