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

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

“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.”

18 thoughts on “Doctors Who Don’t Take Insurance: What Does It Mean for Patients?

  1. In a market driven system without strong practice guidelines defining good care, there is no fair way to decide access except by price!
    In a universal access system, there is only some kind of Queue system that can provide fair access if the number of providers is too few. Also, without clear guidelines and education of the public, it would appear that no universal system can exist without large queues.
    I guess my point is that we better decide the basic tenets and mission of any new system before we set up the payment and access rules. BTW, if market principles are going to work in healthcare, good care better be well defined (something missing in past market experiences) and many providers better by available!

  2. most of us in primary care or cognitive medicine or whatever you want to call it would love to have more time with patients, give them the care they need, handle stuff over the phone or internet when appropriate, and be paid appropriately for our services. The only way to do that these days is in the “concierge care” model. So I anticipate that model growing in numbers as we all become squeezed out by the insurers and govt.
    I do worry, however, about the emphasis on screening tests that are not evidence based. I looked into a few concierge care websites and there was talk of EKGs for asymptomatic men, urine tests, yearly physicals with “comprehensive testing” etc. This is bad medicine for a host of reasons, wasted money just being one of them.
    The model has a bit of tension developing: “why would I pay the yearly fee if the doctor isn’t going to do a bunch of thorough testing on me?” I know I would be frustrated as a concierge doc if many of my patients expected that kind of care. It seems, however, that the model as currently constructed sets those kind of expectations and attracts a certain kind of patient.

  3. NG & pcb- thanks for your comments.
    I agree completely with what you say about the typical “concierge” model for the wealthy.
    That’s why I thought Dappen’s model was so interesting–just $300 a year for what sounded like practical, conservative primary care. I’ve read of at least one other doctor doing something similar (in teh WSJ) and attended a conference on Health IT where a primary care doc had installed the IT, no longer needed much of a staff, didn’t take insurance, and didn’t sound expensive.
    I don’t know whether a doctor could make his overhad on his model in, say, Manhattan, given the cost of rents. But Fairfax County VA isn’t exactly Appalachia, and I would suspect it might work in many parts of the country that are solidly middle-class.
    I definitely liked the way he had stripped out the waste that insurance insists on as well as the waste some patients expect. He definitely wouldn’t attract the patients who want every scan they’ve ever heard of. Which also makes me think his model would work better in Iowa (where people are accusomted to less intensive care, fewer specialists, fewer procedures, and outcomes as just as good as on Boston or N.Y.)
    NG–Yes, we definitely need guidlines for effectiveness. That should be teh centerpiece of health care reform.
    Though I would add that, where we do have guidelines, many doctors just don’t follow them according to the Institute of Medicine. So we need to do more–in med school, in continuing education programs–to stress evidence-based medicine, and that it’s not longer acceptable to just “do it the way I’ve always been doing it.”
    The fact that drug makers and device makers fund so much continuing education stands in the way of getting the message out. They don’t want to talk about head-to-head comparisons, are why their products are not good for all patients.

  4. Thanks so much for your coverage of my blog post about Dr. Alan Dappen. This is a great, balanced article. I would like to mention that the $300/year is not a membership fee, but what his average patient spends on his service/year in a “pay as you go” model. There is no membership fee at all, actually. 🙂

  5. While we all find this interesting, it is important to recall that it is anecdotal and that there’s no good data I can find, just a series of arresting stories. obviously we don’t hear from the doctors who tested the model and found it didn’t work for them. there are some. these guys have a subset of the market, just as hmos do, but this may be another case where the potential market has real limits and isn’t relevant to the mass patient base. simply too early to tell.

  6. Several of my colleagues see doctors who take no insurance in either NYC or Northern NJ. While these doctors save the administrative overhead related to not having to deal with insurers, their charges are quite high anyway. Patients get a receipt which they submit to their insurer and whatever insurance pays, it pays, but it’s usually substantially less than what the patient paid at the time of service.
    Regarding the concierge model, I wouldn’t find it attractive both because I think a membership fee of $1,800 (in the example cited) is excessive, and I’m not interested in receiving a lot of screening tests unless they are endorsed by the AHRQ or similar body as prudent and cost-effective for someone of my age, gender and with my medical issues.
    At the same time, I would love to be able to pay primary care doctors and specialists for that matter, based on the amount of time they spend diagnosing, consulting or monitoring my condition. Why shouldn’t my cardiologist, for example, be paid the same for a half hour consult as for a stress test and evaluation that takes the same amount of time? Or, why should my urologist bill $350 for an ultrasound that takes, maybe, 60 seconds at most? It would certainly make price transparency easy. There could be a sign posted that says: hourly rate: $300. Billing could be based on 0.1 hour (6 minutes) increments with a 0.2 hour (12 minutes) minimum. Any tests that required referral to an outside lab would, of course, be extra as would prescription drugs. Imaging tests should also be billed based on the time it takes to do the test including equipment setup time.
    Of course, aside from doctors who take no insurance, none of this can happen unless CMS leads the way because, as has been mentioned previously, Medicare drives payment policy in the U.S. Change, if it comes at all, comes extremely slowly. Its upcoming pilot project to try bundled pricing for certain hospital procedures will go on for three years and then probably take another year to evaluate. It’s too bad we can’t just have a lot of experimentation and let a thousand flowers bloom, but, unfortunately, that’s not the way it is.

  7. There is nothing Dappen does in his “new” practice that he couldn’t do in his old situation. Why wasn’t he available 24/7? Why not use extenders? I hope he has his records backed up.
    If his patients are only spending $300 a year – he has a very healthy patient group.
    As for prescription refills – you should be seeing a patient on long term drug therapy. It’s not OK just to go on for years.
    This all sounds like great medicine, but is it? Finally – what’s his income?
    There is a better way – this is not a panacea, and can work, but it’s clearly not the gold standard.

  8. Can’t tell if this blog post is another shot at doctors or not. Doctors did not make the present healthcare system, but are only reacting to it. If the present third party system is making it difficult to provide good care, then I applaud both patients and doctors who have found a better way. There should be only two people involved in healthcare, the doctor and the patient. We need to remove all others from the equation and then we will have a system that works for all.
    For a physician grass roots effort for healthcare reform in America please visit

  9. Dr. Sh— No, this is definitely not a shot at doctors. As I indicated in my comment above (and below) it sounds like Dappen is taking very good care of his patients.
    Albert Fuchs–
    First, let me quote from your op-ed:
    “For more than a year, I haven’t received a single dollar from any insurance company. I work for my patients. A few hundred doctors across the country are working the same way, some in blue-collar towns. Routine care should be affordable to the middle class, and as more doctors and more patients form relationships that exclude insurance companies, prices will drop. Insurance doesn’t make routine care affordable; it makes it more expensive by adding a middleman. I know that some patients can afford nothing, so two afternoons a month I volunteer at a clinic that cares for indigent patients, which I could not have done with the huge patient volume I was seeing a few years ago.
    “When doctors break free from the shackles of insurance companies, they can practice medicine the way they always hoped they could. And they can get back to the customer service model in which the paramount incentive is providing the best care.”
    What’s interesting is that the op-ed indicates that you practice in Beverly Hills. So clearly, this model can work in different environments.
    What I especially like is the idea of sharing saving of the savings of lower overhead with patients. It
    certainly sounds like a win/win situation for everyone.
    As Dappen explains, what is different in his new practice is that he doesn’t have to cram in so many patients every today in order to meet the overhead that comes with taking insurance. (Need for at least one person to handle all the paper work, plus time doc must spend on phone with insurers)
    And, under insurance, he couldn’t be paid for e-mails or phone conversations. He had to insist that patients come in for everything, sit in his waiting room, etc. More stressful for everyone.
    I agree a doctor shouldn’t let a patient go for years on meds without seeing him. But I doubt Dappen does.
    Meanwhile, in Manhattan, many doctors insist on seeing you (so that they can get paid) for every refill–even if its a medication that you have been on for a long time, that is clearly workign etc. Once a year would seem sufficient in most cases. . .One doctor was very frank with me: this is the only way I can get paid.
    Don’t know how much Dappen makes. But he is satisfied–which is all that matters.
    I agree, I don’t think that this is a panacea, or a solution to national health reform, but it is very interesting that it is working for some doctors in various situations (see Fuchs above.)
    I agree that CMS needs to change the way it (and the ret of us) pay for healthcare.
    But I don’t think charging by the minute is the answer. A doctor who has invested in expensive equipment has to recoup the cost–that means he will charge you more for ten minutes using the equipment then he will for ten minutes talking to you.
    That said, I think that if a doctor in a small (1 to 5 person) practice, it is inefficient for him to invest in the same expensive equipment that the doctor down the block, and the doctor 3 blocks away have invested in.
    Patients like the convenience of not having to go somehwere else for a test, but it is very wasteful of our healthcare dollars to have so much duplication of equipment that sits idle much of the day.
    I agree that the annual fee does seem high, and that concierge medicine coudl easily lead to overtreatment as healthy patients try to get their “money’s worth” with lots of unncessary tests that can lead to more unncessary treatment . .
    Jim — You write: “obviously we don’t hear from the doctors who tested the model and found it didn’t work for them . . .”
    That’s a very good point. I don’t see this as a model that could be rolled out to fix our broken health care system. But it is interesting that it works, for whatever reason, for some doctors.
    Dr. Val–
    Thank you for writing such a good column in the first place!

  10. Maggie: An interesting and timely post.
    Once upon a time, circa the 1980s, so called “Manged Care” which was limited to a couple of staff and group model HMOs (PPOs hadn’t been invented yet) were monitored and tracked at the Health Care Financing Administration from a niche department dubbed “Alternative Delivery Systems” (ADS).
    We were in the early days of HMOs migrating from staff and tight group models into mainstream medicine via IPAs and successor physician networks. And the market share was estimated at 3-5%.
    Well some 20 plus years later the “ADSs” of the world essentially constitute 100% of the insured market.
    Now we need appreciate the emergence of the boutique, concierge or retainer based medical models in a similar vein.
    The reality is we have reached the “diminishing returns” state, where managed care is in fact “employer sponsored health care”. And that its “cost shifting” model has failed, and is cratering on the basis of it’s own inefficiency and bureaucratic inertia.
    IMO, more docs will enter the boutique or concierge fray and its share of the physician market will grow from the current estimated 2-3% share into an actual viable delivery platform, with incremental gains in its share up to perhaps 25%, maybe more.
    Standards will emerge, as there is no definable platform, but this will come.
    It has potential to appeal to only a portion of the 47 million uninsured, though. Unfortunately, it is not a platform for complex specialty or catastrophic care needs. Here high deductible or supplemental health insurance will be required to layer into an essentially basic medical (both primary and first line specialty) care model.

  11. I think what’s missing from the analyses I’ve seen is the calcs from the patient’s perspective. Namely, how much does it cost to have condition ‘X’ under typical insurance coverage compared to what the same condition would cost pay $300/yr to a Dr. along with low premium, high-deductible (HSA-type) insurance.
    I don’t know the answer, but I’d bet we’d find that that the latter setup would work for the ‘healthy’ and likely for people with uncomplicated diabetes, hypertension, etc., while the cost of managing the complications for, say, advanced diabetes would swing in favor of typical insurance coverage.

  12. Is there a specific professional association that conciege/boutique docs are members of?

  13. Forget concierge! Just swithing to cash pay practice works well. Most people don’t need to go to the doctor every 2 weeks and if they do it shouldn’t be forever and is likely equal or less than their monthly insurance payment and they get what they need and want not just what insurance says they will pay for. ( ie generic drug, specialty tests etc. I am a naturopathic physician in washington state and i’ve practiced both in a cash practice and in insurance taking practices. Accepting insurance definitely causes unnecessary exams and doctors visit just to satisfiy inusrance reimbursement criteria. But you can still charge for phone consults if you want to have a patient skip the trip adn provide the convenience of taking care of their refill on the phone. Essentially a mixture of both. At the end of the day I think catastrophic insurance and paying cash for the rest makes the most sense. And no you don’t have to be a boutique or concierge practice to get out from under accepting insurance. The insurance model is clearly a disease we don’t need though.

    two large insurance companies in this state will not even cover vitamin D testing. most people in this rainy state are significantly deficient and some even after supplementation do not absorb it. And how many research articles are there touting the cancer and heart disease preventing attributes of this vitamin/hormone? Prevention would save an insurance company millions yet there backing away froma 79$ blood test. Penny pinching while dollars roll out the back door i say.