Cash for Doctors
Mar 25, 2013, Vol. 18, No. 27 • By TONY MECIA
With Obama-care poised to kick in to high gear next year, Dr. Brian Forrest routinely hears skeptics ask if the new laws and regulations will stifle his innovative primary care practice outside Raleigh, N.C.
The Weekly Standard has been checking in with Forrest since our May 24, 2010, cover story, “Cash for Doctors,” detailed how physicians were developing novel approaches to avoid the coming avalanche of new regulations and insurance mandates. Forrest’s practice, Access Healthcare, charges patients $39 a month, plus $20 per office visit, and offers a menu of additional low-cost services and tests. He doesn’t accept insurance, because he says it’s too much of a hassle and drives up his costs.
At the time, Forrest’s approach seemed to be paying off, but there were still plenty of questions about how the Affordable Care Act would affect his practice and those of other doctors seeking to steer clear of insurance bureaucracies and government decrees.
Now, though, Forrest and other doctors with similar business models say Obama-care is looking like a boon to their businesses, as people begin to realize what’s coming.
“I wasn’t in favor of the Affordable Care Act, but the effect is actually going to be very beneficial for our model,” he says. “People want to escape the train before it derails. There are a lot of doctors who don’t want to be trapped in the traditional system when it takes effect, and there are a lot of patients who don’t want to be trapped there, either.”
He says people ask him all the time whether Obama-care’s requirement that everyone have health insurance will siphon away patients. On the contrary, he replies. Roughly half of his patients have insurance, but they find it cheaper or easier to go to him than to deal with insurance deductibles and co-payments. As for his uninsured patients, he’s not sure they’re going anywhere, either.
“Anybody who thinks there will not be uninsured patients just because a law says there can’t be uninsured patients is not being realistic,” he says. The Congressional Budget Office last year estimated that 30 million Americans will lack insurance in 2016, even after the mandate takes effect.
In the three years since we first talked with Forrest, he has been busy. In addition to seeing patients, he has consulted with doctors who want to set up similar practices. He’s reached agreements with specialists and an online drugstore to offer price breaks to his patients. He’s spoken at conferences and is helping compile a directory of practices with similar business models, known as “direct primary care” or “direct payment.” (The latest list is available through his website, www.accesshealthcaredirect.com.) He has given interviews to Forbes and National Public Radio and trade publications. And he has started to work with companies and insurers who are looking for cost-effective ways to deliver care amid all the upheaval in the industry.
Direct pay practices account for only a small fraction of all doctors’ offices, and they seem to be most common in primary care. Forrest says the model also works for outpatient specialists, such as rheumatologists and neurologists. (He dreams of opening a flat-rate hospital that charges $500 a day—including surgery, room, and board—but acknowledges that’s at least a decade away.)
But the direct-payment model is gaining traction. A report last year by the consulting firm Accenture predicted that as many as one in three independent primary-care practices will eventually adopt subscription-based care models, “and this trend will increase 100 percent annually for three years.” The report did not estimate the number of such practices, but included examples from all over the country: from Leesburg, Va., to Portland, Ore., to San Francisco. It said doctors have been experimenting with different approaches and pricing structures, from bare-bones practices charging $60 a year to “concierge” plans that, according to Forrest, offer round-the-clock “presidential medical care in your residence, jet or yacht.” Those plans can cost a princely $30,000 annually.
Dr. Erika Bliss, who helped start Qliance Medical Group in the Seattle area in 2007, says patients are more open to exploring alternatives than ever before. “The idea was slow to catch on, but with the recession and health care reform, there is a general public understanding about making changes,” says Bliss, the company’s chief executive. “People are a lot more open to innovative models of care delivery than they were a few years ago.”
Qliance runs four offices in the Seattle area and charges a flat fee between $54 and $94 per month, depending on the patient’s age, in exchange for unlimited doctor visits.