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Transitioning to a Direct-pay Medical Practice: Page 2 of 3

Transitioning to a Direct-pay Medical Practice: Page 2 of 3

Here are some examples of what Dibble charges:

• $60 for an office visit;

• $30 for a sports physical;

• $65 for a tetanus shot; and

• $10 for strep test (an office visit or nurse visit is required).

Like most direct-pay practices, Dibble posts his fees on his website so they are accessible to patients. In addition, to show how competitive those prices are, he provides links to his competitor's fees.

Making it a reality

Despite competitive prices and the right location, it took some time for Dibble's practice to build up a sufficient patient population. That's because Dibble was building the practice from scratch, in addition to it being an alternative model. "I knew that the biggest way we would grow was by word of mouth, because in contrast to … the traditional model, we're not assigned by default," he says.

In other words, many patients select their practices because they are on their insurer's list of approved providers. Direct-pay practices, of course, are not on those lists. "People kind of have to actively choose to come here because they're paying out of pocket, so it takes a little while for people to realize, 'Hey, this is a better deal,'" says Dibble.

It didn't take long, however, for that realization to catch on. Since opening his practice, Dibble has gone from zero patients to about 800 patients, which he says is a "pretty good number," for a direct-pay practice.

Pleasing patients

A big reason for such rapid growth is because Dibble's patients recognize the value he provides, says Stacey Hartzell, Dibble's front-desk receptionist. "We have people that, even with insurance, will come here and pay out of pocket, because they know they're going to get to spend the quality time that they need to with the physician," she says, noting that Dibble's appointments typically last about 30 minutes, much longer than the 10- to 15-minute appointments in most traditional fee-for-service practices. "Here the doctor will spend time with them and go over whatever they need to go over."

Patients also appreciate the more personalized and smarter care they receive due to those longer visits, says Dibble. "We're not just quickly ordering lots of tests or prescribing medication, we're going through things a little more thoroughly and then deciding what's needed."

Reaping the rewards

It's hard to compare Dibble's practice revenue to a traditional fee-for-service practice because he is still dealing with the financial implications of opening a new business. Still he says, he's already noticing some positive effects.

For one thing, Dibble deals with almost no accounts receivable because his patients pay him at the point of care, which saves him time and resources. In addition, since he does not accept insurance, he can operate with fewer staff members. "In a typical practice they estimate three to four staff per full-time doctor, and I think you could operate with much less than that [in a direct-pay practice]," he says. In fact, he employs only one full-time receptionist and two part-time medical assistants.

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