Concierge Medicine: The Cash-only Solution to a Successful Practice

“Atlas Shrugged,” the 1957 novel by Ayn Rand, explores a dystopian United States where many of society's most productive citizens refuse to be exploited by increasing taxation and government regulations. The novel poses the question: What would happen if Atlas (representing the minds that drive society's growth and productivity) grew tired of holding up the world, and simply “shrugged” instead? Rand poses that a world in which the individual is not free to create is doomed. That civilization cannot exist where every person is a slave to society and government, and that the destruction of the loss of profit motive leads to the collapse of society.

In a playful nod to Rand, “Atlas MD,” is a concierge medical practice which has indeed “shrugged.” Featured in the December 3, 2012 Bloomberg Businessweek cover story by Devind Leonard, “Atlas MD” is one of many of a growing number of "cash-only" practices, run by physicians Josh Umbehr and Doug Nunamaker which does not accept government or traditional insurance plans, (although two-thirds of their actually patients have insurance) .

While concierge practices used to refer only to high-end practices for the wealthy, more and more, "cash-only" practices provide affordable primary care at reasonable rates, which at the same time, provide a more holistic approach to care. This leads to a more satisfying practice for physicians, many of whom are tired of being exploited to prop up a failed insurance model.

In eschewing government and managed-care programs, "cash-only" practices have also shrugged off liability under Stark Law, the Anti-kickback Statute, the False Claims Act, the Civil Monetary Penalties Statute, and the Exclusionary Statute; no more RAC audits and no more sweating CPT Code chart documentation. Most importantly, no more endless phone trees waiting for approval, or second-guessing from medical students moonlighting as managed care “medical directors.” In fact, concierge primary-care physicians report the same level of income from seeing as few as 400 patients. While conventional practices require an average of four staffers to deal with insurance company headaches, "cash-only" practices require none.  

Leonard’s Bloomberg article reports, “There are 4,400 concierge doctors in the U.S., 30 percent more than there were last year, according to the American Academy of Private Physicians, their professional association. ‘This is all doctors want to talk about,’ says Jeff Goldsmith, a health-care industry analyst and trend spotter." According to the article, more and more doctors report the sentiment, “I want to go off the grid. I’m done billing Blue Cross. I can’t deal with this anymore. It’s destroying my life and my relationship with my patients.”

Statistics support the frustration. According to Bloomberg and Leonard, “[i]n 2011, the average American medical practice spent $82,975 per doctor dealing with insurers …that same doctor has 3,281 active patients over a three-year period.” Further, the physician rarely has time to see them for more than a few minutes. The attraction of concierge medicine for the physician isn’t hard to fathom: They can winnow down their patient roster, spend more time with each, and do away with insurance-related headaches.

Critics worry that all isn’t well with the "cash-only" alternative. To many, there is something un-American about refusing to accept the governments’ below-cost reimbursement scheme. They argue "cash-only" practices will lead to a shortage of primary-care physicians, because the model “become[s] more enticing in 2014 when the Affordable Care Act’s individual mandate requires everyone to be insured,” Bloomberg reports. “The law will enable 30 million previously uninsured people to get coverage through an expansion of Medicaid. They’ll need primary care, but it’s not yet clear who will give it to them.”

But in a very real way, it is the very essence of American ingenuity to identify a problem, and come up with a free-market solution.

Finally, shrugging off Medicare isn’t as easy as simply deciding one day that you will no longer accept government patients. As with anything the government does, there are complex sets of rules, which we covered earlier this year in this blog.