Practice Models (Part I): Say Goodbye to Insurance Companies

February 1, 2007
Lance Carroll, MD

Have you been dreaming of a different way to practice? One Texas physician explains how his unique no-insurance practice model works for him - and his patients.


I was raised in West Texas. In those parts, wisdom means keeping things simple. That’s not what was happening in my traditional family and internal medicine practice. Decreasing reimbursement, preapprovals, preauthorizations, increasing federal regulations, third-party hassles - none of it was straightforward. So I quit. And started a cash-only practice instead.

I am happier than ever, but getting to simple was not, well, simple.

Making a choice

I first had to come to terms - really - with what I wanted from my life and my medical practice. Seems easy. But as you know, long nights in the hospital, long days in the clinic, and harried jaunts to the nursing home make introspection difficult.

I struggled for a long time, trying to make my managed-care-focused practice work. I listened to patients and policed my accounts receivable. I just figured it was a personal thing; maybe I needed more time than other physicians. I tried to take back the time I needed, but no matter how I juggled things, there was never any time left to handle difficult situations with the grace I wanted, personally or professionally.

I knew what a country doctor looked like, and it wasn’t this. My life just wasn’t what I wanted it to be.

But it wasn’t until my father’s death that I decided to actually do something about it. His homespun morality echoed in my ears, and I felt even more keenly that I had better make the most of my life, starting now.

Starting over

In 2000, I founded Colorado River Family Practice, and in 2004 I began to transfer to my current practice model.

Now my practice has a very limited, set number of patients, so we can do flexible scheduling and home visits. We do not have any managed-care contracts. Instead, we charge a monthly service fee. The fees are auto-debited from patients’ checking accounts or credit cards.

It took a while to come up with fair pricing. We’ve ended up with four levels of service: green, blue, silver, and gold, starting at $35 a month.

This isn’t a “concierge” practice. I charge considerably less than most of those. Why? I don’t want to exclude anyone. Patients who want to give me a tip, or pay more, do so. There is no sense of entitlement from me or from my patients.

Patients choose the level of service that best fits their needs. I set prices based on cost of living in the area and the number of hours a week I want to work to serve patients at each level.

We have set a limit on the number of people we treat at each service level. Each category closes when it is filled. Twenty percent of my patients are pro bono - primarily elderly and disenfranchised patients left over from my previous practice.

Since we don’t bill managed care, our overhead and prices are low. I don’t retain any billing personnel. Medical record upkeep is easier since we have fewer patients. I have just one staff person who acts as a receptionist and helps triage phone calls. Patients quickly learn how to obtain the services they need using the least amount of ancillary staff time. I enter my own charges, or I have my assistant do it. We need a trim staff to make this model work financially.


Each existing patient gets my home number, some even get my cell number, and all can reach me online. So my office telephone number isn’t listed in the local directory.

But it’s important to me to be able to add new patients in a controlled manner. We primarily reach new patients through word of mouth. Patients are usually introduced to the practice via our Web site, www.austinmed.net, and not the telephone. They e-mail me, and before they even show up at the office, we have planned out the visit and are prepared for the care they require.

Handling expectations

One of the hardest parts of making this transition has been changing the expectations of patients, payers, and even myself.

My practice shrank by 90 percent, and I had to help many patients find other doctors who would best work for them. Patients who needed to change physicians were confused. Sometimes they thought I was making a personal decision not to see them or that it was about them. It wasn’t.

On the other hand, the community as a whole appreciated my taking a stand against this increasingly nonsensical healthcare system. It brought an entirely different group of patients to my office, people I didn’t even know existed.

I also struggled with payers. The insurance companies pounded their chests at every turn, vying for my attention. Trying to understand their legal verbiage consumed a great amount of my time. I sent multiple letters to multiple departments to make them take me off their lists. Afterward, within the community, my practice was confused with an “indigent” clinic, because many people wondered why someone with insurance would go to a doctor who doesn’t accept insurance.

After substantial mental and spiritual work, I decided to take a cut in pay for the first year to rest and understand the path I was undertaking. I am working 70 percent less than I was in my traditional practice. My salary is lower because I want to keep my life simple and work less than full time. It will increase as I want it to; right now I am busy enjoying my new life. The model works because for each patient I see, I receive double the reimbursement I used to. My revenue is 38 percent less than it once was, but my overhead is 60 percent lower.

In the end, I am content. There is a way not to get burned out, hold onto the courage of your convictions, liberate yourself and your patients, and deepen your soul in the process.

Lance Carroll is a family practice physician from Bastrop County, Texas. He can be reached via editor@physicianspractice.com.

This article originally appeared in the February 2007 issue of Physicians Practice.