Doctor’s Business Model Cuts Health Care Costs
By Jennifer Reynolds
A new business model by one area doctor ditches insurance, but still offers patients a low-cost way to manage their healthcare.
Dr. Rob Lamberts, a primary care physician of 21 years, loved being a doctor, but he didn’t like the traditional business structure of health care. And he was alarmed at the cost of health care.
He set out to find a new way to practice so he could still do the work he loved, but in a way that he felt is better for the patient and himself.
“I’m always trying to figure out a better way to do things,” he said. “I always thought, ‘Is there a better way to do primary care?’”
After researching alternative business models, he settled on direct primary care: a business model where patients, not insurance companies, pay the doctor for treatment. In February 2013 he opened a new practice offering such care to Augusta residents.
“I think it could actually make a huge change for the better for people and for the cost of health care. I think it really is a game changer,” he said. “I think it could change the health care system, as grandiose as that sounds.”
Lamberts doesn’t take insurance. Instead, his patients pay a small monthly service fee that is determined based on a patient’s age. The service fee covers them for an unlimited number of visits and most in-office treatments, such as cholesterol testing, Pap smears and basic vision and hearing tests.
For example, a patient between the ages of 30 and 49 pays $40 a month, and a family of five pays $150 a month.
Lamberts said that determining what his monthly fee would be was a challenge in the beginning. One factor that influenced him when determining price was making health care affordable for those who didn’t have insurance.
“I didn’t want to charge too much because one of the ideas was to reach out to folks who didn’t have insurance and couldn’t afford insurance, so at the very least I needed to make it affordable to them,” he said.
Though Lamberts offers some services that require an additional fee, patients know upfront what costs will be. Because no insurance company is involved, there is no question of what a patient’s final cost will be.
He said it’s important to him and his staff that they help make the cost of their patients’ health care more affordable.
“Let’s say somebody doesn’t have insurance or they can’t afford this expensive drug,” he said. “Well, we’re motivated to go and seek out ways to get free drugs from the drug companies. One of my nurses really makes a concerted effort. We’re always looking for the cheapest place to buy every medicine.”
Lamberts said that he and his staff negotiate lower prices with supply providers and laboratories, then pass the savings on to their patients by only charging cost.
When he worked in a traditional doctor’s office, he was required by insurance companies to bring patients in frequently.
“Just simply to get questions answered patients had to set up an appointment, give two hours or three hours of their life to me,” he said. “Now I don’t have to hold anything hostage for an office visit.”
This allows him to see patients only when he, not the insurance company, feels an appointment is necessary.
This approach has reduced the number of patients he sees in a day, but because the monthly fee covers the cost of running his business, he ensures that his practice has the funds it needs to continue.
“I’m not an overly busy person [like he was at his former practice], this overly busy doctor who has very little time. Now, I have the freedom to give good care,” he said.
He said at his former practice that patients couldn’t reach him so easily. Now, he corresponds with his patients through text and email.
“I’m very much focused on using any means of communication, be it text messaging, be it secure messaging, be it email, to give good care,” he said.
Lamberts said starting the new practice was tough in the beginning.
“My income dropped dramatically because I started a new business and nobody was quite sure about it,” he said, “but I think that’s true of any entrepreneurial thing. You always have to go through that sweat equity.”
Initially, he said his patients were mostly people who didn’t have insurance, but as the practice has grown, he’s now sees a wide diversity of patients.
“This system that I’ve set up,” he said, “has my economic motivation in perfect harmony with what the patients’ economic motivation is, and that is to have as few medicines they’re taking as possible, to save as much money as possible, to avoid unnecessary care, to avoid emergency rooms, to handle problems early.”
He and his staff like the change.
“My two nurses and me, there’s no way in the world that we would want to go back to the old system. It’s so much better to be here in the office than it ever was in the old office. It’s so much better for us. Our patients are happy with us. The interaction is all positive because we’re out of that adversarial mode of asking patients to do unreasonable things.”
Dr. Lamberts said that it is surprising to many that the Affordable Care Act didn’t play a role in his decision-making.
“It really had nothing to do with Obamacare and that was a hard thing for people to grasp because we launched the new practice right as that was passing,” he said. “The health care system has stunk for a long time, and it’s been getting progressively worse. For me the idea of giving coverage to more people did nothing to address the root problem, which is the cost of care. It’s not access to care. It’s that care is way too costly.”
He hopes that Direct Primary Care will catch on and that more doctors will begin practicing in similar business models. He’s had good feedback from other doctors regarding direct primary care.
He said, “The vast majority are rooting for me.”