Many of us trained in the traditional practice of insurance don’t realize there’s another way to practice medicine. We believe the only way to get paid is through insurance reimbursement. However, the health care system has misaligned values that puts profits over patients and this has given rise to the Direct Care movement. Physicians are taking back control in how we care for patients and how we get paid. By removing third party payers, the patient-physician relationship is restored where patients are able to spend the time they need with their physician, and physicians get to enjoy thoughtful visits without being rushed or having to stare at their computer screens to complete irrelevant metrics.
Direct Care is a general term that includes Direct Primary Care (DPC) and Direct Specialty Care (DSC) business models that do not contract with insurance and patients pay the doctor directly for their medical expertise. Many physicians are fed up with the assembly line pace of corporate medicine and want to humanize medicine again by opting out.
Three common misconceptions about Direct Care that physicians must let go of if you want a successful Direct Care practice.
- “I’m abandoning patients by opting out.”
- “It’s only for rich people.”
- “I have to see a lot of patients to make a lot of money.”
“I’m abandoning patients by opting out.”
Many physicians are afraid to opt out because of the fear that they’re abandoning patients who want to use their insurance. The word abandon is strong, especially in the context of physician liability. The truth is, patients will choose to pay for what they value. When I opted out of insurance, the majority of my established patients moved on. While I was sad to see them go, I also understood that they wanted the benefits of their insurance. However, those who stayed found a way to pay. They saw the value of an efficient experience that was hassle free, and are guaranteed to never receive a surprise medical bill. If they had an urgent concern, I’m just a text message away and can efficiently triage them, giving them peace of mind. My patients are aware of the cost up front and have ample opportunity to be financially prepared for my service.
The solution to this fear is knowing there are many people fed up with the traditional experience of long waits for appointments, impersonal phone trees and are seeking Direct Care doctors. Also, having a niche specialty helps make you different from in-network options. People will pay more for specialty care.
“It’s only for rich people.”
Many Direct Care doctors will say they have no idea what their patient’s income level is, nor do we need to ask. It’s nobody’s business how much people make and how they choose to spend their money. Although it does make sense to be in a community where there is money, there are many successful Direct Care doctors who serve lower income or rural populations. As long as there is frustration with corporate medicine and the depersonalization of medical care, there will always be room for Direct Care.
Oftentimes self pay options are much more affordable than insurance rates. Why does an MRI cost $1500 through insurance when it’s only $500 at the cash rate? That’s the health care system we have. There’s too many administrators between the patient and physician and everyone demands to be paid. Yet doctors are held to a different standard and our reimbursement rates continue to decline making private practice harder to sustain in the insurance model.
“I have to see a lot of patients to make a lot of money.”
This makes logical sense that you’d have to see more patients to generate more money. But when time and energy is fixed, while staff demands higher wages and the general cost of things are going up but insurance reimbursement continues to go down, it’s no wonder owning a private practice is challenging if not impossible. Some may even argue it’s a matter of time that all physicians become employees of the system. I’d say many of us Direct Care doctors know that won’t happen. It’s too good on this side.
As a Direct Care doctor, owning a business is simply knowing your numbers. Without insurance, the cost of overhead is significantly lower, which in turn means bigger profits that will sustain a private practice. Typical costs associated with handling insurance claims include bulky billing software, staff to handle insurance verification calls, monitoring the accounts receivable, and having a high volume of patients to make up for the low reimbursement rates which means fielding a lot of phone calls, dealing with no shows, and frustrated patients in a crowded waiting room. Remove insurance, then you have rates that are appropriate for the expert care people need and double or triple booking is no longer necessary.
As a Direct Care doctor, owning a business is simply knowing your numbers. Without insurance, the cost of overhead is significantly lower, which in turn means bigger profits that will sustain a private practice. Click To Tweet
What’s the catch you wonder? Yes, there is a catch to this dreamy side of medicine. Physicians have to learn the language of ethical marketing.
“There’s a catch to this dreamy side of medicine (the direct care model). Physicians have to learn the language of ethical marketing.”
When you are an in-network physician, patients find you easily through other in-network referral sources. When you opt out, you’re actually marketing to a different type of person, one who is willing and expecting to pay (and they’re not always the rich ones!). They’re usually the sensible ones who have a high deductible who can’t seem to see a physician until weeks or months out and just need medical care without having to go to the ER for an outpatient problem. Maybe they’re uninsured and just need to know the price of things upfront. Maybe you have a very special niche that is not covered by insurance and you’re tired of telling people it’s not covered by “their very good insurance.”
There’s a multitude of reasons people looking for a Direct Care doctor but before you dive into this model, make sure you tune up your beliefs to ensure you successfully build out your dream Direct Care practice.