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Monday, January 4, 2010

the $25 plan

I would like to make $120,000 a year.  It seems like a reasonable amount to make after becoming good at what I do, and after an expensive and time consuming education, and not entirely out of reason given that the average salary for an internal medicine doctor like myself is $150,000. Despite being well established, busy, and taking call and seeing patients in the hospital, as well as providing various services for the hospital and for a set of group homes for developmentally disabled people, I don’t make anywhere close to that much money.

I would also like to provide high quality care to patients for a reasonable price.  Presently I charge about $160 for an appointment that takes me about 30 minutes, give or take an hour, to complete. That seems kind of steep. The reason I charge so much is that most of what I do, solving problems over the phone, reviewing tests, consulting colleagues, signing my name about a million times a day, is unpaid work.
An average internist takes care of 1500-2000 patients. That is to say that at any given time, there are that many people who consider a given doctor to be “my doctor.” A doctor like me, who works a more gentle schedule, would probably be responsible for 1200 patients.  In my schedule, I would tend to see about 40-50 patients per week, about 50 weeks per year. My overhead is about 50% or a little more, just depending on how things go.

What would be wrong with a plan to cover just visits with me or the folks in my small clinic which would cost $100 a year as a basic fee (to cover the things that I normally do for nothing) and then $25 for an office visit? As I calculate it, that should be a salary of about $120,000 with overhead taken into consideration, and affordable basic health care for whoever was interested in it. Overhead might be considerably lower since these folks would not need to be billed.

People would still have to pay for things like x-rays and blood tests, but much of the really important stuff is not that expensive, and if patients had some stake in bringing the costs of procedures down, or consuming more wisely, things might get cheaper.

“Concierge medicine” resembles this, only with a steeper per year cost and an emphasis on special treatment for the patients involved. Practices that do “concierge medicine” are apparently quite popular in some places, but tend to cater to wealthier clientele.

A system like this could co-exist with insurance: increasing numbers of patients are so underinsured that an office visit would cost them more than $100 to start with, and even the adequately insured patients might like the opportunity to completely bypass the complexity of insurance billing.  Most of the uninsured patients I see could afford this.

2 comments:

Philippa Kennealy MD MPH CPCC PCC said...

Good idea Janice - and in fact, at places like Qliance (http://www.qliance,com), their brand of "concierge medicine" offers a very affordable monthly fee and caters to the un- and under-insured in Seattle. Definitely not the stuff of wealthy folks. Dr Garrison Bliss should be leading the pack in primary care health reform.

Nice to discover your blog! Good luck with your practice and healthcare musings :-)

Chris Ewin, MD said...

Why is American HC so expensive?
I'll speak to primary care....

The problem: Fee For Service

Innovative ideas for change to a direct practice (direct financial relationships with our patients) by physicians are important to change primary care business models.

My thought on your mixed model:
- You are worth more than you are charging. You may be suffering from the Mother Theresa Syndrome, a common malady many of us have where we don't mind offering our services for a discounted price or free.
- If patients trust and like you, they will gladly pay a reasonable amount of money to have easy access to their trusted physician (quality, access, cost) The patient determines the value of the service in their own marketplace.

You suggest a mixed model (fee for care {$100/year} AND fee for service {$25/visit}.

Problems:
a. You have more bookkeeping with FFS {a daily issue} and you have to trust your staff for collections. This will take up lots of your personal time doing bookkeeping.
b. If you are not seeing patients, then you are not collecting revenues. Your monthly revenues will vary.
c. Patients do not want to come in to wait and would rather be treated over the phone if possible or they just have a simple question.
In other words, they want service. Your liability is virtually gone when you are treating your friend.

In terms of "Concierge medicine", it is not for the rich only....Many of our patients don't even have jobs and they can afford it.....I have many scholarship patients and I trade chickens like the old days. Not surprisingly, many don't want a free ride.
They will come up with the money b/c for many of us, it's cheaper than cigarettes ($150-180, mo)...They have cell phones, cars, eat out....
They make the choice.
AVG price is $100-150/mo...with most having 4-600 patients.

The real definition of a direct practice is the pure Fee For Care model....We don't accept insurance, Medicare nor Medicaid associations and we accept ALL patients.

It's the best thing we have ever done.
These are QUALITY-driven practices, not VOLUME-driven practices....It's all about the operations and what your communities price point will bear. And don't be discouraged if the more wealthy don't sign up...It's not surprising that many, even in the close to poverty range, will value you enough to figure out how to raise the money for the services you provide. Many family members will pitch in if someone is in need....

Make sure you look at all the models....Consider becoming a member of SIMPD (soon to be AAPP - American Academy of Private Physicians) www.simpd.org
We have "How to" courses to expand your knowledge about the models.
Consider a consultant to guide you through this. many mistakes are made in transition and it's good to have someone who has been there before.

Chris Ewin, MD
past-president, Society for Innovative Medical Practice Design
www.121DrConsulting.com
cewin@121md.net