When an article appears that promises physicians can make more money by opting out of all insurance, it raises my skeptical eyebrow. Invariably, when one digs into the model, the holes appear. You can reduce your overhead, but making the same or more money requires income from someplace. The so-called “concierge” practices charge patients a hefty annual fee, which guarantees income for the physician.
First, no he doesn’t. He runs the practice with one medical assistant. He doesn’t allow for this person being out for illness, vacation and so on. He takes no insurance, and charges a flat fee for office visits, regardless of time or complexity. He bills separately for labs, which he sends out to a lab, pays the lab, and marks up the invoice.
In his calculation of overhead, he doesn’t include facility costs, since he owns the building. At the very least, a depreciation amount needs to be added. His insurance costs, which include malpractice and property, are about $10,000, which seems low. He has no accounting or legal fees (things like tax returns), low office supply costs (still using paper I guess), answering service fees, and so on.
Most importantly, he runs with only one staff person. This person has to answer the phones (appointments, prescription refills, etc), complete the invoices and assist with the exam. Of course, if he sees patients alone, he could do this. When the assistant is at lunch, out sick, etc, he can do it himself — or go to service.
OK — let’s raise his overhead to $90,000 a year. Let’s set a personal income target of $140,000 annually. Let’s accept his average revenue of $82 per visit, and let’s say he works 200 days a year. That works out to 2,805 visits per year, or 14.02 visits per day.
Caution: This is not a full feasibility analysis. I believe that the real patient volume will have to be higher. The more important lesson may be in learning to run a leaner operation.