Dr. Mark Holthouse, a family physician in Cameron Park, CA, began looking outside the bounds of insurance-based practice 6 years ago, when he decided to deepen his interest in holistic modalities via the American Board of Integrative Holistic Medicine’s certification course, and the Institute for Functional Medicine’s seminars.
“I’ve never looked back,” he told Holistic Primary Care.
But for most of those years, he had been trying to fit these approaches into a standard insurance-based practice model. It wasn’t working. The time pressures, administrative make-work, and rising overhead thwarted his efforts to provide good comprehensive holistic care.
Frustrated, he began to explore non-insurance models. Concierge was initially appealing, butseemed risky. Dr. Holthouse didn’t think a large enough proportion of his patient base would be able to front the $1500 yearly fees. When he heard about two local colleagues who’d ‘gone concierge’ and hit the rocks, that model definitely lost its shine. Straight-up cash-pay also seemed attractive, but a total shift in this direction would inevitably exclude many patients.
With no obvious next step, he began splitting his time into 3 days of conventional insurance-based practice, for every day of cash-pay holistic practice. Those “holistic” days were much more fulfilling---8 patients per day instead of 35, in-depth nutrition and lifestyle interventions, no coding or claims denials. “We could actually listen to the patients and do good work!”
For several years, he and his partners—a nurse practitioner and a physician assistant/acupuncturist-- kept up this bifurcated practice, all the while trying to find a way to expand the “holistic” portion and minimize the traditional insurance portion of the practice, without abandoning people in need.
Then, two things happened: Dr. Holthouse attended HPC’s 2011 Heal Thy Practice conference, and he met Dr. William “B.J.” Lawson and his Physician Care Direct (PCD) model. The path to greater practice freedom and a health-centric focus started to become clear.
PCD (www.physiciancaredirect.com) is a multi-faceted hybrid practice platform that enables doctors to create pre-paid memberships called Access Cards covering a defined set of primary care services. It also facilitates contracting with small businesses to provide care for employees. Developed by Dr. Lawson, a physician-entrepreneur and Chris Shoffner, an executive with years of experience in health benefits design, PCD gives physicians wide latitude in designing their membership plans. It is definitely not a one-size-fits-all approach.
Lawson and Shoffner worked closely with Dr. Brian Forrest, a pioneer of low-overhead direct-pay primary care, to identify ways to reduce overhead, simplify operations, create flexible scheduling and transparent pricing, and re-tool practices to be truly patient-centered, not health plan-centered. The result is a flexible system that provides a cash-based element without requiring all-or-nothing changes in existing practices.
In exchange for an 8% cut of revenue generated from the access cards, PCD provides guidance in defining membership programs, automated billing, collections and revenue management, and marketing services to help physicians introduce the concept to patients, staff, and local businesses.
Holistic Primary Care caught up with Dr. Holthouse at the outset of his PCD transition. When we talked, he was in the process of buying his clinic space, creating his access card program, and introducing it to his community. Over the course of the year, we will chronicle Dr. Holthouse’s progress in the hope that you can glean valuable lessons on how to create viable, health-centered practices that sustain and empower holistic care.
HPC: Tell us a little bit about your community and your current practice.
MH: We’re about 35 miles east of Sacramento, in the heart of Eldorado County. We’re in the foothills of the Sierras, and the two main population centers are Tahoe and Placerville. I began practicing here in 1993. Cameron Park has a population of roughly 10,000. You could say it’s a bedroom community of Sacramento and the Bay Area. We have a lot of 30-somethings with young families, as well as retirees, and many people on fixed incomes. We also have a segment of very well off telecom execs, because Intel has its main headquarters in nearby Folsom. Our’s is a true family practice. I see newborns to centenarians!
HPC: You’ve been doing this split practice: what’s the mix of “conventional” insurance-based patients and cash-pay patients coming in on the “holistic” days?
MH: I’d say about 25% of the current practice is fee-for-service cash for holistic/integrative care. The rest is insurance, though we do have some insured patients who pay direct for non-covered services.
HPC: You looked carefully at various practice models before deciding on PCD. What convinced you that this was the right fit?
MH: What really drew me to PCD was the fact that I could phase it in. I could start by first offering Access Cards to uninsured people who have been using the e-rooms as their primary source of care. I don’t have to risk losing patients who have insurance. I can begin by simply adding people who don’t.
This is very different from pure concierge. We seriously entertained that approach, and went prettyfar into negotiating a launch. But when I was told that I’d basically have to say goodbye to three quarters of the people I’d spent 20 years caring for, the idea lost its appeal. Other practices in our area went to that way, and they’re struggling. Some patients did not see the additional value for the money they had to pay up front, so they didn’t renew. Concierge can work, but you need to be in an area with high population density and cultural diversity. It didn’t really fit for us.
Plus, I liked where B.J. and Chris were coming from. PCD seems to be about really helping doctors, not about making us an annuity revenue stream. They’re finding ways to help us help more people. The goal is to simplify primary care, get overhead down, and allow us to offer real value at prices patients can afford.
HPC: What are those prices?
MH: Our Access Card program will cost patients $49 per month, or $580 per year. I think those numbers are well within reach of most people, even those of modest means. That covers an annual physical, follow-up visits, all the basic lab work, and provides them with a medical home.
HPC: How far along are you in actually implementing this?
MH: Well, we’ve started to advertise the access cards to our uninsured, self-employed, and poor patients. We have a list of people who call for a prescription refill but haven’t been in for a visit in a year or two because they don’t have insurance. PCD gives us something we can offer these people, and most can afford it.
It’s also a great fit for self-employed people or those with jobs that don’t provide insurance. It gives them access to a medical home at a much lower cost than through a typical individual insurance plan. We also have a list of people who are dissatisfied with their current plans and who may be considering dropping them.
The next phase involves introducing the option to the rest of our patient base. We just held a “town hall” meeting to explain to patients what the access program involves, why it is beneficial, and how it works.
HPC: Cultivation of relationships with local small businesses is a cornerstone of the PCD model. I know Dr. Lawson encourages interested physicians to join their local Chamber of Commerce. Have you done that?
MH: To be honest, I didn’t even know what a Chamber of Commerce did before I started getting into this! B.J. really pushed me to become a paying member, and to get in front of other Chamber members. The idea is to offer member companies a discounted fee on memberships for their employees. B.J. wanted me to try and get local business leaders on board with the idea.
HPC: How’d that go?
MH: I cannot believe the reaction I got! Not only did they warm to the idea, they got super-excited about it. Small businesses are having a very hard time with health care coverage for employees. Even big employers are dumping health care benefits. In our area, WalMart employees just lost their benefits, and a big waste management company just moved operations to Texas, leaving a huge number of former employees without benefits. So Chamber members were practically euphoric that there’s another option. When I explained to them that we also do holistic and functional medicine, they were ecstatic. That has real value to them now.
HPC: What about your staff? How do they feel about the big changes in your practice operation?
MH: We employ 9 non-clinical people. Overall they’re very excited about this transition. They see it as a positive, as a way to provide better service to our patients.
Right now, we’re doing this as an addition to the insurance practice, not in lieu of. Our billers may realize, if they think about it, that eventually, if the Access Card and direct pay revenues get large enough, they may need to look for jobs somewhere else. We’re not planning to drop any insurers yet, but if we get to the point where we have around 200 PCD Access Card patients, we may move to drop the worst paying, biggest-hassle insurers. Less insurance billing would mean less need for administrative help.
We have a business manager, and she has been a real asset in helping us implement this. She helps me figure out pricing, eligibility, time frames, and logistics.
HPC: Doesn’t PCD provide implementation support?
MH: Absolutely. They provide templates for how other practices have made the transition. They know how to set up the pricing and the mark ups, what to bundle and what not to bundle into your offerings. They also include stand-alone modules for payment processing and revenue management are independent of any EMR or health IT system you may be using. So there’s no need to convert all the data from an existing EMR into a new system.
That’s a very good thing because right now, there’s no software that allows you to migrate data from one EHR system to another. It’s a big issue, a huge logistic nightmare, and with PCD you don’t have to deal with that. Their systems are modular and not bound to any EMR.
HPC: Another key feature of the PCD model is that it provides very good prices on labwork, which translates into big savings for practitioners and patients. How does that work?
MH: Basically, we as a clinic contract directly with labs, and they bill us directly rather than having to deal with collecting from the patients or their health plans. This saves the labs a tremendous amount of work, administrative hassle, and cost, so they’re willing to give us the best prices. In exchange for that, we use those labs for all our direct pay and Access Card patients. This generates revenue for them and helps them cut their overhead, so they discount very heavily. Even after I add my mark-up to cover the cost of my phlebotomist, our price per test is still far below what the patient (or their insurance) would have to pay if they were being billed individually.
HPC: Any advice for physicians contemplating a move outside the insurance box?
MH: The first thing is you have to really examine your attitudes about money and “business.” There’s a bias among doctors, almost an apologetic attitude toward asking for cash and getting paid. I know I shared that attitude, but I have recovered from it. We have to be smarter than that these days! This is what led me to your Heal Thy Practice conference. We need to learn how we can actually make a living doing good holistic health care. There’s nothing unethical about that.
The conference gave me a chance to solidify my plan with PCD, and in addition, we will be implementing a number of new modalities that we learned about at the conference, including sub lingual immunotherapy (SLIT), and a program for office-based dispensing. All of that will help us provide better clinical service and build a more viable practice.
So far, this whole transition process has been very, very positive. How many doctors are saying things like that these days?