I am (generally) a big fan of doctors experimenting with different forms of medical practices. Some doctors are sole proprietors and work mostly alone in their office. Years ago, I went to a doctor who did not accept insurance and would not make appointments. His office was small since he didn’t require a billing staff and was very efficient. His prices were transparent and quite low ($35 office call in 1993).
Another physician, this one from Northern Virginia, pioneered primary care consultations by telephone. Doctalker Family Medicine would do house calls, in-office visits and consultations by phone. Each service came with a different price tag. He did not accept insurance, but his office would help patients fill out an insurance claim form for a modest fee. Most of his consultations were by phone.
Some physicians practice direct primary care (DPC), where members pay a monthly fee of $100 to $150 in return for quick access and longer physicians visits. McKinney Family Medicine has both a DPC pricing plan and an Option B: Pay-As-You-Go plan.
Some physicians practice different styles of medicine from the same office. One bureaucratic where patients use insurance coverage and one competitive, where patients pay cash for services. This is from an archived article at the New York Times:
Dr. Donald Richey, a dermatologist in Chico, Calif., has two office telephone numbers: calls to the number for patients seeking an appointment for skin conditions like acne and psoriasis often go straight to voice mail, but a full-time staff member fields calls on the dedicated line for cosmetic patients seeking beauty treatments like Botox.
Dr. Richey has two waiting rooms. The medical patients’ waiting room is comfortable, but the lounge for cosmetic clients is luxurious, with soft music and flowers.
And he has two kinds of treatment rooms: clinical-looking for skin disease patients, soothing for cosmetic laser patients.
“Cosmetic patients have a much more private environment than general medical patients because they expect that,” said Dr. Richey, who estimated that he spent about 40 percent of his time treating cosmetic patients. “We are a little bit more sensitive to their needs.”
A patient calling to inquire about a cosmetic service may get a same day or next day appointment, while patients calling to have a mole checked may have to wait a few weeks. Why the difference? Because Dr. Richey is competing on price, value and other amenities for private-pay cosmetic patients. Those patients wanting a skin check or who have a suspicious mole are often expecting their insurance to cover the cost of care and are less desirable patients.
Cosmetic medicine is one of the few areas of medicine that are paid entirely out of pocket. My past research has found it is also the only area of medicine where prices have risen at the same rates as inflation (rather than health care inflation, that is three times consumer inflation). Another area of medicine where consumer prices are low and competitive is over-the-counter (OTC) drugs, because insurance does not generally pay for OTC drugs.
Cosmetic medicine appeals directly to consumers in the market for cosmetic services. Take the company Groupon for example: hardly a day goes by but what I get an email from Groupon that has offers for cosmetic medical services. That is never ever the case with any other kind of medical procedure. For example, on a recent day I received four Groupon emails. Three email offers were mostly health and beauty, while one was mostly consumer electronics. In one email 7 of 22 offers were cosmetic medicine, mostly dermal fillers and Botox. The second email had 11 of 23 offers that were cosmetic medicine related, while the third had 15 of 27 offers that were cosmetic medicine. By contrast, there were no medical procedures offered through Groupon that were not cosmetic.
There are some types of medical practices I don’t really care for. One is when hospitals acquire physician practices in order to bill higher hospital prices and capture service referrals (also at higher prices). Another is when private equity buys physician practices. It’s not that I have anything against private equity, but these investments tend to be in areas where patients have the least discretion. This includes such specialties as radiology, emergency medicine and anesthesiology. These are all examples of physicians patients rarely choose and rarely meet prior to care. Many private equity investments in medical practices are predicated on sky-high out-of-network charges and balance billing patients for the portion insurance does not pay as the “secret sauce” that made these investments immensely profitable in years past. The recent federal law, the No Surprises Act (NSA), made it much harder to balance bill patients for out of network physician services and rendered the business model of surprise medical bills largely obsolete. There is another concerned about private equity investments in health care. A recent article in JAMA found that private equity ownership is linked to higher costs, worse quality.