A Growing Number of Doctors Take Only Cash, Not Insurance


doctor with her patients doctor with her patients
A growing percentage of doctors in the U.S. are forgoing taking health insurance in lieu of cash payments. Tom Werner/Getty Images

After eight years practicing family medicine at a traditional doctor's office in Boise, Idaho, Dr. Julie Gunther was burned out. She had 2,300 patients under her care, which meant that appointments were seven-minute rush jobs and new patients had a three-month wait to see her.

This wasn't why Gunther had become a doctor or what she had trained for decades to do. The pace took a toll on her physically and emotionally. She came home angry and tired, and her relationships suffered.

"I knew I had to do something different," Gunther says.

In 2013, she heard about a new health care business model called direct primary care (DPC). Instead of billing patients through insurance for each appointment and procedure — a bureaucratic nightmare that Gunther believes negatively impacts patient care — DPC doctors charge a flat monthly fee. No insurance, no copays. Patients pay in cash and can see their doctor as much as they want.

Now Gunther runs Spark MD, a small DPC clinic in Boise with a maximum of 600 patients. Adults pay $79 a month, kids pay $10 a month, and patients 90 years old and above are free.

A Spark MD monthly subscription includes same-day sick visits, comprehensive physical exams, common procedures like pap smears and wart removals, and more. Lab tests and X-rays are available for steeply reduced fees. And Gunther's in-house wholesale pharmacy sells generic meds at a fraction of the retail cost, even with insurance.

But most important for Gunther is that she can finally spend time with her patients, giving them the personal and comprehensive care they deserve. Appointments often run over an hour, and patients can reach her after-hours and on weekends directly on her cell phone. She calls it open-access scheduling.

"It's the gold standard for high-quality primary care," says Gunther. "It means that you have a profound capacity to meet people when they need you. If someone calls in right now, they can get in today. That fundamentally changes the entire structure of how you take care of people."

Direct Primary Care: A Growing Trend

When Gunther opened Spark MD in 2014, she was only the 124th DPC clinic in America. Now there are more than 1,000 nationwide. According to the American Academy of Family Physicians, 3 percent of its members operate under a DPC model, and another 3 percent are actively transitioning to the cash-only plan.

Some DPC clinics are one-physician practices like Gunther's (she also employs a nurse practitioner and a physician's assistant), while others are large, corporate operations catering to businesses looking for alternatives to conventional employee health plans.

DPC is not the same as concierge medicine. With concierge care, insurance providers may still be billed, and the membership fees paid by patients go toward getting greater access to doctors, plus extensive physicals and procedures not covered by insurance.

More doctors are switching to DPC because they, like Gunther, are fed up with insurance company red tape and want to work directly with patients to meet their needs. More patients are signing up for DPC plans because the prices are transparent, their doctor is always available and paying cash for medical care and prescription pills is actually saving them money.

DPC evangelists are touting the direct-payment model as a way to fix America's expensive and inefficient health care system. By providing low-cost, comprehensive primary care, they argue, DPC practitioners keep people healthier, requiring fewer visits to the hospital for expensive procedures.

But critics of DPC worry that cash-only subscription health services will only widen the health care gap between the rich and poor, and contribute to a shortage of primary care physicians for those who are most in need.

Leaving Patients Behind?

Dr. Paul George is a physician, a researcher, and associate dean for medical education at the Warren Alpert Medical School of Brown University. He's been closely following the DPC trend and co-authored a 2018 opinion piece in the Journal of the American Medical Association (JAMA) exposing what he feels are the model's limitations.

One of George's chief complaints is that DPC supporters make claims about the supremacy of their cash-only model — it lowers overall health care costs, it results in less hospital visits, patients are more satisfied — without providing any data or funding any peer-reviewed studies comparing DPC and non-DPC patient outcomes.

"There's no data whatsoever," says George. "You can't really tout something as the next great, big thing without showing us the evidence that it really is the next great, big thing."

George doesn't doubt that DPC physicians like Gunther are thrilled with the new arrangement and thinks that longer appointment times and improved doctor-patient relationships are terrific. But he's also concerned about what happens to the patients who are "left behind" when a physician cuts her patient panel from 2,300 to 600.

"They're saying, 'If you can afford our fees, you can join us in our DPC practice. If you can't, you have to look for a new primary care doctor,'" says George. "That feels inequitable, even a little amoral. As physicians, we take the Hippocratic oath and say we're going to take care of people regardless of race, nationality, socioeconomic status, etc. I think the DPC model in some ways stands in opposition to the Hippocratic oath that we've all taken."

On top of that criticism, George feels that DPC is inherently inequitable, favoring higher-income individuals who are healthier on average than their poorer neighbors. The reality is that most DPC patients still need to buy high-deductible insurance to cover any medical emergencies or surgeries (or even childbirth) that land them in the hospital. (Currently, HSA funds cannot legally be spent on DPC membership fees, though they can go toward medication and lab services at those facilities.) Gunther says that only a third of her patients have no insurance at all.

George wonders how lower-income individuals are going to pay a couple of hundred more dollars a month for DPC on top of insurance premiums, even if they elect to go with a lower-cost high-deductible plan.

"For many patients, that's not affordable," says George. "And there's no outcome data to suggest that buying that additional access is beneficial to their health."

Defending DPC

Even with most of her patients paying for supplemental insurance or receiving insurance through an employer or the government (Medicare and Medicaid), Gunther says that cost is not a barrier for entry to DPC.

"There's absolutely no question in my mind that direct primary care saves people thousands of dollars, if not tens of thousands," says Gunther.

She cites examples of a patient with an excellent employer health plan that was still paying $10 per month for each of six different generic prescriptions. Since Gunther has her own wholesale generic pharmacy, she was able to save her patient $550 a year on medications alone, nearly the cost of her yearly DPC subscription.

Another patient came in with an orthopedic complaint when Gunther's nurse practitioner noticed a pre-cancerous lesion on the patient's skin. They were able to remove it in a follow-up appointment for $85 (if Gunther was in the office, it would have been the same day).

Gunther says that the same procedure with a traditional, insurance-billed primary care doctor would have required a referral to a dermatologist, weeks of waiting for appointments and hundreds of dollars in surgical and pathology fees.

And what about George's claim that Gunther and other DPC docs are violating their Hippocratic oath by leaving hundreds of patients behind?

"I contend that a huge chunk of those patients barely ever came in or were urgent care," responds Gunther. "I wasn't doing the work I wanted to do and they were going to the urgent care a lot, which is accepted practice."

Gunther believes there needs to be a societal shift in the way we think about how many patients a doctor can reasonably treat. In public schools, there are limits to how many kids can legally be in a single classroom.

"If you take care of somebody full-time as authentically as you can, where is that number where an individual physician is full?" says Gunther.

Gunther can't speak for other DPC physicians, but she strongly disagrees with the notion that DPC practices cater only to the healthy and wealthy, and that DPC doctors make piles of money while seeing relatively few patients compared to their previous clinics.

"Most of us are not taking a salary comparable to what we were making before," says Gunther. "Sure, there are people making double their prior salary, but most are making under $100,000, which is not competitive for an entrepreneur or a physician. But people will take autonomy and the ability to practice the way they want above a hefty salary."

For his part, George is not rooting against DPC doctors, but he challenges DPC advocates to produce studies backing up their claims. He says that in the year since he voiced his criticism in JAMA, not one peer-reviewed DPC study has been published.

"I'll eat my words," says George. "If your model is showing that it's beneficial to physicians, beneficial to patients, that you're reducing health care costs, and that there's no social inequity, then I'll eat my words. But prove it!"