Brian Forrest, MD

Feel like you can't do the traditional fee-for-service insurance practice model anymore? Here are several examples of new models in primary care that may the answer for you:

Some physicians have realized that they can no longer afford the office-based costs of utilities, staff, storage, and equipment. Well, who pays the nurse who brings a medicine for your patient in a nursing home? The nursing home. Who pays for the desk you sit at and the fax you use at a nursing home? The nursing home. Get the point? Many physicians who have robust nursing-home patient bases have found by traveling from facility to facility, and never seeing patients in an office, they can substantially reduce their overhead. Imagine having a geriatric practice where instead of seeing 25 to 30 patients in the office every day, you are seeing maybe 10 patients per day in a skilled nursing facility environment - and making the same income or more!

Concierge practices offer benefits to both the physician and patients: because physicians have a lower patient volume there's more time to spend with patients, which tends to improve quality of care. The problem with concierge practices is that for many patients they are unaffordable, so access to this quality care is still a problem. Also, if every physician was to work in this model, the physician shortage would be much worse due to significantly smaller patient panels.

Similar in concept to the nursing home model, physicians who practice the house call model literally see patients wherever they are. Some physicians will schedule appointments at the patient's place of work, some at the patient's house, and some at hotels. The idea that you don't need a brick-and-mortar office - sans utilities and traditional expenses - to practice medicine is not new. Many physicians back in the "Doc Baker" days practiced this way. If they did have an office it was just a place to store equipment and medicine. One group in North Carolina, Doctors Making House Calls, has been very successful in recruiting physicians to work in this model. A big draw is the ability to make a good income, while maintaining a lower patient volume. However, there are some drawbacks: Many office-based procedures would be difficult to perform without equipment, furniture, or supplies that are not portable via car. Home facilities sometimes are not equipped with all of the necessary fixtures that are needed for certain scopes of practice. And, chaperones may need to accompany the physician on home visits with patients of the opposite sex, as a liability precaution.

Many employers are realizing that they suffer significant economic losses from reduced productivity for employees who call out sick. Many employees take a whole day off just to be certain they can go to their physician appointment and have enough time to wait and be seen. Many employers are establishing health clinics at the workplace. These clinics allow patients to "walk" to their appointments, and often, to be seen on the same day - without having to miss any significant amount of work. Also, many of these onsite clinics are very prevention focused, offering ergonomic training, vaccination clinics, and wellness fairs and screenings to help detect and prevent disease. While some employees are concerned about "lack of confidentiality," most appreciate the convenience. The major drawback here is patient choice of provider; usually there are only a few healthcare providers staffed at these onsite clinics.



In this option, which is near and dear to my heart, patients or their employers pay the healthcare providers directly for their care. Without the bureaucracy of filing, appealing, and collecting insurance payments, overhead can be dramatically reduced. This allows for longer visits and significantly lower out-of-pocket costs for those patients without insurance, It also works well for those with high deductible plans. The Affordable Care Act specifically singles out these types of direct-pay arrangements as nullifying the patients ' duty to buy a sanctioned plan under the mandate since the arrangements can be included in health insurance exchanges. Since physicians see a normal-sized panel, but with longer visits and no need for "milling volume," there are the same benefits as a concierge model for the physician and patient in terms of quality of care. However, since out-of-pocket costs are actually less, this model does not create a financial barrier for patients, where traditional concierge models can. Also, if overhead is kept low, and collections near 100 percent, physicians can expect higher than normal incomes without the need to be on the "patient treadmill."

The patient-centered medical home care model came out of the work done by the Future of Family Medicine Project, and has become synonymous with the "ideal" primary-care medical practice. However, the term is not mutually exclusive of other care models, which could also become patient-centered medical homes. This model accomplishes two goals well. First, it modernizes practices and causes system- based reforms like referral tracking, coordination of care, and a more efficient use of EHRs. However, many of the national pilot programs have not been wildly successful in improving outcomes or reimbursement, just yet. While some insurers are offering incentive payments to help bolster reimbursement, payment reform has to follow that adequately compensates for the economic and time investments made by practices to accomplish this evolution. Regardless, this is an important movement and will help modernize and streamline the traditional primary-care practice.

 is the founder of Access Healthcare, Direct Pay Health, and Physician Care Direct. He serves as an adjunct associate professor at UNC Chapel Hill School of Medicine where he teaches a class called "New Models of Care." He can be contacted at 

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Feel like you can't do the fee-for-service practice model anymore? Here are several examples of new models in primary care that may the answer for you.

New Primary-care Models Can Change the Way You Practice Medicine

It used to be that when you went to see the doctor you paid your bill directly to the physician. If you were fortunate enough to have insurance, then you sent a copy of the physician's bill and receipt to the insurance company for reimbursement. Sometime in the late 80s that changed. At some point physicians assumed the overhead of filing insurance claims and took over the responsibility of payroll for employees who used to work for the insurance companies.

Now, with every modifier, ICD code match, and E&M code, physicians are spending most of their revenue on billers, coders, and personnel (or services) needed to file insurance claims. How did we ever get hoodwinked into assuming insurance-company overhead just to get paid for the services we provide?

However, things are starting to change. Now, with increasing pressures from payers, patients, and government agencies, physicians are beginning to "just say no" to the bureaucracy of filing reimbursement claims.

I am going on my 10th year as a physician practicing in a direct pay model of care, and I can tell you the benefits are too numerous to ignore:

• More time for patient care (30 to 45 minutes on average);
• Better quality of care (we are in the top quintile for almost every commonly measured patient outcome); and
• Access for the underinsured (with up to 80 percent off standard pricing for primary-care services).

And all of this accomplished with complete price transparency. Isn't that what we really need in health reform anyway?

Several new models of care have emerged over the last few years due to increasing demands on physician time, lower payments, and higher overhead to practice. Some physicians have gone to house-call-only practices to eliminate their swollen overhead. Others have gone to nursing-home-only practices where they literally drive from facility to facility to provide care. Concierge practices have emerged that charge premium fees for improved service.

All of these new models have some advantage over the traditional system. But they also have their drawbacks. House-call-only physicians tend to have much smaller patient panels and thus, they exacerbate the primary-care workforce shortage. Concierge practices often charge too much for the average person to be able afford out of pocket.

So, where does a low overhead, direct pay practice fit in? It offers the advantages of longer visits, higher quality care, and greater physician satisfaction that are also seen with concierge practice. And, it offers the low overhead that is associated with the "no office" practices. The key difference is that it is available for the average or low income patient, not just for those who can pay hefty annual fees that can run over several thousand dollars per year. This means that this mode of practice can be adapted to various geographic regions, and a broad demographic, while not depleting the physician workforce - since the patient panels are comparable to traditional models.

How do you do it? There are several key aspects that are vital to success in a direct pay practice:





If you are thinking about getting away from the world of complex coding, recovery audits, and high-volume patient days where you cannot seem to catch your breath, then this might be the model for you. Some physicians are concerned about this type practice working in their area and this is the most common question I get: "It looks great for physicians and patients, but will it work in my (small/rural/inner-city/low-income) area?"

It can work in most any area where patients want affordable, quality care. I have homeless patients who come to me because they say "it is the only practice I can afford to come to." I also have wealthy patients who also come to my practice because they tell me "Dr. Forrest, I cannot pay a physician in my area enough to spend the amount of time that you do with patients." One day I looked out in my waiting room and saw both of these patients sitting next to each other. I felt great - because I knew that they were both getting BMW care at a used-Toyota price.

 is the founder of Access Healthcare and Direct Pay Health. He serves as an adjunct associate professor at UNC Chapel Hill School of Medicine where he teaches a class called "New Models of Care." He can be contacted at 

*If you are interested in further researching a direct pay model of practice, these articles are a good place to start:

, 5/20/10)
Cash Only Physician Practice (

, 4/26/10)
A Call to Arms for Doctors ... and Patients (

, 4/6/10)
How to Run a Cash Only Practice and Thrive (

, 9/30/09)
The Real Costs of Insuring Routine Medical Care (

, 5/23/09)
IdeaLab: Cash Only Practice Still Works (

, 7/08)
Healthcare Reform: Voting for Change (

, 2008)
Breaking Even on Four Visits per Day (

, National Public Radio, 3/19/07)
NC Doctors Offer New Services (

, 6/14/06)
2,500 Cash Paying Patients and Growing (

Are you frustrated and overwhelmed by the need to employ a large staff dedicated to processing and submitting insurance claims?  Maybe you should consider the direct pay model of care.

Direct Pay - Something Old is New Again

Ten years ago no one thought it could work. Not taking insurance, not being in any PPO networks, refusing to make the burden of insurance filing overhead my own, I opened my cash and carry practice on April Fool's Day almost a full decade ago.

I had seen the strain on patients without insurance who could not afford to pay for simple follow-up visits or health maintenance screenings. I had witnessed firsthand the burnout of primary-care physicians working around me on a treadmill of widget production, trying to see enough patients each day to keep their doors open. I knew there had to be a better mousetrap.

After reading and researching various models of healthcare delivery, I spent about 18 months designing a practice structure that would address these problems. Uninsured patients had to somehow have access to discounted cash rates. Physicians had to be able to spend more time with patients and not feel like they had to run room to room.

What I have discovered over the years is that my innovation is really just a throwback to 50 years ago. Patients once paid their physicians directly, sometimes with cash, sometimes with chickens, sometimes with seed. A doctor's office usually had only one staff person at that time. That person did not have to submit insurance claims, appeal rejected claims, or worry about proper coding and modifiers. They helped the physician check patients in and out and assisted with procedures. Wouldn't it be nice to go back to that simpler time? Well, that's exactly what I did. By shunning all insurance contracts, permanently opting out of Medicare, and integrating modern technology with the simplicity of the past, I created a low-overhead, direct-pay practice model.

Ten years later we have about 6,000 patients in our micropractice. We save uninsured patients about 85 percent overall on their outpatient healthcare costs through reduced fees. We have been identified as one of 28 Cardiovascular Centers of Excellence in the United States. Our outcomes measures such as HgbA1C, average LDL, and percent of patients at their blood pressure goals are in the top 10 percent nationally based on audits done as part of a CQI program conducted by COSEHC and evaluations done by fourth-year UNC Chapel Hill medical students participating in a "New Models of Care" elective.

The big surprise to me is that 53 percent of our patients have traditional insurance. I anticipated an almost entirely uninsured clientele when I opened, but word of mouth about short wait times and hour-long office visits made insured patients in our community envious of those treated at our office, and so they came. It turns out that most patients value the attributes of a direct-pay practice more than the hassle of filing their own insurance. Medicare patients frustrated with not being able to find a physician accepting new patients or with the patient mill they have experienced in the past have come in droves. They find that paying the physician directly gets them more time, more attention, and a better medical experience. They sign their private contract and find that their out-of-pocket cost for the year is similar if not less than what it was when they saw a Medicare provider.

Skeptical? Here's some simple math: If a patient has Medicare Part A and Part B and no supplemental insurance they are responsible for 20 percent of the bill. Remember, I said our rates are 85 percent less than typical fees. This means with no supplemental insurance our patients might save 5 percent. Moreover, look what Medicare saves, as it has never been billed for any of the 10,000-plus Medicare-eligible visits to my practice. If there were 1,000 practices like mine, Medicare might be solvent again.

Patients can either pay a la carte from a posted menu of services in the waiting room or they can pay $29 per month and $20 per visit. On the a la carte menu, the most expensive visit is $49. Ancillary services such as labs, splints, and injections are charged at nominal fees like $25 to $36. Patients can actually add up their own bill before they are seen if they know what they will need.

For those that pay monthly, we give them an "Access Card" that allows them to come in whenever they want for a typical overhead charge of $20 that includes most ancillaries and labs. The idea is that patients are paying their provider directly each month for managing their healthcare. That becomes the profit. When they actually use services, we simply make sure that their charge covers our overhead associated with that visit. This means that if you have 1,000 patients paying you $29 per month for your services, and if the per visit fee is just enough to cover your overhead, then your take-home salary is a reasonable $348,000 per year and your salary is no longer volume dependent. If you want to look after 2,000 patients you could probably handle that, too.

The one criticism I get most often is that "concierge practices like ours" cater only to the wealthy and that if everyone practiced this way the physician shortage would be even worse. Such criticism of concierge practices is valid, but those criticisms do not describe our model. In concierge practices, the management fee, or annual fee, or executive physical fee is typically over $1,000 per year - and in addition to that annual fee, most concierge practices continue to bill insurance or Medicare.

We have never had a patient spend over $1,000 out-of-pocket in a year. On average, a hypertensive, diabetic, hyperlipidemic patient normally spends around $500 per year for all of their care with us. That usually includes a comprehensive physical with an EKG, quarterly labs like HgbA1C, lipids, and metabolic panels, and on average five 45-minute to 90-minute visits per year. So, we are not concierge, although from a physician and patient standpoint we have many of their benefits.

The key to making a direct-pay model work is keeping overhead low. If you are charging 85 percent less, then your collections need to be near 100 percent (99 percent for us) and your overhead needs to be much lower than the traditional 50 percent to 60 percent. My practice overhead was about 25 percent last year. There is a lot of planning and efficient use of resources that goes into that.

Among the essential efficiencies is staffing. We have two physicians, one full-time nurse practitioner, and one full-time and two half-time medical assistants. Essentially we have 0.66 FTE per provider instead of the normal 4.5 and that is the key to keeping the overhead down. For someone who is solo, they would need one full-time medical assistant and that's it. No coders, no billing clerks, no office manager, no RN, no receptionist (the medical assistant does that). That's how you can break even with overhead seeing only four patients per provider per day.

What about the Patient-Centered Medical Home model and the Idealized Practice from the Future of Family Medicine Report? Our practice model is an example of both. We use a CCHIT-certified EHR, referral tracking, registries, care coordination, continuous quality improvement, practice redesign, patient satisfaction surveys, electronic patient communication and reminders, and most of the other features that help ensure a patient-centered practice that is financially viable. Best of all, our model is sustainable since it is immune to the whims of payers. The PCMH model is not mutually exclusive of direct pay. They coexist quite nicely. Ideally, every primary-care practice should be a medical home, because that really does offer the highest quality cost-effective care. However, practices implementing the PCMH model in a traditional payer environment are going to continue to be challenged unless real payment reform that rewards the model comes to pass.

In a world of Medicare RAC audits, Red Flag rules, stagnant reimbursement, and the certainty of further Medicare/Medicaid cuts looming, physicians are looking for a way out of the current complex system into a new practice model-world where the doctor-patient relationship is at the core of healthcare again rather than the third-party payer.

The future of the direct-pay practice model is bright. It may become the main source of care for patients who want quality, affordable, accessible, and transparent healthcare.

is an adjunct associate professor at the UNC Chapel Hill Department of Family Medicine where he teaches an elective class called "New Models of Care." He is the founder of Access Healthcare, a COSEHC Cardiovascular Center of Excellence. He is also president of 

, a Web site dedicated to helping physicians explore the direct-pay practice model. Currently, he serves as president-elect of the North Carolina Academy of Family Physicians. Dr. Forrest may be reached at 

This article originally appeared in the January 2011 issue of Physicians Practice.

The future of the direct-pay practice model is bright. Here's how it works, the affect on patients, and where it fits with models promoted by healthcare reform.

Cash and Carry Healthcare Has Evolved


I’m often asked how I can afford to keep charges so low at my primary-care practice. The answer is simple. Only the administration of primary care is expensive, not its provision, so I keep charges low - for example, I can take care of a chronically ill, hypertensive, hyperlipidemic, diabetic patient for $25 per month and $20 per visit - by refusing to deal with healthcare’s primary creators of administrative costs: insurance companies. My overhead is low, so my services are cheap, which makes it possible for middle- and low-income families (including some who are insured, and others who are not) to afford me. 

You might remember me from the June 2007 issue of 

, when I first told you about my practice, Access Healthcare in Apex, N.C. (Read the original article “

I still get a lot of questions about how it’s possible for me to run a cash-only practice in a middle-class town. (Apex is a suburb of Raleigh, where median household income is about $71,000 and median home value is $208,000; those figures are above-average for the state, but hardly wealthy.) I thought it would be useful to tell you how things have been going in the last 14 months. 

One fast-growing aspect of my practice is the “Access Card” discount plan. The idea is simple: Patients pay $300 a year for a card and $20 per office visit, which includes labs and any in-office testing. This means that a typical patient who comes in for a complete physical, four follow-up office visits with lab work, and a sick-visit will spend $420 for a year’s worth of primary care. 

Compare that to the average $700 that Americans are spending yearly just for health insurance premiums ($3,300 per family), which does not include copays, deductibles, or employers’ contributions. Something does not add up. Primary care is the most cost-effective way to keep people healthy, yet most healthcare dollars do not go to the average primary-care physician. 

Many physicians are skeptical of my Access Card program. They say, “Don’t you lose money on that?” On the contrary, I do quite nicely. Consider a typical primary-care physician with a modest panel of 2,000 patients. Now suppose each of those patients paid $300 a year for the physician’s services. That comes to $600,000 a year in revenue before the first office visit is made. If your overhead is low (like mine, at 25 percent), you would clear $450,000 per year. That’s a lot more money than the average primary-care physician makes.

Our overhead is exceptionally low because we do not file insurance and only have one staff person for every two providers. But even if your overhead is 60 percent, you would still make $240,000 per year if you had 2,000 patients each paying you $300 a year. We accomplish this with no billing, no accounts receivable, and it only costs our patients $25 per month, a real deal in terms of out-of-pocket healthcare expenses. 

You might be thinking that only uninsured patients would come to see me, to gain access to affordable primary care. Why, you might ask, would 

patients pay me $300 on top of their own insurance premiums? In fact, about 42 percent of my patients have traditional insurance through their employers; another 10 percent are on Medicare. They see me anyway, because my $20 per visit fee is slightly less than their in-network copay, and it often includes lab tests that their copay does not cover, so they still save money. 

About 30 percent of my patients are uninsured. Another 15 percent don’t have conventional insurance but have heeded my advice to purchase high-deductible, low-premium plans with health savings accounts to cover any unforeseen hospitalizations or catastrophic costs. What they save in premiums with this type of insurance plan generally more than makes up for their Access Card fee, and they actually spend a lot less out-of-pocket in a year than if they bought a traditional PPO plan with a copay. 

Mine is not a “boutique” or “concierge” model. Those titles belong to practices that charge exorbitant fees to provide special service for the wealthiest patients. Nor is my Access Card program insurance. It is important to point out to patients that it is just a prepaid discount and does not give them any medical benefits other than decreased fees at our office. 

Our model is expanding quickly. Over the last year, I have helped more than 20 healthcare providers around the country in their efforts to go cash-only. My goal is to continue to free healthcare providers from the shackles placed on them by managed care, which I believe will improve care for patients. As I tell my patients, their healthcare is between them and me. It is very liberating to have the unwelcome third party out of the physician-patient relationship. 

I have also offered an Access Card program to local employers. Self-insured employers’ premiums are affected by utilization. If they use Access Cards for their primary care, then that decreases utilization (since it is not billed to insurance). What the employer saves in premiums more than covers the $25 per-employee per-month fee. 

Employees that normally have a $25 to $35 office copay actually save money by only paying $20 at our office. One of the companies that we have offered this to has about 500 employees, and stands to save enormous amounts of money. This type of direct-provider contracting bypasses the insurance company and cuts out the middleman. The employees still have their insurance if they are hospitalized or have surgery, or incur other large costs not covered by the Access Card. But their primary-care cost is greatly reduced by having their employer pay the practice directly. 

I am now considering opening some extended-hours clinics that will be flat-fee based so that patients have the ultimate in price transparency. I am considering calling this the $50 Clinic. That’s right, everything is $50. This would be the modern healthcare iteration of the retail concept of fixed-price stores. (You’ve heard of “dollar stores”?) This means that patients would know what to expect, and the costs for this type of after-hours access could be a bargain for those with and without insurance. 

Perhaps in another year, I’ll let you know how 

an adjunct assistant professor at UNC Chapel Hill, is the founder and president of Access Healthcare and a practicing family physician in Apex, N.C. He can be reached via editor@physicianspractice.com.

This article originally appeared in the July/August 2008 issue of Physicians Practice.

Family physician Brian Forrest on how his cash-only practice works for him and his patients.

Author | Brian Forrest, MD

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