An Epiphany On Direct-Pay Practices

DrRich | August 8th, 2011 - 6:56 am


DrRich’s recent posts on the death of primary care medicine elicited several responses from readers, not all of them positive.

Most of the complaints DrRich harvested from these posts had to do with his suggestion that the physicians formerly known as PCPs ought to drop out of the dysfunctional healthcare system altogether (the system that has, purposefully and with malice aforethought, wrecked their chosen careers), then strike out instead on their own, and establish private practices in which they are paid directly by their patients.

This suggestion creates, among many in our society (and apparently, among many of DrRich’s readers), a viscerally negative reaction. Many people believe that DrRich is exhorting doctors to embrace their inner greed, and abandon the great lot of patients in order to satisfy their own selfish desires and foolish professional pride.

A reasonably typical comment came from one Tracy, who avers, “Only the rich will be treated. I don’t think we want to do that do we?”

Now, if DrRich were a Progressive, he would take advantage of the fact that Tracy (who thoughtfully provided his website address) is a health insurance agent, and would dispense with him using a scathing ad hominem attack, something like: Look who’s talking about somebody selling a vital healthcare product at such a high price that people can’t afford it!

But DrRich is not a Progressive. So he will ignore the delicious irony in Tracy’s complaint, and address the substance of his comment. To restate Tracy’s objection (and, in fact, all of the objections that have been made to physicians dropping out of the system and establishing direct-pay practices): For doctors to demand that patients pay them directly is elitist and unethical; only the rich will be able to afford this kind of care; a two-tiered healthcare system will develop, and public health will suffer.

DrRich will answer this objection in two ways. First, he will make a philosophical argument as to why direct-pay practices are the right thing to do. Then he will give a real-world example that demonstrates how a direct-pay practice is, in fact, good for patients and for society.

The fundamental argument that supports the rightness of direct-pay practices has been made numerous times on this blog. In summary: In the attempt to control healthcare costs, the Feds and the insurance companies have, in uncountable ways, entirely coerced physicians (using and exercising the threats of loss of income, massive fines, and jail) to place the needs of the payers ahead of the needs of their individual patients. In so doing, they have systematically destroyed the doctor-patient relationship, in the process killing medical professionalism, and reducing patients to objects, to cost centers, and abandoning the sick to their own devices as they attempt to navigate an increasingly hostile healthcare system.

This process is now firmly established. It has been legislated by Congress, embodied in volumes and volumes of rules, regulations and “guidelines” (strictly and ruthlessly enforced), upheld by the courts, and finally (and most tellingly) sanctioned as being entirely “ethical” by the physicians’ own professional organizations.

It has become impossible for doctors – especially the PCPs, who have been most directly affected – to fight this reality. If they want to escape, their only options are to become a medical specialist (since outpatient primary care is the main lever on which the Feds are pushing), a deep-sea fisherman – or a direct-pay practitioner.

So primary care doctors must either resign themselves to a system that ruthlessly pushes them toward an unethical, demeaning, public-health-destroying style of practice, or (one way or another) get out.

The only means that will allow them the freedom to practice primary care medicine in a way that is compatible with true medical ethics – which allows them to place the needs of their individual patient above all other considerations – is the direct-pay model. And this means that the only way for a patient to have a primary doctor who treats them the way patients are supposed to be treated is to find a direct-pay doctor.

To argue that direct-pay practices – or any innovation that would somehow restore both the doctor’s professional integrity and the patient’s rightful advocate – is unethical is completely upside down. It is one of the few viable pathways toward restoring the foundational (but currently obsolete and officially repudiated) medical ethic of always placing the patient first.

To argue that direct-pay practices threaten public health completely ignores reality. In fact, this is one of the few viable pathways toward restoring protections that the public is supposed to have when facing a healthcare system that is utterly bent on avoiding spending money on them.

To argue that direct-pay practitioners are creating a two-tiered healthcare system is ridiculous on its face in a society that gives mere lip service (though, to be sure, plenty of it) to the problem of 47 million uninsured.

To argue that direct-pay medicine will create a subpopulation of elites (because it provides a mechanism by which some individual patients can escape the deadly obstacles that have been intentionally laid before them), is as absurd as arguing that George Washington was wrong to free his slaves upon his death (or even that New York State was wrong to abolish slavery at about the same time), because it created a subpopulation of “elite” (i.e., free) African Americans; that until all slaves were freed, no slaves should have been freed. But freeing at least some slaves – and forthrightly stating why it needed to be done (see: Declaration of Independence) – was not only ethical, but also showed what was possible, and over time created an expectation that eventually could no longer be ignored, and that, at huge cost, was finally fulfilled.

It is important to note that any innovation that can potentially spare patients from some of the harm the healthcare system has in store for them will necessarily be applicable to only some patients at first. That’s how disruptive processes work. They begin as niche products or services, attractive only to a few high-end users; too expensive or too marginal for the vast majority; ignored, ridiculed or castigated by current providers. But if at their core they’re offering something fundamentally useful, they will slowly demonstrate their worth – and eventually all the potential users will see the light, and demand for the product will become explosive. When that happens, the means are found to make the new product affordable and available to meet the demand – often by making significant adjustments to the original concept, that nonetheless preserve the core benefits. And when that happens, the traditional providers (who never saw it coming) are suddenly out of business.

It may not be that direct-pay medicine plays the personal computer to the traditional healthcare system’s mainframe. But it is inarguable that what it offers to patients – at its core – is every bit as vital and every bit as indispensable. And if a critical mass of the public can be made to understand what is really being offered here, there will be no holding it back.

Unfortunately we have a limited window of opportunity. The vociferousness of the complaints against direct-pay practices indicates just how threatening these are to the Progressive program. Unless this practice model gains a sufficient toehold, and quickly, it will be made illegal. Because Americans cannot be permitted to spend their own money on their own healthcare.

DrRich will finish by pointing his readers to a real-world model of a direct-pay practice which, he believes, graphically demonstrates the potential benefits of such a model.

Epiphany Health is a direct-pay primary care practice recently begun by Dr. Steven Shell and Dr. Lee Gross in southwest Florida. These doctors took pains to make their services affordable to many of the uninsured (and underinsured). For about what you would pay for a cell phone contract or for cable TV, they will be your doctors.

Doctors, that is, in the original sense – a professional who knows you well, a personal advocate for your health, who is dedicated to placing your interests above all the other competing interests within the healthcare system. Because they are paid by you, it is you they must satisfy in order to have a viable career.

As Dr. Shell told Sun Newspapers, “Our simple, preventative healthcare plan has several advantages that include true price transparency (cost of services ahead of time), high quality care, affordable fees, no copays, no deductibles, no pre-existing condition exclusions and a plan not tied to an employer.”

In addition to price transparency, Epiphany offers major price discounts to their patients. They have negotiated these discounts with pharmacies, physical therapists, imaging centers and laboratories. These discounts are often in the range of 75 – 80% of the cost to non-members.

Now, if this kind of practice is unethical, elitist, or damaging to the public welfare, DrRich just does not see it. In fact, as much a benefit as this kind of practice might be to doctors, it is far more beneficial to the patients lucky enough to have such an option available to them.

You who aren’t so lucky should look at what Epiphany is offering – and demand it for yourselves. If you do, you will have it. There are thousands and thousands of disaffected doctors who would love to practice medicine like this, but they have been cowed to inactivity by the naysayers (and Progressives) with their cries of, “Elitist! Immoral! Unprofessional!”

If these doctors heard from their patients, all the negatives would be forgotten, and they too would have their own epiphany.

6 Responses to “An Epiphany On Direct-Pay Practices”

  1. DrRich,
    As always, a great and insightful piece. Thanks for the feedback on our unique practice model. For the first time in a decade, I actually feel like a doctor again, rather than a shill for the insurance company. The model has been well received locally, sort of like a concierge for the average Joe. We are currently working with the county homeless coalition and have donated a dozen memberships to the coalition to help the vulnerable. Free at last!

  2. Robert Cihak MD says:

    No, direct pay practice will not disappear when it becomes illegal, as DrRich described last year Medical practice will only go underground, as many other normal but illegal human activities have done and will continue to do, e.g., drinking alcholic beverages. For another example, some of the most private medical care ever occurred in the former Soviet Union, where it was totally illegal. It was so common that everyone, except foreigners, knew that it cost a direct pay ruble to get a clean towel in a Soviet hospital, and 100 rubles to see an actual doctor, if memory serves from the 8 pungent pages about the Soviet medical system in “Meltdown: Inside the Soviet Economy” by Paul Craig Roberts (Cato, 1990).

  3. Rich,
    Thank you very much for highlighting Dr. Shell and Dr. Gross and their innovative practice model which holds that the physician-patient relationship, in the very ethical traditional sense, is the most important and ultimately most professionally satisfying model for both parties…patient and doctor!

  4. Why would a Medicaid patient ever go to a direct pay practice? Indeed, if such a medical model were aimed at only the rich and famous, the uninsured, underinsured, and the great unwashed would never consider crossing the threshold. But there they are, sitting in Dr. Brian Forrest’s waiting room at Access Healthcare in Apex, N.C.
    Perhaps you have heard of Dr. Forrest? As one of the true pioneers of the low cost direct pay model, he opened his practice over ten years ago, not knowing whether he would be able to eke out a living or not. But he knew that he did not want to practice medicine like a hamster on a spinning wheel, and that he wanted a relationship with his patients, not an insurance company. And so he opened his doors to everyone, except the insurance companies and the government. Both his patients and he have benefited, including the Medicaid patients that have chosen to pay Access Healthcare rather than spend the $3 co-pay at the community health center.
    So many frustrated doctors have contacted Dr. Forrest over the past several years about how to escape their insurance-based prisons for the freedoms of the direct pay world that we formed Direct Pay Health, soon to be Doctor Care Direct. Our mission is to help PCPs practice medicine the way they dreamed of doing when they were in medical school, and we have developed the tools and experience to make it happen.
    But it is not concierge. Rather it is designed to broaden access for all of those under and uninsured. Come one, come all. The admission price is the same.
    Elitist? I don’t think so.

  5. BH says:

    I think this is a wonderful model and I agree that people who call it “elitist” have little insight on the topic and probably think Direct Pay/Insurance Free = Concierge. Which it does not.

    Downside is that Brian Forrest is about as narcissistic as they come. How does he have a “Cardiovascular Center of Excellence?” He dismisses all patients with bad numbers from his practice. He’s a jackass, but his business model is top-notch.

  6. Those that are highly critical of the direct-pay model, do not understand it. The current system allows Medicaid and Medicare recipients to demand the most expensive services around and forces tax payers and patients with private insurance to pay the bills.

    Personally, for the first time in my career, I have a high-deductible medical insurance plan forcing me to watch my family’s health care dollars. More and more families are in my situation which makes direct-pay services very attractive on numerous fronts. Direct-pay is NOT concierge and the rates are far more reasonable than the current rates.

    To fix the system, everyone needs skin in the game. I would revamp the Medicaid and Medicare systems completely and mandate a $5000 deductible per year. Realizing that most poor and elderly cannot afford $5000 a year, I would propose the government add $4000-$4500 / year (or even the full $5000) to the patients’ welfare / social security check that gets placed into a health savings account. As such, Medicare and Medicaid patients no longer have incentive to run to the ED for simple problems and will think twice before demanding that extra test. When patients are told that they need to be responsible for their healthcare spending, 50% of the problem would go away. This is not a panacea, but it is a start.

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