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Stanford Owen, a doctor at The Center for Health Management who stopped accepting insurance, talks to patient Aaron Dauro in Gulfport, Miss., Nov. 21, 2012. Many physicians who stop accepting insurance do so because of frustration with red tape, but concierge medicine not without risks to the doctors and downsides for patients. (James Edward Bates/The New York Times) -- PHOTOS MOVED IN ADVANCE AND NOT FOR USE - ONLINE OR IN PRINT - BEFORE NOV. 25, 2012.

James Edward Bates, New York Times

More doctors finding ways to avoid insurance

  • Article by: PAUL SULLIVAN
  • New York Times
  • December 1, 2012 - 4:42 PM

A few weeks ago, my wife and I were at our wits' end: Our 4-month-old daughter wouldn't sleep for more than an hour at a time at night. We had consulted books and seen our pediatrician, but nothing was working. So my wife called a pediatrician who specializes in babies with sleep problems.

The next day, he drove an hour from Brooklyn to our house. He spent an hour and a half talking to us and examining our daughter in her nursery. He prescribed some medicine for her and suggested some changes to my wife's diet. Within two days, our baby was sleeping through the night and we were all feeling better.

The only catch was this pediatrician did not accept insurance. He had taken our credit card information before his visit and given us a form to submit to our insurance company as he left, saying insurance usually paid part of his fee, which was $650.

Later, our insurance company said it wouldn't pay anything. The company said a fair price for our doctor's fee was $285, about 60 percent less, because that was the going rate for our town. Then, it said the lower fee was not enough to meet our out-of-network deductible.

While we were none too happy with the insurance company, we remained impressed by the doctor: He had made our baby better and was compensated for it, all the while avoiding the hassle of dealing with insurance.

What pushes a doctor to go this route, often called concierge medicine? And how hard is it to make a living?

"About four years ago, one insurance company was driving me crazy, saying I had to fax documents to show I had done a visit," said Dr. Stanford Owen, an internal-medical specialist in Gulfport, Miss. "At 2 a.m., I woke up and said, 'This is it.'''

Owen stopped accepting all insurance and now charges his 1,000 patients $38 a month.

"When I decided to abandon insurance, I didn't want to lose my patient base and make it unaffordable," he said. "I have everything from waitresses and shrimpers to international businessmen. It's a concierge model, but it's also the personal-doctor model."

Owen, who once had three nurses and 10 examining rooms, said it is now just him and a receptionist. He has become obsessed with keeping overhead low, but he said that for the first time since the 1990s, his income has been rising.

At the other end of the spectrum is Dr. David Edelson, who runs a practice called HealthBridge in Great Neck, N.Y. In addition to five doctors, the practice has a full fitness center and provides the services of a personal trainer, nutritionist, acupuncturist, sleep expert and stress-management consultant.

"The current model for primary care is broken," said Edelson. "Either I can go down with the ship, sell my practice to a hospital or take my practice in the wrong direction. Or I can develop a better mousetrap, which is more time dealing with patients and their care."

Edelson reduced his own practice to 300 patients, from more than 3,000. Of those, 250 pay $1,800 a year for concierge services and 50 others receive scholarships. He estimated that from the combination of the membership fee for the extra services and what gets billed to insurance for typical care, he will take in $600,000, and more of that will end up in his pocket.

Potential risks and downsides

This approach to medicine is not without risks for doctors and downsides for patients.

The biggest concern for a doctor is running afoul of insurance regulations that prevent doctors from billing twice for the same service -- for the care, which is submitted to the insurance company, and for the concierge fee, if the fee doesn't cover something extra. Some insurance companies also bar doctors from offering concierge services.

David Hilgers, chairman of the law firm Brown McCarroll, said the risk to a doctor with a practice dependent on Medicare reimbursements was particularly acute.

"Medicare will not allow you to charge a patient in addition to what the government pays," Hilgers said. "There is a risk of losing your practice and your license and being penalized by the federal government for doing so."

He said a doctor in the past could justify the concierge fees by saying he was charging for an annual physical, which Medicare did not cover. But now, annual physicals are covered, so concierge doctors must be careful how they word contracts with patients if they plan to bill Medicare. Any fee would have to be for services Medicare does not cover -- unless the doctor opted out of all insurance.

Edelson said he was aware of this. He said the concierge fee and the insurance reimbursements were two different streams of income, one for membership in HealthBridge and the other for traditional medical services.

The other issue is quality of care. All the doctors I spoke with said they switched to a fee-for-service model for three reasons: to preserve their incomes, to avoid the administrative hassles of insurance and to provide better care.

Dr. Harry Greenspun, a senior adviser at the Deloitte Center for Health Solutions, said that while the concierge model was certainly heavy on service, there is no correlation between that and the quality of care.

"In a lot of these concierge practices where you're getting all these services, we may find out that the quality of care isn't higher," he said. "It could be the emperor has no clothes."

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