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My Best Idea: Cash and Carry Healthcare


Brian Forrest, MD, explains how he got happier - and wealthier - by dumping insurance payers.

Frustrated with the prospect of having to see 30 to 45 patients per day, in 2001 I started looking for alternative ways to run a medical practice. I read articles from publications such as Physicians Practice, studied reimbursements, patient flow, and billing with practice managers, and decided there might be a better way.

Five years ago I opened a “cash, check, or charge” practice with the idea of decreasing my patient volume while providing a place for the uninsured to receive quality care.

At the time, I assumed that most of my patients would be uninsured and that my salary would be less than average due to reduced fees and volume. However, the shock has been that not only did I not see a pay cut, I actually do much better than average in this model. Because of low overhead (about 25 percent) and an extremely high collection rate (more than 99 percent), we actually net a higher profit than the average practice. By seeing 16 patients per day, one provider can easily make in excess of $200,000 per year.

The most amazing thing about it is that the patients are charged, on average, 50 percent to 80 percent less than they would be charged at a typical office for the same services. For example, the charge for a 99214 has been $45 for four years, as have all other office visits. The average charge for a 99214 in my region is $124.20, according to the Physicians Practice2006 Fee Schedule Survey. Most lab prices have been $25, which represents a steep discount to those without insurance. Often those same labs in other offices are more than $75 each. 

Since we average about 1.5 tests per person, the average bill is around $82. Of that, $65 is net profit.

We offer open-access scheduling, which in our case means having eight appointments each day that have been filled in advance, and keeping eight slots open for walk-in and same-day call-in patients. This allows our patients to see us in a timely manner for acute problems and keeps them out of the ER and urgent care centers.

We do housecalls charging between $100 and $150, depending on the distance from the office. This builds continuity and provides a valuable service to the homebound. It also adds to the bottom line since the overhead for housecalls is usually even lower.

We also use prepaid discount cards that allow a patient to pay $25 per month through the online service PayPal with an automatic credit card deduction, or to pay $300 up front. For patients who have the discount card, we charge only $20 for an office visit, including basic lab work. Someone with an access card, then, could get a complete physical with all blood work and a Pap smear for $20. This has been a popular option as a private contract for Medicare patients. Patients with high-deductible insurance plans also like it because it limits their out-of-pocket expenses, typically to less than $400 per year.

We are not a concierge practice in which patients would be charged more for a greater level of access and special services. We charge patients less - 50 percent to 80 percent less, on average - than a traditional practice. This provides improved access for the uninsured. Yet because of the improved efficiency that comes from cutting out insurance middlemen, we have a healthier bottom line than most conventional practices.

Even more interesting, perhaps, is that our patient population is so diverse. Twenty-five percent are below the poverty level. Ten percent are multimillionaires who come for the added time and service they receive rather than the reduced fees. Ten percent of our patients are not American citizens. It really pleases me to look out into the waiting room and see a millionaire sitting next to someone who is considered working poor, knowing that both of them will get the best medical care I can provide despite their economic status.

As for recruiting patients, we have barely advertised in five years. Except for a small ad in the phone book and a few weekly ads and postcards in the first year, we have spent less than $500 per year on advertising. Word-of-mouth has built our practice. We have more than 3,000 regular patients, and in 2006 I was named Best Doctor in the Triangle region of North Carolina. Patients generally love the cash model, even the ones who have to file their own insurance.

Now we are opening SEED (Symbiotic Expansion Entity Development) practices in other locations in the Southeast. The first opened April 16 in Chapel Hill. In these practices, I show other physicians how to set up a successful cash practice, step by step. They retain control and ownership of the practice but structure their office around our model. Within two or three years I believe that many more physicians will find satisfaction and freedom in the ability to take off the shackles of the third-party payer. This will be beneficial to physicians, to patients, and to the healthcare system as a whole.

Brian R. Forrest 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 June 2007 issue of Physicians Practice.

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