Thursday, August 28, 2014

Everything You Ever Wanted to Know about Direct Pay Independent Practice But Were Afraid to Ask

Ask, and it shall be given to you; seek and ye shall find; knock, and it shall be opened unto you.

Matthew 7:7


Because of a book David Racer and I wrote about direct pay medicine, Direct Pay Independent Practice: Medicine and Surgery, I am often asked about the current state of the direct pay medicine.

As a retired pathologist, health reform commentator, and bystander, I am not directly involved in the movement, so I am not the person to ask.

The people to ask are those actively engaged in organizing the Free Market Medical Association with members in all 50 states, organizations consulting in making the transition from traditional practices now driven by 3rd party payments – MD-VIP, Special Docs, Signature MD, and Access Health, and Jeffrey Bendix, a senior editor of Medical Economics, who has just written a comprehensive article on the subject : "Direct Pay: A Promising Model with Challenges, Medical Economics, August 21, 2014.

The statistics I am about to share with you are from his article.

• What types are direct pay practices are now operational?


1. The first is a straight cash model. Patients pay out-of-pocket, Sometimes the practice will give the patient a superbill that the patient can submit to his or her insurance company for reimbursement.

2 Under the second model patients pay a monthly fee to be included in a physician’s panel. The fee covers unlimited office visits and 24/7 access to the physician, including via text or e-mail. In most cases it also includes whatever in-office procedures and tests the physician offers, although some practices charge extra for these.

3. The third form, generally known as concierge medicine, includes a monthly or annual fee. Patient receives services such as 24/7 access by telephone or e-mail, a comprehensive annual physical exam, and no-waiting appointments. Some practices maintain contracts with insurance companies but most disengage from 3rd patients.

How long does it take to transition from a traditional practice to a direct pay practice?


Three to six months.

What specialties participate in direct primary care?


Sixty percent are internists, but family physicians also are switching to concierge practices, along with certain specialties, like psychiatry and certain surgical specialties, especially surgeons operating in direct pay ambulatory surgery centers. Many surgeons also accept direct pay discounts.

What incomes can direct pay physicians expect?


Less than $100,000, 33%; $100,000 to $200,000, 40%; $200,000 to $300,000, 14%; $300,000 to $400,000, 5%; over $400,000, 8%.

What are the average ages of direct pay physicians?

Under 30, 13%; 40 to 49, 32%; 50 to 59, 45%, over 60, 10%.

What are the average monthly subscriptions charged to patients?

Under $50,11%; $51 to $100, 14%; $101 to $135, 31%; $135 to $180; over $180. 36%.

What are the challenges involved ?


The challenges are (loss of loyal patients, criticism by colleagues and policy makers) and economic (loss of income during transition, lack of guaranteed success, no certainty direct pay movement will catch on, though some are predicting a 10% to 15% annual growth rate; and bureaucratic hassles from government and insurers while making the transition).

Read our book, Direct Pay Independent Practice Medicine and Surgery (Kindle book. Amazon.com, $9.97) and Medical Economics article for details).

My book features interviews with 12 participants in the direct pay movement – their experiences and their expectations

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