Doctor rejects traditional health-care model

Pediatrician won’t accept insurance; plans to offer exams for monthly fee

MARY LANE GALLAGHER
THE BELLINGHAM HERALD

When Dr. Daniel Kowals set up his pediatric practice in downtown Bellingham, he threw the traditional medical payment structure out the window.

Kowals won’t bill insurance companies for his patients’ appointments. Instead he’ll charge patients at the time of their service.

In January, he’ll launch a concierge practice, offering unlimited appointments and office services for about $125 a month per child, with discounts for siblings who sign on. Those fees will get patients prime access: Same-day appointments, at least at first, and Kowal’s pager number.

Kowals hopes the structure will save money on the administrative costs of billing insurance companies for services. He also hopes that the concierge structure will allow him to see fewer patients than do pediatricians in traditional practices, and that he’ll be able to give his patients more personal attention.

It’s a big change in the way most people pay for health care, Kowals knows. But he thinks with so many small businesses in the community, which often struggle to find affordable health insurance for their employees, the concierge program just might appeal to families who carry lower-cost catastrophic insurance with deductibles so high that they must pay for all office visits out-of-pocket anyway.

It’s going to be a time-saving option for some people, Kowals said. Obviously, not everyone is going to be able to afford $125 a month, but for the people that can, it’s going to save them a lot of money and time. I’m going to get them in and get them out.

People might be able to pay for the monthly concierge fees with a health-care savings account that’s connected to a high-deductible health-insurance plan, said Lisa Teal, practice administrator. People should check the details with their plan administrator, she said.

It might also appeal to families whose kids have chronic health conditions who see the doctor a lot.

I’m going to do anything I can to prevent them from having costly emergency-room visits and hospitalizations, Kowals said.

Kowals hadn’t planned on embarking on a new financial model when he started his practice, but as a sole practitioner, he was having difficulty establishing hospital privileges at St. Joseph Hospital. He would have had to carry 96- hour call shifts at the hospital, he said, which would have meant closing his clinic during that time. But he needed hospital privileges to run a traditional, insurance-based practice.

So he launched the cashonly practice. His patients who go to the hospital would be treated by another physician there, he said.

As his practice grows, Kowals hopes to add more physicians to share on-call duties at the hospital. But even with hospital privileges, he doesn’t think he’d return to an insurance-based practice.

Concierge medicine is a tiny but slowly growing segment of the health-care market, typically associated with a wealthy clientele who want their doctors at their beck and call.

You go to Nordstrom because you want a certain level of service, said Dr. Larry Greenblatt, a Bellevue family practitioner who has had a concierge practice for five years. You get a Lexus because you want a certain level of service.

But Greenblatt thinks a big untapped market for concierge doctors is middle-income people more 10-year-old Subaru drivers than new Lexus drivers. One new concierge medicine franchise is going to offer a $50 monthly fee, he said, with the goal to help people who have no insurance be able to have primary-care access for a very reasonable price.

Even with a concierge physician, going without any insurance is risky, because concierge fees don’t cover hospital bills or anything else that happens outside the doctor’s office.

Greenblatt said a few are low-income patients who have chronic illness, he said.

Concierge practices might be a way for some low-income families to get health care, said Chris Phillips, director of the Whatcom Alliance for Healthcare Access. But he points out that kids in many low-income families can get insured at no cost through Medicaid, which covers much more than office visits.

A family of four making $40,000 a year is probably eligible to have their kids covered with Medicaid insurance, he said.

The state Legislature last summer passed a law stating that practices providing primary- care services for a monthly fee are exempt from insurance laws that, among other things, require health insurers to keep $3 million in the bank. It was opposed by large insurance companies. Group Health officials, for example, said paying a monthly fee up front for medical care sounds a lot like the kind of insurance they offer.

And if more and more physicians decide to drastically reduce the number of patients they serve by switching to a concierge practice, would that result in a doctor shortage?

There are too few concierge physicians to make any significant difference, said Bob Perna, director of health care economics for the Washington State Medical Association.

This is going to be a narrow piece of the marketplace that a small segment of the population is going to latch onto, both from the patient side and the practitioner side, Perna said. The overwhelming majority of physicians and patients are going to stay in the traditional system.
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Editor’s Note: This article was originally posted on BellinghamHerald.com, it has been moved or deleted. We will keep it on CG’s website for archiving reasons.