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Are Cash-Only Medical Practices The Wave Of The Future?

MedPage Today issued a special report on a rising trend: cash-only medical practices. I guess I’m ahead of the curve, since I’ve been seeing a cash-only primary care physician for 2 years now – and I love it.

Dr. Alan Dappen is available to his patients 24 hours a day, 7 days a week, by phone, email and in person. Visits may be scheduled on the same day if needed, prescriptions may be refilled any time without an office visit, he makes house calls, and all records are kept private and digital on a hard drive in his office.

How much would it cost to have the luxury of a personal physician on-call for your every whim?

Would you believe only about $300/year?

What’s Dr. Dappen’s secret to success? He accepts no insurance, keeps his overhead low, offers full price transparency, has physician extenders who work with him, and charges people for his time, not for a complex menu of tests and procedures.

“I believe in doing what is necessary and not doing what is not necessary. The healthcare system is broken because it has perverse incentives, complicated reimbursement strategies, and cuts the patient out of the billing process. When patients don’t care what something costs, and believe that everything should be free, doctors will charge as much as they can. Third party payers use medical records to deny coverage to patients, collectively bargain for lower reimbursement, and set arbitrary fees that reward tests and procedures. This creates a bizarre positive feedback loop that results in a feeding frenzy of billing and unnecessary charges, tests, and procedures. Unlike any other sector, more competition actually drives up costs.”

After building a successful traditional family medicine practice in Fairfax Virginia, Dr. Dappen felt morally compelled to cease accepting insurance so that he could be free to practice good medicine without having to figure out how to get paid for it. He noticed that at least 50% of office visits were not necessary – and issues could be handled by phone in those cases. Phone interviews, of course, were not reimbursable by insurance.

“The physical exam is a straw man for reimbursement. Doctors require people to appear in person at their offices so that they can bill for the time spent caring for them. But for longstanding adult patients, the physical exam rarely changes medical management of their condition. It simply allows physicians to be reimbursed for their time. Cutting the middle man (health insurance) out of the equation allows me to give patients what they need without wasting their time in unnecessary in-person visits. This also frees up my schedule so that I can spend more time with those who really do need an in-person visit.”

Health insurance is certainly necessary to guard against financially catastrophic illness. And the poor need a safety net beyond what Dr. Dappen can provide. But for routine care, “concierge medicine” can make healthcare affordable to the middle class, and reduces costs by at least 50% while dramatically increasing convenience. For the right patient, this is a welcome relief from having to wait to be seen by in-network providers or from being billed non-preferred rates as an uninsured individual. I applaud Dr. Dappen for his efforts in healthcare reform, and look forward to a movement where costs are driven down by putting patients back in the payer seat.

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One Response to “Are Cash-Only Medical Practices The Wave Of The Future?”

  1. garyl1 says:

    Sounds like a great system, out of the box.   What reaction do you think the medical board would have if  you records did not show a physical examination for your telephone consults.

    Have you had any legal advice regarding these ‘non-standard’ protocols.

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