In 2009, I was fortunate to receive an inspiration that came to me in a dream. I was working an ER shift in a small Colorado mountain town, after which I walked back to the apartment where I was staying and found myself pondering how many of the patients I’d just treated in the expensive hospital-based emergency setting that I could have instead safely and effectively cared for in my clinic. At least half, no doubt, I figured maybe even 75%. Many came for lacerations and minor fractures, pneumonia and pelvic infections, migraines that wouldn’t break with over the counter medications, asthma attacks and panic attacks, acutely swollen knees or elbows—all conditions that we are well-trained to handle reliably and responsibly in the outpatient setting.
So why did all of them end up in the emergency room, with all of its massive overhead expenses? The only reason these folks came to the ER was because they couldn’t get in with their personal physician, or more likely as I discovered, they didn’t have one.
I entered a few keywords into the web browser that night and came across a study which found that up to 76% of ER visits (in some communities) were for healthcare conditions which fall within the scope of outpatient primary care medicine. That night I had a dream, and the next morning I furiously typed out a detailed plan for a new kind of primary care practice, based on a membership model devoted to a reimagined doctor-patient relationship.
The core value and founding principle of this new model was for doctors to become the personal advocates of wellbeing and thriving for our patients, first and foremost. As primary care physicians, we would become unwaveringly loyal, super heavyweight champions devoted to our patients’ health. We would get to know them deeply as individuals over the course of longterm relationships built upon trust, reliability, dependability, and genuine care which would grow stronger over time.
Most importantly, we would be there when they needed us. Unlike the patients that came to see me in the ER in the days prior, those enrolled in our new model would only ever use emergency departments for life-threatening conditions like stroke, major trauma, heart attacks, and surgical emergencies. We would shield them from spending long hours in the waiting rooms of busy ER’s where they’d be exposed to dangerous microbes, and spare them from the inevitable four or five digit ER bill.
And at the same time, unlike the existing “concierge medicine” trend, we would also become overall stewards of our patients’ pocketbooks to ensure not only optimized risk/ benefit ratios (in terms of health outcomes), but also optimized cost/benefit ratios (in terms of dollars spent).
In many ways it sounds odd that this was a novel approach, or that such core values are not already part of the existing status quo, but the truth is that the insurance-based model of contemporary healthcare has insidiously carried us further and further away from this simple and obvious ethos.
The current “medical industrial complex” creates an endless series of feedback loops and vicious cycles which stand in opposition to our patients’ best interests. We physicians and other healthcare providers are therefore hobbled by an endless, arcane, and often paralyzing bureaucratic morass of rules and administrative burdens which have been gradually sucking the life out of the doctor-patient relationship, leaving less and less time for the one thing that has real value—the human connection that enables an encounter to be meaningful, rather than merely transactional (or even worse—extractive).
Independent physician-owned clinics are becoming a rare breed because of the cadre of administrative “billing specialists” and “coding experts” required to navigate the ever-changing insurance landscape sufficiently, in order to remain financially solvent. It’s a Catch-22. Most small practices cannot afford to hire those additional employees, but without them they cannot recoup enough revenue to survive.
Furthermore, as doctors, we have no authority to dictate or determine whether a certain diagnostic or therapeutic intervention or service is actually “covered”, at what percentage, or at what cost the particular service is “contracted” by the insurance company. Cash pay rates are different from Medicare rates which are different from Medicaid rates, which are vastly different from rates negotiated by each and every unique health insurance plan. The same test or service can have dozens of different fees depending on which “payor” is used. We get caught in the gears of the maddening machinery, while our patients (with good reason) expect us to be experts in maneuvering through the paper-shuffling. “Surely my doctor knows the details of how my insurance plan works. Right?”
But there are countless plans from each of the many insurance companies operating in each state and they all have different permutations of coverage for each test, scan, procedure, medication, or modality. Furthermore, there are wide ranges in deductibles, and many who carry health insurance policies are effectively uninsured because they cannot afford their deductible (which these days is usually many thousands of dollars). Many of us do our best to help our patients, only to find that 1.) there is no end to onerous rules and regulations, that b.) it would take a full time job to jump through all of the redundant, exasperating hoops, and that c.) in the end, insurance companies are not incentivized to care about our patients whatsoever.
But by sidestepping insurance altogether, we quickly realize that if you know how to navigate through the system (i.e. if you have the credentials to peer behind the Wizard of Oz screen of healthcare) you can successfully demand to know the cost of goods and services in the healthcare marketplace. Although many players in the industry still would prefer to conceal costs, an “MD” behind our name grants us access to the fee schedule at nearly any diagnostic imaging facility, lab, pharmacy wholesaler, and so on—as long as we ask firmly enough.
The most remarkable discovery has been that the vast majority of healthcare services that do not require hospital-based care are quite affordable without any insurance at all.
The fanciest and most detailed lab tests, the most high-resolution MRI scans, imaging tools to detect structural heart problems or detailed measurements of plaque, cancer gene analysis, etc…are all available for a few hundred dollars or less. Yet if you use an insurance plan that costs thousands of dollars a month you may still find that with a 20% deductible, you end up paying much more for a drug, blood test, or a scan than you would if you simply paid cash. That’s because insurance rates are massively inflated far above the “real cost of goods and services.”
Most MRI’s, CT scans, and Echocardiograms still cost many thousands of dollars. Our local hospital bills $5000 for Echos and nearly as much for MRI’s. We have negotiated cash rates with local imaging companies that perform our Echos for $200 and MRI’s for $450. A 3-view X-ray series with our local imaging partners costs $60, yet at the hospital or ER it will cost over 10 times more.
On September 5, 2020 ProPublica published the story of Dr. Zachary Sussman, a physician who works for an ER chain in Austin, TX who went in for a SARS Cov-2 antibody test—the very same test that Cloud Medical offered to all of our patient-members for a net zero profit cost of $20 in the early days of the Covid-19 pandemic. Sussman’s insurance was billed for—and covered—the entire amount that was charged. What was the charge? $10,984. This is a mark-up of over 500X the true cost of the test.
This kind of graft is so widespread it is nearly universal, albeit not always on such an egregious scale. There are many behind the scenes players who quietly turn massive profits while hiding behind extraordinarily confusing “EOBs,” billing codes, and insurance claims. And they are only able to thrive due to the vast lack of transparency that is pervasive in our healthcare system.
This is the topic of many books and articles including Steven Brill’s Time magazine 2013 cover story “Bitter Pill: Why Medical Bills are Killing Us,” which highlights the fact that a single Tylenol capsule costs $50 in the hospital, and “The Real Costs of American Healthcare” by David Goldhill. The ‘Wizard of Oz’ screen contributes to the exponential rise of healthcare costs and premiums. It is devastating to our healthcare system, to our economy, and to the entire fabric of our society. If someone is getting paid $10,000 for a $20 test, then someone else is stuck with the tab. And that someone is either the patient him/herself, the patient’s employer, or the taxpayer. All of this is completely avoidable and unnecessary.
Our newly designed healthcare model takes down the screen and sheds light on the real costs of healthcare. It also sheds the restrictive burdens of the insurance companies, and contracts directly with our patients. We provide full-stack primary care with no deductibles, no barriers, no “middle men,” no co-pays, no “prior authorizations” (the interminable process by which physicians must attempt to convince low-ranking insurance employees with emails, phone calls, letters, and faxes explaining why a service, procedure, or test is needed), no prohibition on combining services in a single visit (e.g. a mole removal during the same visit as a PAP smear)…and so on.
One of our core values is to be stewards of our patients’ healthcare spend by knowing the true cost of every single diagnostic and therapeutic modality so that we can quickly create a reliable network of resources providing the services that our patients need (including labs, tests, X-rays, MRIs, medications, supplements, etc.), all from our local community.
If our patient needs X-rays, they can be done immediately for $60. If our patient wakes up in the middle of the night with severe nausea and vomiting leading to dehydration, we can arrange an in-home IV fluid infusion for $125 and keep them out of the ER. If our patient needs an echocardiogram we can do it at our office for $200. And the vast armamentarium of generic pharmacological drugs is available for $10 – $20 per month.
No insurance is needed for this.
Primary care includes pediatrics, gynecology, adult medicine, office based surgeries, and urgent care. When practiced within it’s full scope, it encompasses such a wide swath of services for such a large portion of conditions and medical needs that some estimates suggest 90% of all healthcare encounters fall under it’s umbrella.
In the outdated conventional model, however, physicians are incentivized to not practice within our full scope. Primary care physicians “earn” nearly as much revenue for a 7 minute visit consisting of refilling prescriptions, as we do for a 45 minute visit consisting of a complicated skin cancer removal—with far fewer billing, accounting, documentation, and reimbursement hassles. Most primary care physicians practicing insurance-based medicine refer nearly all procedures to specialists who charge 5-10x more for the same service, and instead of using the skills we trained so long to develop, they ram several quick and easy refill visits into the same time slot. I know, because I was pressured to practice that way for years.
Our new model would reclaim the full role of the primary care physician, radically decrease unnecessary ER visits, and provide access and assurance to our patients “independent of time and space”: no matter where they are on the planet, and no matter what time it is, we would always be trusted, available, and accessible healthcare guides.
In 2010 we launched a rudimentary version of our innovative model, the first of its kind in Colorado and one of the first in the country, although I was not aware of the other upstarts at the time. About a year later, I became aware of a small group of other innovators who had built practices around similar principles and in 2012, began regularly meeting in Washington DC at the Capitol Hill offices of Jay Keese (a healthcare policy expert specializing in innovative payment models), flying in several times annually to compare notes, share stories about our successes and failures, and begin developing (and lobbying for) political strategies to enable our budding, and still un-named model, to surmount various legislative hurdles.
By far the most significant of these was spearheaded by Dr. Garrison Bliss and Keese, prior to the formation of our small think tank, which placed a key provision into the language of the Affordable Care Act of 2010 (Obamacare) and gave our new model legal viability. Dr. Bliss deserves great credit as the earliest pioneer of our movement. Not only is he considered to be its “founding father”, he had the prescience and determination to almost singlehandedly campaign for the insertion of a crucial amendment into the ACA legislation without which our model would have been deemed unlawful. I honor Dr. Bliss both for his trailblazing work and historic leadership, but also for his kindness, generosity, and humility in every one of our many personal interactions.
By 2013, our small quorum finally selected a name for our cause. It was admittedly clunky and imperfect, but it carried the spirit of our fledgeling movement better than any other moniker we could agree upon. We decided to call our model “Direct Primary Care” (DPC). And by the end of 2014 I, along with a dozen or so of my colleagues (with the expert guidance of Jay Keese), had spoken to countless Senators and Congressmen and women and their staffers, projected videos of our patients’ testimonials on 30 ft screens in the massive subterranean meeting rooms on Capitol Hill, and were eventually invited to present our vision at the White House to president Obama’s health care task force.
Although there continue to be various policies and IRS codes which create certain restrictions, particularly for Medicare and Medicaid eligible patients as well as enrollees of HSA plans, DPC enjoys broad based bipartisan support, and remarkably, there are now over 1300 established DPC practices nationwide.
The key tenets of DPC are:
A direct contract between patient and physician, rather than through an intermediary (i.e. insurance company) for a wide-spectrum of primary care.
- Unparalleled connectivity, generally on a 24/7 basis, via cell, text, email, or office.
- Same day appointments for urgent care.
- A low-cost monthly membership (typically approximately $80 per member per month).
- No co-pays.
- Focus on patient advocacy and cost savings (identifying the most economical sources of diagnostics and therapeutics available for patient-members).
- Primary care which is unbundled from insurance, as well as employer-based plans. Job changes are irrelevant to the established doctor-patient relationship.
In 2016 I sold the original DPC practice that I’d founded and launched Cloud Medical with three locations in Boulder county, and with the aspiration of further developing and evolving its foundational tenets into a fully integrated healthcare model. What I came to realize is that DPC is potentially the most significant innovation of healthcare reform within my lifetime as a practicing physician. But it is only a first step.
DPC has the power to create the most meaningful positive transformation of the US healthcare system in recent history: The disentanglement of primary care from the behemoth that is the medical industrial complex. And in doing so, DPC could begin to set the trajectory towards a systemic re-alignment of goals, values, and principles which are health-generating and go far beyond the existing sick-care model.
For primary care physicians—those of us that do not specialize in a single organ or a specific body part, but rather who specialize in the whole human being—for us to become enabled and empowered to pledge our allegiance to the best interests of our patients is a remarkable leap forward.
For our field of primary care, with the 220,000 physicians within our ranks—to be able to set aside the influence of insurance companies and pharmaceutical companies; to be able to find sustainable alternatives to becoming mere robot-employees of mega-medical systems, and to be able to become personally devoted health care guides to our own panel of patients—this, I believe, is the surest first step of recovering the soul of American medicine as well as saving it from near term collapse.
Some parts of the healthcare system, particularly the tertiary care settings of hospitals, may well be improved through further centralization efforts, but primary care can only flourish from its local, decentralized, nimble, diversified roots which are embedded in communities. DPC is the primary care model that is best poised to facilitate these goals, but on its own it is insufficient to address and repair the various broken elements of an ailing healthcare system.
Cloud Medical (as well as Ravel) is our wholehearted attempt at an intellectually honest and fair assessment of what works well (and in many ways amazingly so!) in our current system, as we strive to harness and bring forth the best we have to offer within it’s current framework.
Simultaneously, this is a forthright endeavor to acknowledge the areas which still need improvement (or in some cases a complete overhaul). And to meet the failures, the shadows, and the brokenness of our system with a steady gaze.
I believe we must do both (because neither is sufficient on its own) with a devoted effort, in a pragmatic, practical, down to earth, matter of fact, common sense way. It is time to practice it, not just preach it—to build it, run it, and refine it. Prior efforts at healthcare reform have not adequately assessed and acknowledged where, how, and in what ways we’re going wrong, nor have they addressed the source-causes of the systemic inadequacy and dysfunction. Thusfar, our politician-led efforts (including the ACA) have focused on shuffling around who gets stuck with the ever-increasing medical bills rather than developing strategies designed to produce different outcomes.
After four years of the Cloud Medical experiment (and six years in my prior DPC program), we can look back on our practice as a case study. From Cloud Medical’s origins we realized that the DPC concept solves only a small (but incredibly important) subset of systemic problems. We have also endeavored to bring other key players into collaborative partnerships, which has enabled us to continue evolving our ideas and testing them in vivo.
While there are surely many other ways to itemize and catalogue the aspects of our current system (which are working poorly), what follows is the basis of our philosophy at Cloud Medical, which challenges the well-established doctrine of the US healthcare system in general, and primary care medicine in particular.
I summarize my personal understanding of the key problems—my “10 heartbreaks”— which have become transmuted into the 10 core principles of Cloud Medical. I do not pretend to know what will work for others, but I offer these 10 principles for consideration, as they have been successfully incorporated into our small DPC practice in Colorado, and perhaps others may find them useful.
Ultimately we are all in this together and are co-invested in a healthy future for our children, their children, and our planet. We welcome critiques in the spirit of continuous refinement. What resonates with me most is the idea of collective intelligence rather than group think. I believe we need less consensus panels and echo-chambers, and more micro-experiments, prototypes, and idea labs integrated into collaborative networks. I believe in the principle of “I don’t know, but we know”. And I believe that it really is possible to “remember the future”.
The kind of future that I “remember” enjoys and benefits from a healthcare system which not only incorporates the 10 core principles mentioned above, but is also imbued with two central values that were originally present in the indigenous healing traditions, and which have become lost or discarded along the way. I believe that we can’t move forward without bringing them back.