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How Much To Charge Per Patient

Let’s do the math on spending more time per patient. That’s often the point of contention anyway, isn’t it? If you spend 1 hour per patient you wouldn’t make enough to sustain your medical career. But in fact, I’ll argue that your income per patient would be higher if you spent more time per patient.

This will be a little about how much we should and can charge per patient visit. But also how much income per patient we could have after paying for overhead.

Current Model

The current model looks something like this: you’re an employed physician and you get a set salary maybe with some productivity tacked on. Your patients are collected by large insurance companies and they are sent to you because of the contracts your employer negotiates.

The model of patient visits – as in, the time per patient – is dictated by the reimbursement model of the insurer and the individual contract that’s negotiated.

The goal for the insurance company is to minimize their risk, maximize their profits from the monthly premiums, make as much money from their medication contracts, and minimize paying for care.

There are churches of financial analysts who sit there and calculate the bottom lines for the insurance groups based on earnings per patient and the ratio of patient to clinician.

How Doctors Work

Okay, so the above was how the current model functions. And it’s pretty much all insurance-based; as in, it’s how the healthcare system works.

Doctors want to spend more time with patients. I know, you don’t believe me because you’re like “Fuck no, they are annoying, they just keep telling you about more of their shit and rarely take responsibility for their health”.

But that’s only because you’ve been dealing with the insurance patient, i.e, the patient who pays for their health with monthly premiums. Note, I said they pay for their health and not healthcare.

The average doctor I know wants more time per patient so that they can first create a verbal connection. Maybe get some chit-chat out of the way. Then we want to delve into what the patient is here to tell us and uncover their fears.

Most of us who have worked in chronic settings or even high-acuity settings know that most concerns patients have resolve with time or just by acknowledging them. So it’s mostly a matter of listening.

We certainly don’t want to rush off to the next patient. I want time to reflect or at least time to grab a sip of my coffee and not walk around with a bladder the size of a pillow.

Current Payment Model

The insurance company probably pays my medical group around $100 per patient – let’s just assume this conservative number for now. I see 25 patients in primary care in an 8-hr day. So that’s $2,500 my medical group earns for putting on a single day of clinic.

I would see around 6,000 patients per year in a primary care clinic, on average.

We spend 10 minutes per patient which is an exaggeration, frankly. Don’t forget we chart, answer messages, talk to nurses, and look shit up.

For my portion of work, I might get paid $250,000 per year. And I’ll work 250 days per year which accounts for the holidays and weekends. That’s around $1,000 per day of work – or an income per patient of $40.

The 1-hr Model

Patients don’t feel that they have enough time with their doctors. And I’m rushed the whole time. I want to spend more time with my patient.

Imagine if I spend 1 hour per patient. I still would need 10 minutes for charting and admin stuff – so the patient gets 50 precious minutes with me. And to earn the same $250,000 per year I would need an income per patient of $125.

I would argue that the average insurance reimbursement, once you account for all the other things the medical groups offers and orders, will come out to well above that.

So it is 100% realistic for me to earn charge $125 per patient and still earn my $250,000 per year.

But forget the income per patient for a moment, imagine the impact you’d have on patients if you can spend more time with them. Not that you’d have to – some patients just have a UTI or need a medication refilled or a quick abscess drained.

Overhead & Expenses

Oh, but Dr. Mo, you didn’t account for the overhead. Alright, let’s do that. After all, my medical group is in a fancy shiny building with 12 union MAs running around – though they are doing the work of just 2 competent MAs.

If I’m spending 1 hour per patient, then I don’t need much of a waiting room or much of a parking lot. How many exam rooms do I need? Remember, the 7-room model only exists because we’re trying to rush from one patient to another.

I’m not trying to bill the insurance company so I don’t need fancy machines in the office or I&D kits just so that I can bill for them. I can use reusable sterile equipment, which my MA can sterilize for pennies.

As for help, the MA gets what, $20 per hour? And for that, she’ll do all the necessary office work. And she’ll manage my office. It’s not like the union MAs who are task-based. That’s about $40,000 per year for my MA.

The rest of the income comes from refilling a script over the phone. Or I might perform a procedure for the patient or give them an IV or an injection. I have the right to put a surcharge on these because I take on the risk of these.

Finally, there is malpractice and office rent. I wouldn’t need a big office as I already discussed. I might end up paying $2,000 per month for an office and $400 for malpractice – if that.

How Much to Charge Per Patient

So how much should you charge per patient? I only used the $125 example as a gauge. But the reality is that in most places you can charge much more than that.

I am currently staying in Glassell Park, a Los Angeles neighborhood. No home here is under $800,000 and most are well in the $2m range.

When you search this 90065 zip code, you get fairly inaccurate census information. The median home costs $680,000. Ask an Angelino if that’s possible. Sure, that’s what the bank might value the home at, but the buyer will pay $1.1m all day long.

The median household income is $68,000. Right. The reality is that people are self-employed and only report that much income but have a lot more disposable to them.

$125 – $200 per Hour

My rock climbing gym which is always packed costs $130 per month. But imagine how many times a year a patient would actually need to see me – 2, maybe 3 times.

And the rest of the time I would be able to exchange emails with my patients if needed. I could be there for them, have real conversations. I wouldn’t practice medicine unless they are in my office but we can have a cordial exchange the way you would with your doctor in an alternate universe where insurance companies don’t reign supreme.

So, I think $125 per patient for 1 hour is absurdly low. Okay, maybe not absurdly but nothing less than $150 and I would say about $200 to keep the patient accountable.

If they want good care, here I am. If they want insurance-level care, by all means.

How Much Are Patients Paying?

I won’t stretch this article too long. But it’s important to say that patients often pay far more than $200 per year for their healthcare. They aren’t getting much value for this cost.

I don’t think it’s terrible to have catastrophic insurance. But nothing like that is available. Most people must keep paying for their monthly insurance premiums to feel well-insured and protected.

If they did use their insurance, they would have a high deductible. They would get nickel and dimed for lab tests, imaging, and their prescriptions. Not to mention the endless hours they’d spend waiting for stuff.

Just remember, when it comes to income per patient the insurance companies are already making well over $100 per patient visit. And most patients aren’t satisfied with this model.

The current model is absurd. Patients are paying $4k per month for health insurance and spending only $1,000 per year on healthcare visits. It’s backward.

Believing in Value

In baking, they say, “believe in the crust.” When the crust is good, then the bread is just right.

In mainstream medicine, the average consumer is ignorant (not in a derogatory manner) and misinformed. The average insured consumer isn’t terribly concerned with optimal health – they believe in the magic of western medicine.

I would say 25% of healthcare consumers are quite well-informed. You and I will rarely interact with them because they obtain their healthcare outside of mainstream channels.

These patients believe in value. They are willing to pay more if they get more – they are well-informed consumers. They do their research. This informed consumer knows as much about medicine as the misinformed healthcare consumer knows about the latest Netflix shows and which gas station has the cheapest gas.

They want the doctor to earn a good income. They understand that the doctor will care about the income per patient not because they are greedy but because they want to have a sustainable medical career.

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