Doctors Who Don’t Take Insurance: What Does It Mean for Patients?

Doctors Who Don’t Take Insurance: What Does It Mean for Patients?


More and more doctors are fed up with private insurers.  It’s not just a question of how stingy they are, but how difficult it is to get reimbursed. Paperwork, phone calls, insurers who play games by deliberately making reimbursement forms difficult to interpret…

Some physicians have just said “no” to insurers.

What does this mean for patients? Business models vary. Some doctors charge by the minute. I recently read about a physician who punches a time-clock when the appointment begins. She has calculated that her time is worth $2 per minute. Fifty-nine minutes = $118.  Will you be paying cash, or by charge today?

Somehow, I think the meter would make me nervous. I suspect I might begin talking very quickly. But this is only one model.

Rather than charging by the minute, some doctors charge fee-for-service. In those cases, many physicians mark up their fees well beyond what an insurer would pay. But, they point out, they also spend more time with their patients. No one feels rushed.

A story in a New Jersey newspaper describes how physicians in Northern Jersey have begun following in the footsteps of “elite Manhattan doctors and are withdrawing from all insurance plans.” The article compares fees with and without insurance.  On the right, the fees that insurers typically pay for these services; on the left, the fees that Jersey doctors who don’t take insurance charge:

  • Mastectomy: $5,000 / $900Ruptured abdominal aneurysm: $8,000 / $1,800
  • Routine screening mammogram: $350 / $100
  • Initial neurological consultation: $400 / $100

Some Doctors Share Savings with Patients

Other physicians find that if they don’t take insurance, they can cut their overhead, and actually charge patients less.

Over at Revolution Health “Dr. Val and the Voice of Reason” tells how Dr. Alan  Dappen has set up his practice:

“He is available to his patients 24 hours a day, 7 days a week, by phone, email and in person. Visits may be scheduled on the same day if needed, prescriptions may be refilled any time without an office visit, he makes house calls, and all records are kept private and digital on a hard drive in his office.”

“How much do you think this costs? Would you believe only about $300/year?”

Dappen has stream-lined his practice. It’s not just that he doesn’t need an assistant to keep up with stacks of insurance paper work. In general, he keeps his overhead low, offers full price transparency, has “physician extenders” who work with him, and “charges people for his time, not for a complex menu of tests and procedures.”

The key is that Dappen practices very conservative medicine.

“I believe in doing what is necessary and not doing what is not necessary,” he says. “The healthcare system is broken because it has perverse incentives, complicated reimbursement strategies, and cuts the patient out of the billing process. When patients don’t care what something costs, and believe that everything should be free, doctors will charge as much as they can. Third party payers use medical records to deny coverage to patients, collectively bargain for lower reimbursement, and set arbitrary fees that reward tests and procedures. This creates a bizarre positive feedback loop that results in a feeding frenzy of billing and unnecessary charges, tests, and procedures. Unlike any other sector, more competition actually drives up costs.”

Dappen has it right about competition in the healthcare marketplace. Studies show that in areas where there are more hospitals competing with each other, hospital bills are higher. This is in a part because hospitals jousting for market share all invest the same cutting-edge equipment. The only way to pay for it is to use it. So they do more tests and more procedures, driving hospital bills higher.

Dappen, who practices in Fairfax Virginia, told Dr. Val Jones that “after building a successful traditional family medicine practice he felt morally compelled to cease accepting insurance so that he could be free to practice good medicine without having to figure out how to get paid for it. He noticed that at least 50% of office visits were not necessary—and issues could be handled by phone in those cases. Phone interviews, of course, were not reimbursable by insurance.”

Dappen also casts a skeptical eye on the pricey annual physical: “The physical exam is a straw man for reimbursement. Doctors require people to appear in person at their offices so that they can bill for the time spent caring for them. But for longstanding adult patients, the physical exam rarely changes medical management of their condition. It simply allows physicians to be reimbursed for their time.”

Again, Dappen is spot on, as Niko reported on HealthBeat here.

“Cutting the middle man (health insurance) out of the equation allows me to give patients what they need without wasting their time in unnecessary in-person visits,” Dappen explains. “This also frees up my schedule so that I can spend more time with those who really do need an in-person visit.”

How many readers have found themselves sitting in a doctor’s waiting room, not because they were sick, but because they needed to renew a prescription? Since insurers don’t pay doctors for the time it takes to read an e-mail or to take a phone call and then write a new prescription, many insist that patients come in whenever they need a renewal—that way, the doctor can bill the insurer. This makes sense if the doctor needs to check your blood pressure to see whether the medication is working. But if he’s simply going to chat for a few minutes and write the script, the visit is a waste of time.

“Health insurance is certainly necessary to guard against financially catastrophic illness. And the poor need a safety net beyond what Dr. Dappen can provide” Johnson observes. “But for routine care,” a practice like Dappen’s “can make heathcare affordable to the middle class, and reduces costs by at least 50% while dramatically increasing convenience.”

Concierge Medicine

Dr. Val calls Dappen’s practice “concierge medicine for the masses.” Other physicians practice more traditional “concierge medicine”: customized, round-the-clock care for the elite.

In California, the Ventura County Star reports that local doctors opting out of insurance “spend more time with patients—and make more money.”

Some doctors charge payments an annual “membership fee”—rather like the fee you might pay to belong to a country club.

“I wish I had done it a long time ago,” says Dr. Edward Portnoy. An internist, Portnoy once had a practice of about 2,800 patients. Now he sees roughly 380 people but takes home “about the same profit” thanks to the $1,800 membership fee that each patient pays yearly.

Portnoy spends roughly twice as much time with each patient as he did when he accepted insurance. He explains that he “has more time to do intensive physicals and help patients stay healthy, rather than running from one crisis to the next like a war surgeon doing meatball surgery.”

At Dr. Stanley Frochtzwajg’s family practice in Ventura, patients don’t face annual fees but pay “at the office for whatever services they receive,” the paper observes. “A routine office visit is about $80.” Patients are then given the paperwork to submit to their insurance companies themselves. “One patient said she ends up paying about 30 percent of the bill but is happy with her care and willing to pay for it.”

The paper reports that doctors “don’t really like the term ‘concierge’ or ‘boutique’ medicine. They prefer labels like personalized, preventive care.”

That’s understandable; they don’t want to sound snobbish. But in truth:  “There’s not a lot of people who can afford it,” says Anthony Wright, executive director of the consumer advocacy group Health Access California. “The reason some people call it boutique medicine is that this is for a well-to-do clientele.”

Wright is concerned:  “I don’t think systems that shift more burden onto the patients are the answer to our broken system or will evolve into more than an isolated alternative…The trend of boutique medicine sends the consumers in the direction of you’re on your own. Everyone for themselves.”

On the other hand, the paper notes, “Carol Miller of Thousand Oaks thinks the $3,600 she and her husband pay in annual fees to see Portnoy is worth it because it brings peace of mind. The money covers an annual physical and a battery of screenings for everything from Alzheimer’s to sleep apnea. The fee also covers follow-up that focuses on preventive care.

“There are other perks. People in Portnoy’s waiting room find a basket filled with Cliff bars, crunchy peanut butter and chocolate chip bars. Tea and Snapple is served.

Crunchy peanut butter and chocolate bars? Is this part of the emphasis on preventive care?

Some worry about what the larger trend means. Are the Millers, who receive an annual “battery of screenings” being overtreated? If insurers reimburse for even 70 percent of unnecessary treatment, are we all paying for boutique medicine?

Dr. Bob Gonzalez, medical director at Ventura County Medical Center, also talked to the reporter and confided that he worries “that less reliance on insurance means fewer people getting healthcare. They won’t be able to afford it.

“The specter of more doctors downsizing their practices and seeing fewer patients also alarms Gonzalez. It means patients won’t be able to find any doctors or could be dumped on an already overburdened doctor.

“So yes, he said, more money, less insurance and more time with patients may be good for individual doctors.

“But whether it’s good for society or good for patients is the overall question.”

Maggie Mahar is an award winning journalist and author. A frequent contributor to THCB, her work has appeared in the New York Times, Barron’s and Institutional Investor. She is the author of Money-Driven Medicine: The Real Reason Why Healthcare Costs So Much, an examination of the economic forces driving the healthcare system. A fellow at the Century Foundation, Maggie is also the author the increasingly influential HealthBeat blog, one of our favorite healthcare reads, where this piece first appeared.

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54 Comments on "Doctors Who Don’t Take Insurance: What Does It Mean for Patients?"

Jul 9, 2008

Often, patients complain to me about costs (and I take insurance). I reply to them, that as an internist, that I would be happy to switch systems, and they should pick the one they want. NHS, The Canadian System, or the 3 minute Japanese visit; it all works for me. Each system has its own methods for primary care doctors to work the system, and in none of these, including ours, is our work particuarly well rewarded.
The problem is that this is a two way street. If I tell a 55 year old man that he doesn’t need a stress test, forget a cardiogram, then will he just go to the guy down the street who will do it? And if he has no choice of physician to see, would that be fair. It would be great if people had to pay for “stupid” services, but good luck coming up with an equitable way of figuring that out.

Jul 9, 2008

Valid questions. Nice piece.
“Studies show that in areas where there are more hospitals competing with each other, hospital bills are higher.”
I’m not familiar with these studies. Can you provide citation?

Jul 9, 2008

It seems not only are patients tired of insurance companies but docs too. Time to get rid of insurers.
“I recently read about a physician who punches a time-clock when the appointment begins. She has calculated that her time is worth $2 per minute. Fifty-nine minutes = $118.”
Would it also apply that the patient’s time is worth money by the minute when the doc keeps the patient in the waiting room while her appointments are overbooked and stacked up?
“Mastectomy: $5,000 / $900Ruptured abdominal aneurysm: $8,000 / $1,800
Routine screening mammogram: $350 / $100
Initial neurological consultation: $400 / $100”
I see the patient (system) is not saving any money AND getting the hassle of trying to get insurance reimbursement. This will improve access won’t it.
Doctors in Ontario tried to extra bill over OHIP payments. The province realized that was undercutting access and banned the practice. Docs and OHIP negotiate rates and the patient does not see any paperwork while the docs deal with one insurer and one set of rules as well as no collections.

Jul 9, 2008

Wonderful. This is how it should be. I have no problem paying to the doctors (membership fee or fee for service)directly but I hate to involve the middlemen (insurers).
Is there any website that lists such doctors around the country? I want to sign up right away.

MD in the trenches
Jul 9, 2008

Give me a break. Concierge medicine appeals to the affluent and the worried well. Lets see how it works on the 75 year olds of the world with diabetes, CAD, angina, hypertension who wouldn’t know how to send an email or resolve an acute problem with their physician over the phone if their life depended upon it (and it probably would).

Jul 10, 2008

So a bunch of doctors have reinvented capitation for professional services, and instead of coupling it with insurance that will cover hospitalization for catastrophic events, it only covers the professional services. Fantastic! It’s a wonder people aren’t beating down the doors of these physicians to achieve a pale imitation of what HMOs created decades ago.
Capitation for professional services in HMOs generally runs around $100 per member per month, and that includes labs. It creates exactly the same incentives that these new no-insurance annual fee practices have.
The low-ball physician who says he charges $300 per year practices “extremely conservative” medicine. No kidding. If his panel size is 1,000, he’s taking in $300K a year before expenses or taxes, which is less than 1/3 of what the average primary care physician takes in before expenses and taxes. Even if his expenses are extremely low, it seems clear that either he is too conservative or that his patients are healthier than normal.
He may practice his own version of underwriting and refuse to take on patients with chronic diseases….or perhaps it is enough that he conveniently misses out on the majority of them by not accepting Medicare. And it’s worth asking, what exactly is covered in this physician fee, and what recourse do you have if the physician refuses to perform some procedure that you think is justified?
As for the other physician profiled who charges $1,800 a year…how is this a solution to anything other than giving physicians bigger McMansions and more freedom?
It’s worth pointing out that the biggest complaints most physicians have with insurers concern claims and rules regarding benefits. When physicians are paid on a capitated basis, those complaints disappear because there are no claims and physicians decide if they want to perform some procedure that wasn’t required in the contract. There is no difference in terms of incentives between the self-capitating physician, and the capitated physician who gets his patients and payments through the mediation of the health plan. Of course, if you insist on being paid 5 times the average national expenditure for professional services then there is no need to limit your care to what is medically advisable. You can go nuts with tests and checkups.
There are so many basic problems with the way we finance health care today, and this movement solves none of them in a serious way.

Jul 11, 2008

The only problem with healthcare is ‘MIDDLEMEN’ like you. Leave the patients and doctors alone, problem gets fixed automatically.
Patients hate health plans; doctors hate health plans. Why are we talking about still keeping them.
I don’t want to pay to millions of these middlemen. Period.

Jul 12, 2008

My wife is a solo family doc in the Syracuse area and I am her very proud husband and practice manager. Now you are probably not in our area but if you are, we are Village Medical of CNY. We are attempting to keep our panel small and provide real care and actually know who you are. So if you live near by drop us a line and let’s see what we can do. Whoever answers tell them it’s Bill from the healthcare blog and that Paul told you call and see if we could work together.
Now since our country is so large and so you are probably not in our area just by chance try googling IMP or Ideal Medical Practice. We just started to get involved with this great group of small, mostly solo primary care practices, almost all of which are in Family Practice, so we are not on their web map yet but should be there real soon. Anyway, try to find one of the docs or practices listed that are close to your home and I think you will be very suprised and happy.
Some practices are leaving the insurance game altogether while others are attempting to still provide that great level of personal care while still participating with the enemy. For the moment we still are, but every day my wife keeps talking about giving these parasitic leeches the boot. But either way, those of us in the IMP movement are really trying to talk the talk and walk the walk.
In the end if more patients were like Bill here and almost all primary care offices were like those of us in the IMP’s I think healthcare costs would drop like a lead ballon. With great access to a caring and involved doctor, with patients who are willing to own their half of the doctor patient relationship, outcomes could improve dramatically, useage could be drive way down because better outcomes, equals less expensive care for the really big ticket items like ER and Hospital admissions, less expensive care at our offices as opposed to at specialists offices, ER’s and Prompt Cares. How much does the average ER visit cost just for a regular sick visit? Hundreds of dollars for sure. So why not pay a PCP well for caring for the same patient over the phone or for the hassle and expense of going in, turning on the heat or AC, perhaps bringing in a staff member (saftey as well as care) at time and a half, to save hundreds of dollars on these silly costs?
We pay so much to over paid specialists to perform procedures, while PCP’s can not get paid a decent living unless they run the hamster wheel and give crumby care to their patients in over sized bloated panels that nobody can manage effectively or properly. Get out of the way, stop sucking us dry and finally properly pay for and allow PCP’s to do what they were trained to do… Manage all this care, provide preventive care, work with patients to avoid bad outcomes and illnesses, and treat mild to moderate illnesses and conditions in the least expensive place, a PCP’s office. What a nightmare!
Is it so wrong after years of doing without, not getting paid, real lost wages to some of the most intelligent people in our country, and in primary care most of those people have good hearts and are in medicine for the right reasons, especially those that are still PCP now, to properly pay them enough to pay off all their debts, make up all those years of lost wages while studying and training, and finally start saving for themselves and their own families? My wife glady took an oath to provide top quality care but I don’t remember being asked or being told that we should expect to be almost totally broke and driving rusted out old bombs, both of us working late almost every night, missing out on our children’s and family life, just to treat regular working and middle class folks, who by all external views and measures are actually better off economically then we are… Something here is really broken.
Anyway, Bill go find yourself an IMP practice if there is one close by or at least find a quality soloist. Most of these folks tend to be trend buckers and are still trying to do the right thing, inspite of all the pressure to do otherwise. Let us all know how this works out for you. By the way, could you at least tell us what city, town, state you live in or near? Perhaps that way someone here could help direct you to a good caring doc and practice. Good luck and be well….
“Beware of the Medical Industrial Complex”
“The Insurance Industry is a Legalized Cartel”

Jul 23, 2008

Bill writes:…..”The only problem with healthcare is ‘MIDDLEMEN’ like you. Leave the patients and doctors alone, problem gets fixed automatically.”
Ah yes, if only it were that simple. Unfortunately, healthcare economics are a different strain of pure play supply and demand interactions. Somewhere between the “road to serfdom”, and a John Maynard Keynes managed economy lies the industry elusive holy grail.
One simple factor is that physicians create the demand for their, and the entire food chain, associated with the delivery of “ordered care”.
Yes, some docs are truly aligned with the Hippocratic oath and mission; unfortunately that is not a central tendency of the general physician population.
Greed is not a setting on a dishwasher; it is an intangible and subject to the inevitable point of view or agenda based argument.
We need a system architect, and a series of rules that we play by. Hoping that people will behave in the face of incentives inviting otherwise is a tad bit naive, imo.
No offense intend, just another POV in the mix.
And yes, health plans are by no means the value added players they would have us believe. Oh my, we really are in a hole.

Jul 24, 2008

“There are so many basic problems with the way we finance health care today, and this movement solves none of them in a serious way.”
I found your analysis very interesting, but disagree with this particular point. The subject of concierge medicine strikes a nerve, good or bad, in everyone. This means that at the very least, we have found an important issue that matters to us all.
I believe that the issue is the concept of what the role of insurance should be.
Insurance for catastrophic events should definitely exist. It is less clear to me that aside from hospitalizations or serious events the best model should involve insurance. Some have argued that using insurance to cover regular visits is another driver of healthcare costs (see Randy Pozdena’s paper at

r. conanger
Jul 27, 2008

There is something missing from those who criticize docs not wanting to participate with insurance plans,government or others. There is no insurance plan in the USA that does not recover its costs in one way or another from patients. Institutions deduct insurance premiums against wages earned working for the institutions. Medicare participants have to pay into the system a monthly subscription fee. Private insurance companies’ subscription fees run into the thousands/year. So, bottom line, those people who pay the docs man-to-man, so to speak, may be paying a premium for care, but, remember, they are not paying insurance premiums. For some of the non-insurance docs, paying personally for care may, indeed, amount to less money than the patient would pay in premiums/year, were they covered by insurance. The face to face payment scheme is unincumbered by middleman maintenance fees—insurance execs’ six and seven salaries are funded from insurance premiums paid by participating patients, etc. Since all this middleman expense is absent from face to face encounters, it is reasonable to expect some of the direct payment plans would total up to less than total yearly insurance premium payments for the participants. The docs setting up such plans, remember, whether $1800.00 x 1000, or $300/year, in essence, pool moneys, against which they pay their support personnel, pay for office rent, etc. mini-insurance plans, if you please— without supporting administrators bearing gold-plated suspenders.

r. conanger
Jul 27, 2008

Correction: “six or seven-figure salaries”

Aug 2, 2008

“There are so many basic problems with the way we finance health care today, and this movement solves none of them in a serious way.”
I don’t think anyone is suggesting that this solves any problem, it is merely a logical consequence of current reimbursement schemes. When folks can’t get access to care or unrestrained proceduralists and hospitals bankrupt the system, then the worm will turn.
How can anyone be upset at these extremely intelligent, service oriented practitioners responding to incentives?
Nowhere in the oath I took were the words….”or die in the attempt.”

Aug 4, 2008

I was wondering about a few things. Is it legal for a doctor to see a patient in the hospital and then ask them to come to his office for a follow up (not within global limits as is not for a procedure) the next day or so and then the patient says they do not want to come because they do not want to pay a copay BUT the provider feels medically they should be seen so he says they dont have to pay that copay? CAn you either waive the copay OR can you just not bill the insurance for the visit at all?
What about if a patient is seen in the office for something and the doctor is concerned enough to ask the patient to come back the next day for a follow up and the patient does not want to pay can you just waive the copay?

Sep 18, 2008

I think this is a great idea…minimal wait times, personal service, a doctor who is not stressed…Sign me up! I’m more than willing to pay extra for these perks; after all, I pay my lawyer by the hour, why not my doctor?