Health Care without Health Insurance

Dr. Ryan Neuhofel joins us to discuss what direct primary care is and how it could benefit you and your family.

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What if there was a way your family doctor could provide you with better care for less money and do it without using health insurance at all? Dr. Ryan Neuhofel joins us to discuss what direct primary care is and how it might benefit you.

Doctors offices spend an inordinate amount of time and expense filing paperwork with health insurance companies. By not taking health insurance, direct primary care physicians, like our guest Dr. Ryan Neuhofel, can simultaneously increase the amount of time patients get with their doctors, create price transparency for medical services, improve the work-life balance for physicians themselves, and save money doing it. It’s a radical idea when the conversation about fixing healthcare involves getting more people on health insurance and spending more money in so doing, but it could transform how 80% of Americans access healthcare for 80% of their lives.

What is direct primary care? Is it a more efficient way to deliver care? What is “telemedicine”? Has primary care become a gate-keeper rather than an actual provider? In the future, could we have a system that is like “uber for doctors”?

Further Reading:

Direct Primary Care website

Dr. Ryan Neuhofel website

Wanna Unbreak Medicine? Dr. Ryan Neuhofel Shows Us How, Against Medical Advice Episode 025

Building an Alliance for the Future - Keynote: Dr. Ryan Neuhofel

Related Content:

Better Choice: Healthcare Solutions for America, Free Thoughts Episode

How to Fix Health Care, Free Thoughts Episode

Why Can’t You Email Your Doctor?, Free Thoughts Episode

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00:06 Paul Matzko: Welcome to building tomorrow a show exploring the ways that tech innovation and entrepreneurship are creating a freer, wealthier and more peaceful world. As always I’m your host, Paul Matzko and with me in the studio today is Matthew Feeney, Cato’s Director for Emerging Technology. Joining us remotely is Dr Ryan Neuhofel whose medical practice in Lawrence, Kansas, which little Go Jayhawks here is part of a growing movement in healthcare called Direct Primary Care. Welcome Ryan and why don’t you start us off by telling us what Direct Primary Care is and how it differs from the experience most folks have when they visit the doctor’s office.

00:42 Dr. Ryan Neuhofel: Yeah, well, thanks for having me, Paul and Rock Chalk. So Direct Primary Care is simply put a relationship between a patient and a primary care doctor or provider. And I think it’s different in a lot of ways. The first and most important way is that it removes all of the normal middlemen and third parties that are involved in traditional health care in America. So, whenever patients join my practice, it’s much like joining a gym or subscribing to Netflix and we are serving our patients directly. And by doing that, it allows us to create their needs in a much more, I think efficient and creative way utilizing technology and just a better experience for their healthcare needs.

01:25 Paul Matzko: Yeah, so like the Netflix comparison, I assume that means you have a large catalogue of services that very few people actually want to watch, but have to because there’s nothing else on.

[laughter]

01:34 Dr. Ryan Neuhofel: We have the best program in here, we have the best program.

[laughter]

01:39 Paul Matzko: That’s good, so if I… I’ve never had a direct primary care physician and to my detriment, it sounds like, after reading up on what you do. So I’m used to going to the doctor’s office, I want to be checked out because, I don’t know, I have a rash that’s been persisting on an embarrassing part of my anatomy and I want the doctor to take a look at it. I go in, I wait quite a while. The doctor pops in for about five, ten minutes, says, “Hmm, yeah, that’s a problem. Here’s some random steroid cream. Come back if it doesn’t clear up”. On your way out, you go, you pay like a $20 copay, and then maybe a few months later, you get who knows, maybe that $20 copay covers part of it, but you get a bill for some amount of money and insurance may or may not cover the entirety of that bill. So how is that experience different if I went to your practice?

[chuckle]

02:33 Dr. Ryan Neuhofel: Yeah, I think you described it perfectly. There’s so much wrong with the American healthcare system both from an economic and personal standpoint. And I think most people feel that and that includes doctors, I think a lot of patients are frustrated, but physicians particularly in primary care are just as frustrated and know that things could be a lot more transparent and efficient if we built a new way of interacting with our patients. So that situation that you just described is on top of the exorbitant amount of money we spent to access that system. So whenever I ask people how much they pay to go to the doctor and they say, a copay, it’s like, well, the average American is spending $10,000 per person per year to access the $20 co-pay.

03:18 Dr. Ryan Neuhofel: And so it’s even more insane than just a terrible experience, it’s how much we pay for that terrible experience, and if that were any other industry, I think we would be marching in the streets and have pitch forks and say, “No, this is not acceptable”, but in healthcare, I think we’ve just been beaten down to the degree that we kind of accept it and live with it and direct primary care movement and practices are trying to change that. But it’s not easy because people’s mindset is that, well health care is health care, it’s important and so it’s okay if it’s inefficient, it’s okay if it’s not transparent. There’s all this funny stuff that happens that no one understands, but that’s okay ‘cause it’s health care. And I think we have to get beyond that mentality and restore transparency and innovation back to health care and I think the DPC model is doing that for our patients.

04:05 Dr. Ryan Neuhofel: So, in the situation you described I would first of all start with just discussing the situation with my patient remotely. I would say at least 50% if not more, of all medical care could be delivered remotely through a phone call, through a text message, some type of online service. And we’ve seen glimpses of that in what we call Telemedicine, but telemedicine is kinda become this industry that’s apart from a normal relationship with your doctor. And so I think what we do is we just communicate with our patients like we would our friends and family. So that’s where I always start things, so if I can manage something with a quick phone call or text message and get to the bottom of it, then that’s great. It’s good for me, it’s good for the patient. The notion of having to bring someone in every single time they have a simple question or a simple rash is kind of ridiculous in 2018.

04:57 Matthew Feeney: Are there particular technologies on the horizon or emerging at the moment that are particularly exciting in this sector? So text messages and Skype have been around for a while, but this does seem like an area where you could certainly take advantage of a lot of emerging tech. Is there anything in particular that you are keeping your eye on?

05:19 Dr. Ryan Neuhofel: The funny part is, is that in healthcare we’re literally 20 or 30 years behind most other industries, so the health care system, the normal healthcare system still largely operates on fax machines. [chuckle] And so it’s funny, whenever I say I text message my patients people ohh and ahh and think that’s innovative. [chuckle] But it’s kind of funny to me ‘cause I’m like, well, that’s how I communicate with everyone in my life. I think even getting to the point where health care operates like 2018 is impressive. But yeah, whenever you strip away all the normal insurance and regulatory things that come along with traditional health care, I think it allows you to rethink how we do everything. And so the problem in healthcare technology, if you ask most doctors do they like electronic medical records, or do you like anything related to technology and their job. They say, “No we hate it, it makes us miserable.” And it’s not because the technology itself is inherently bad, it’s just being asked to do the wrong thing.

06:20 Dr. Ryan Neuhofel: It’s being asked to maximize codes and documentation for billing purposes, or regulatory purposes as opposed to making the experience of the patient and the doctor or the decision making of the doctor better. So I think there’s this whole untapped potential in healthcare and technology, because we’ve been asking computers to do the wrong things for so long.

06:42 Paul Matzko: So trolling around in your website a little bit. My impression of how the DPC model works for consumers is, there’s no copays, you pay like you mentioned, like a membership fee, an annual or a monthly fee for you or your family anywhere between $50 and I don’t know, $130 for access to primary care services. But that’s something that if I was part of your practice, I would be able to contact you 24/7. I could email you an image of my rash or I could send you a text and ask you a question. Even if I paid a little bit extra, you would come to the house for a house call.

07:29 Dr. Ryan Neuhofel: Absolutely.

07:32 Paul Matzko: And at least in theory, like on the website, I would know what basic services cost, I mean, that membership fee would pay for visits, doctor’s visits, and some other basic services. But then if I wanted, say, an xray, I go on your website and it says, here is X dollar amount, I forget what it was, 50 bucks or something for an xray, $450 for an MRI. Like there’s also price transparency there.

08:00 Dr. Ryan Neuhofel: Yeah, yeah. What we try to do for our patients is, is we try to not… Obviously my decision making and my judgment is probably the largest part of primary care. But whenever we have patients who need something else, an xray, a procedure, we try to do everything we can inhouse, and I think people underestimate how much a primary care physician could do if given the opportunity and the time. So we try to do as much as we can inhouse, and that’s obviously easy for us to be transparent, because we don’t bill insurance companies we have to tell people up front what it cost and so we see enormous savings in things like labs and medications and radiology procedures across the board, our patients pay much less than what they would using insurance. But even if someone needs something outside of the scope of primary care, we still are in a position to advocate for transparency and fair pricing. So if my patient needs an MRI, I don’t own an MRI machine myself, but we aggressively make sure that our patients are getting a good deal and good service. So I think that’s the role that primary care could and should play is to be kind of a quarterback and a partner for patients in all of their health care. Hopefully, most of the time it’s just primary care but if it goes beyond that, we can also help.

09:13 Matthew Feeney: So a question about the pricing on the website. I think it’s rather odd that when I first saw that, I think that’s really interesting, but why isn’t this the norm? It seems like we expect prices to be transparent in most things we do. When we go to the grocery store, we can see what things cost. Do you see the lack of price transparency in the current health care system as a feature of any particular kind of regulation or is it just something we’ve grown accustomed to? Not that there’s exclusive.

09:49 Dr. Ryan Neuhofel: Yeah, if you go back in the history of American medicine, there’s many things that have happened from a regulatory standpoint that have led to what we have now; And really what we have now is not insurance, it’s called managed care. So if you… People use the term insurance in the health care sector much different than they would use the term insurance in the automobile sector, the house sector for insurance. And so what we’re really doing at this point is giving all of our money, whether it’s something expected or something unexpected, to a third party a managed care organization, private or the government, and expecting them to manage all of those dollars for us. And so, inherently, when you do that, it’s gonna remove transparency because it’s a third party paying for it and there’s gonna be a lot of back room negotiations and deals for what that price is, and ultimately the patient is already kind of prepaid for that and so there’s really not like a motivation to… For the provider to tell the patient what it’s going to cost because they think someone else is paying the bill.

10:53 Dr. Ryan Neuhofel: So you can imagine if we did this with our groceries, and you layer employers on top of that, [chuckle] makes it even more complicated. So imagine if we did this with our groceries. An employer said, “You know what food’s expensive, and some people can’t afford it, maybe it’d be better if we just managed your food dollars for you”. And so the employee herself can’t really manage food dollars, but we’ll hire a company that manages your food dollars and so we’ll give your food management company all of the money.

11:20 Dr. Ryan Neuhofel: And then that food management company will then network with a bunch of stores in your neighborhood hopefully that you like. And then you’ll go to the store and you really don’t know what anything costs but don’t worry when you check out there might be a co-pay there might not be. There might be a deductible and you can’t get this and that because the rules of the plan say you can’t get that, but at the end of the day, you’ll get a bill later on, and then everything will be fine. I mean, you can imagine what would happen to the grocery store industry if we attempted to do that. And I think it would look very much like what health care looks like today.

11:51 Paul Matzko: What a mess. So I like the idea that what we call “Health Insurance” is not really health insurance. So that now your practice, just for our listeners, you don’t take any insurance at all, this is all out of pocket payments for all your customers, right?

12:05 Dr. Ryan Neuhofel: Yep.

12:06 Paul Matzko: Now, I’ve heard you talk about, I might get the exact number wrong here, but you’re like 80% model, where you’re trying to provide, you basically say, primary care doctors can provide a large majority or 80% of the healthcare needs for most people for about 80% of their life. And like they’re… At the beginning and end, like end of life care that last 20% which is a very expensive… Most of your healthcare expenses do fall during end of life care. But what you’re trying to say is, for most people, for most of their life, you can provide a service much more efficiently and with better quality than how our current system provides the same kind of care through insurance. Am I getting that number, right? Was it 80% something like that?

13:00 Dr. Ryan Neuhofel: Yeah, absolutely, yeah. And so I think probably one of the biggest challenges of this model and movement is, because of the powers that be, that for decades of undervalued Primary Care, and I won’t go into all the boring details of this but Primary care is kind of considered the bottom totem pole of healthcare. So if you’re a specialist, you do procedures, you’re glorified, you’re paid a lot more money, your value is a much higher according to the people that control the money, where as primary care is in the bottom of that. And so what has happened unfortunately over decades of time is that primary care has become a gatekeeper more than an actual provider. I joke sometimes that some of us become “referralists”, as opposed to doctors and so I think most people don’t even appreciate or realize the amazing scope of care that a primary care provider could offer them if given the opportunity. But because of our time is so limited, we get so rushed. Your knee hurts, you go see a knee specialist, you have a problem with anything related to your heart, you go see a cardiologist and… But we went to Medical School, we’re physicians, I’m very capable of caring for most people’s needs most years of their lives.

14:12 Dr. Ryan Neuhofel: And so I think you have to understand that before this type of thing starts making sense. And so because we have more time with our patients, we can do more research for them. I think that personal relationship is really important, but also the time that I have to care for them increases. And so, our model works much better if you understand that primary care should be what most people need most years in your life. Of course you could walk out in front of a bus or you could get hospitalized or need major surgery, but that’s not gonna happen to most people, most years of their lives.

14:45 Paul Matzko: So you still see a value for insurance that’s truly insurance, like you should have some sort of catastrophic high deductible system or insurance program for most of your life for those low likelihood, but still present dangers that could happen to you and cause like medical bankruptcy if you didn’t have insurance.

15:10 Dr. Ryan Neuhofel: Yeah, that’s a financial arrangement, and I think we conflate health care, health insurance, government assistance, we throw all this in one pot and just call it health care. And what is health care? Health care is this extremely diverse set of goods and services that range anywhere from pennies to tens of thousands, hundreds of thousands of dollars and everywhere in between, and stuff that’s really common and stuff that’s not likely to happen to you. And so, we throw all of it into this just messy box of insurance care, government assistance, all these things. And if you can kind of separate those things out and think about it just from a financial standpoint, yes, if something is unexpected and expensive insurance starts to make sense.

15:51 Dr. Ryan Neuhofel: The tradeoff of that makes sense. But if it’s relatively affordable and you can manage it yourself if you expect it to happen, then insurance doesn’t really make much sense. So I think if you separate those topics out and realize that most people’s primary care, outpatient care could be managed without insurance and in a much, I think much more efficient way. Then we could reserve insurance however we arrange that for those big things because insurance is the most inefficient way to pay for anything. I mean, it’s inherently inefficient because there’s lots of people involved. So, if we reserve insurance for what it’s intended for, it would be much cheaper. And I think the care that most people need most of the time would be a lot better.

16:29 Matthew Feeney: What is the financial background of a lot of your, or people who use this service? I can imagine some listeners thinking, “Well this sounds like something for the upper middle class or the rich. It’s fancy concierge medicine”. Is that true or what kind of people do you see using your service?

16:49 Dr. Ryan Neuhofel: In my practice, and I think I’m relatively reflective of most DPC practices, it’s probably the opposite. [chuckle] With our price point as you guys mentioned, most DPC practices are $40 to $80 a month for adults, so it’s very affordable, it’s a monthly basis, there’s no huge upfront cost. And I think most of the patients we’re serving are actually probably middle or lower middle income and suffering with high deductibles or some people who are uninsured. And so in my practice probably nearly half of my patients are uninsured. Another quarter of them have extremely high deductibles and couldn’t afford care in the traditional system. So I think because of, I guess the high quality of what we do when we say we do house calls and longer visits, there’s a history of something called concierge medicine, which is doctors catering to rich people and charging them thousands or tens of thousands of dollars for better access. So I think we kind of got lumped in with that because of the fact that we say we’re providing better service.

17:46 Dr. Ryan Neuhofel: But from a financial standpoint and the trenches for our practices, we’re serving as many lower income people as we are upper. But my practice runs the gamut. And so, yeah, I think it’s a great value for anybody, and I think we’re probably serving more people who fall through the cracks than people who have great insurance or who are wealthy.

18:09 Matthew Feeney: Your mention of houses reminded me of a thought that occurred to me. I remember years ago with the emergence of ride sharing, I thought, well, eventually, you’ll have services like Uber for doctors, right? You can have technology that will actually directly connect patients with their doctors in that way. Are you aware of any one building an app or anything like that for these kind of practices where… You already text and Skype patients, but why not have something where you can press a button and a doctor will be on their way?

18:41 Dr. Ryan Neuhofel: Yeah, I think medicine, health care, is unique to those other industries, but I think there are a lot of parallels with things that have happened in other industries that have been disruptive. There are lots of vendors and companies out there trying to innovate in that way that you’re describing, but I think that health care is challenging in a lot of ways. It’s challenging for us to grow our practices and our model, and until we move outside of this kind of insurance, third party managed system, I think that a lot of those things are probably not gonna happen, but if we returned control of the dollars to individuals themselves, I think you would just see a flood gate of innovation on which you’re describing open. And I think DPC would be one way to do that and I think it’s a really efficient way to do that, personal relationship with your own provider who could meet you online or meet you at your house or meet you anywhere that you needed. But I think it would be amazing to see that type of innovation take hold. But until we move away from this insurance centric system I don’t think it’s likely to happen.

19:45 Paul Matzko: So I think our audience is going to have a robust appreciation for the old TANSTAAFL acronym, there ain’t no such thing like a free lunch. And we’re getting a sense of how this model is good for consumers. Like I’m getting better care, personal relationship with my doctor, more time with them, more input from them for less money. And that sounds great, but I think the logical thing is, “Hey, this is less money. So does this mean doctors are getting less money? Can doctors still get a decent pay check with lower costs for patients as well?”

20:23 Dr. Ryan Neuhofel: Yeah, so if you look at the money in health care, everyone has their scapegoat or their boogeyman about why health care is expensive, but the truth is, across the board, American health care is more expensive at every single level. So physicians in the US, certainly some specialties in the US, get paid way more than other countries, but for primary care we’re really not that much different than most other countries. And the DPC model, the reason that we can charge what we charge is because we have reduced administrative costs. So even though my revenues aren’t that great based upon what I charge and the number patients I have, I employ one nurse as opposed to an army full of coders and billers and clerical people. So at the end of the day my salary is gonna be about average for a family position in the US, which is just fine by me. Some DPC doctors will make more than that, some certainly make less than that when you start a business. But I don’t think the real driver of this model is physician income, but we have to make it competitive with what else is available, or otherwise physicians aren’t gonna take an 80% pay cut most likely.

21:30 Paul Matzko: So that brings something else to mind. I have a partner who’s a health professions advisor, and I know one of the big concerns for students looking to medical school are concerns about physicians own mental health and the… My understanding is the suicide rate for physicians in the US is the highest of any profession. It’s something like three to four times higher than the general population, doctors deal with higher levels of depression with mental illness. So when you refer to something other than the financial benefits for doctors, is that what you’re thinking of? How has being a DPC physician affected you personally, or doctors you know in those aspects?

22:14 Dr. Ryan Neuhofel: I say this, literally in some cases it’s been life saving. What you mentioned is absolutely true. And just in the last few years there’s been a lot of media attention to this. I don’t know the statistics of physicians are the highest risk of suicide, but I know it’s much higher than the general population. And I think if you really break down this problem, physicians went into medicine, particularly ones who choose primary care, for lots of reasons. But to have a rewarding career, most of us are very mission driven, and wanna a good relationship with our patients and really help people, I know that some people in America believe that physicians are just this greedy bunch of money driven people, but the truth is, is most of us didn’t go into it for that, particularly the ones who went into primary care. If we wanted the money we would have went into dermatology, not primary care.

[chuckle]

23:11 Dr. Ryan Neuhofel: But the problem is, when we get out into the real world, we’re met with all of these other administrative things, and a lack of opportunities to develop the relationships, and to care for people in the way that we always envisioned that we would when we decided to become a doctor. And it’s really, really hard to become a doctor. It takes a long time, it takes a lot of money, you give up most of your 20s. And then when you get out you kind of say, “Okay well, there’s a light at the end of the tunnel.” And I think what a lot of doctors find is there’s not a light at the end of the tunnel, they’re hit with a whole other set of stressors and they’re not able to fulfill that vision of what they wanted to be, and that’s obviously becomes an existential crisis, I think, for a lot of doctors. And so we use the term burnout, which I really hate, because it means that there’s something wrong with the doctors, that they’re just not tough enough, or resilient enough to withstand it. But I think the pressures of the system are just too much for a lot of doctors, and so doctors can put their head down and drudge along and that’s where that depression and burnout comes from, or doctors quit. A lot of doctors halfway through their career decide, “I can’t do it any more,” and they take a job that’s not clinical, they take the administrative job or they retire early.

24:22 Dr. Ryan Neuhofel: And so I think DPC is great for patients but it’s also really great for doctors. And I don’t know how many people know doctors, but you definitely do not want a doctor who’s burned out and stressed and depressed. That is not a good way to provide medical care to people, ‘cause if you’re not happy and healthy it’s really hard to be a doctor even with those two things. But if you have a doctor who’s feeling crummy themselves, then it’s not the best situation for patients.

24:48 Matthew Feeney: So maybe I should have asked this question at the beginning, but where did this idea come from? Where did you come up with the idea? How much of it was looking at the current system, how much of it was looking at the mental health of your colleagues, what was the genesis of all of this?

25:10 Dr. Ryan Neuhofel: Really, it was a grassroots movement. I started my practice seven years ago in 2011, and there was a handful, maybe a dozen at most, doctors operating in this model in the US, and each of them had their own story of, “We’ve had enough and we’re not gonna take it anymore and we’re gonna do something different.” And we all did this on our own way. We started from scratch and said, “What would it look like if we designed a practice that wasn’t centered around insurance?” And a lot of us came to the same conclusions that this is how things should look, and have our own flavors of that. But since 2011 now there’s been nearly a 1,000 other doctors in the US adopt this model, and most of us operate in a pretty similar fashion.

25:55 Dr. Ryan Neuhofel: So there’s no governing authority, there’s no single organization that’s telling us how to do this or how to bill. It’s truly a grassroots movement of doctors helping other doctors do this, and it’s awesome to see so many doctors do this over the last six or seven years without a mandate or some type of governing authority to make it happen.

26:16 Paul Matzko: So since you started the practice, I know even actually, I looked at the DPC frontier map of practices, and it looks like there’s been a lot of growth for the Direct Primary Care movement just in these last couple of years. So let’s imagine a future where %90 plus of primary care physicians are DPC. How would that… Is there any effect? Is there any ripple effect on other medical professions? So would this affect surgical care, or specialist care, the hospital system itself, or is this something that really is just gonna be contained to primary care physicians?

26:58 Dr. Ryan Neuhofel: Well I think it depends, because as I said healthcare is this really diverse thing. I think there’s a lot of services outside of primary care that could be delivered in an affordable direct manner. DPC is kind of the epicenter of that, but there’s definitely people on the margins who are showing that we could do health care in a direct, simple manner. It may not make sense in a membership sense in all… If you get a surgery, that doesn’t make sense to have membership. [chuckle] But there are people who are doing quite expensive surgeries for a lot less than what people think they could be done for. So I do think that that direct model can extend beyond primary care, but there would be a lot of other things that need to happen in order for that to be the norm.

27:42 Dr. Ryan Neuhofel: I keep coming back to this, but I think if we created a system where individuals controlled a decent chunk of that money, and it wouldn’t have to be all of it, but if we had some type of system where everyone had a health savings account or a personal health account of some type, and maybe it would be subsidized for lower income people, maybe employers could contribute to it, it would really change the way that healthcare providers had to serve patients. It would force us to be transparent. So instead of us answering to third parties behind closed doors, we would be answering to our patients, and I think it would really revolutionize almost all aspects of health care, but there’s always gonna be a need for some form of assistance for people, whether they be of lower income or whether it be something catastrophic, we’re always gonna need some form of that. But I think the vast majority of people can manage their own health care dollars most years of their lives.

28:33 Paul Matzko: Yeah, imagine giving people agency over their bodies and their money. It is a… [chuckle]

28:37 Dr. Ryan Neuhofel: It’s a radical concept.

28:38 Paul Matzko: [chuckle] It really is. Which actually reminds me, I’ve always thought one of the most damning indictments of medical expenses is that any… It feels like any medical procedure that doesn’t fall under the umbrella of health insurance has gone the opposite way of the general cost curve, the upward bending cost curve of insurance provided healthcare. So stuff like elective surgeries, like LASIK, plastic surgery, we’ve seen in those fields the exact opposite trend, where something like LASIK is exponentially less expensive now than it was when it first came out on the consumer market. Which I think again goes to your basic point, which is that we’ve gotten used to a system of constantly increasing medical prices that are opaque, that we don’t know what our procedures are, there’s multiple intermediaries in between us and our actual physicians, and we’ve gotten used to that world, but there’s this alternative medical universe that’s at the margins, but it’s in front of us. And we have an example that things could be different and we could do it more cheaply.

29:56 Dr. Ryan Neuhofel: We’re doing it right now. So people, LASIK is a great example. Critics of that say, “Well, it’s elective and so it’s not lifesaving.” Most medicine is elective, very few percent of health care dollars are spent on actual true emergencies. Most things now, especially with chronic diseases being so commonplace, most people’s health care is gonna be… It doesn’t happen today, it’s an elective thing. And we could think about things before we did it. But in my own practice we have seen this with MRIs. People think MRIs are one of the most expensive imaging procedures, right, and so, “Oh well, primary care is okay but MRI is something… MRI is too expensive.”

30:37 Dr. Ryan Neuhofel: In my market, because there’s more and more DPC doctors and patients demanding transparency. Five or six years ago, if my patient elected to pay cash for an MRI, about the cheapest deal I could find was 600 bucks, which is actually not bad compared to $2000 or $3000, which most hospitals charge, but over the last five years we’ve seen that price go down steadily, and now my patients pay $250 to $350 for an MRI of the knee. And so, if you can realize that, that a lot of medical care could be affordable, and sometimes pretty expensive stuff like an MRI, it would change people’s mentality about what’s possible. So it’s not just limited to LASIK or cosmetic surgery. I have diabetics who save hundreds of dollars a month on medications and labs, and this is managing diabetes, it’s pretty important. So I think we need to think broader than those elective things, and DPC is showing people that we can do that. If I have a patient who breaks an arm and doesn’t need surgery, most likely I can manage it with a splint that costs about 10 bucks, an x-ray through our services is about $35 to $40, and if they need a cast a few days later it’s about another $20.

31:47 Dr. Ryan Neuhofel: So if one of my patients breaks their arm, it’s less than $100 to manage a broken arm completely. Whereas if you’re in the normal system, people say, “Well a broken arm, that’s gonna cost thousands of dollars”. So it’s not limited to just elective things, it could be relatively serious injuries, it could be management of chronic diseases, workup of complex problems, and I think we could see that same thing all across the board.

32:14 Matthew Feeney: So if there are any exhausted doctors listening and they’ve become inspired by this, I’m hoping you might be able to outline, if someone who’s interested in setting up a practice like this, what are the regulatory hurdles that exist on this landscape at the moment? How easy is it to set something like this up?

32:33 Dr. Ryan Neuhofel: You know, that would be an episode unto itself.

32:35 Matthew Feeney: Okay. [chuckle]

32:37 Dr. Ryan Neuhofel: But luckily there now are organizations and resources for physicians who are wanting to operate in this model. I happen to be the president of a newly formed organization called the Direct Primary Care Alliance, or DPC Alliance, and we’re a group of doctors who help other doctors do this type of thing. There are conferences, there’s one upcoming in Orlando put on by an organization called Docs for Patient Care. You’ll have hundreds of doctors there teaching each other how to do this type of thing. So when I started six or seven years ago, I would literally… It was just like me and my laptop making up stuff. And luckily now, there’s some blueprints and there’s some people who help navigate some of those things, but it’s an entrepreneurial thing for most of us, so if people have an entrepreneurial spirit and they wanna do this, it’s definitely feasible. You don’t need to be a business guru to do this.

33:29 Paul Matzko: So one of the things we’ve touched on a couple of times here are health savings accounts, something that are only available, I forget the percentage of Americans, but if you have a high deductible insurance plan through your employer you may be eligible to set aside pre-tax income up to… I don’t know, it was $300, 500 a year for individuals, and then that pre-tax money that’s not… You’re not paying income tax on. If you spend it on medical expenses you don’t have to pay taxes when it comes out, so it’s heavily tax advantaged. Now my understanding is, you actually can’t… This surprised me when I found it out, you can’t spend health savings accounts money on Direct Primary Care fees. Why is that? That’s bizarre to me.

34:20 Dr. Ryan Neuhofel: [chuckle] Well, you should ask the IRS that.

[chuckle]

34:23 Dr. Ryan Neuhofel: So we did, and their answer is nonsensical. So there is a bill before Congress. In fact, it just got passed through the House. The recent HSA legislation HR 6199, that included a lot of different HSA reforms, will clarify this matter. But yeah, originally when the HSA legislation was written, it’s very complicated, it’s tied to a bunch of different requirements including being part of a high deductible health plan, and there’s a bunch of other restrictions and definitions. So Direct Primary Care didn’t exist when HSA law was put into place, and so because it was never defined, they say that, “Well, it’s not a medical expense.” Somehow my services are not a medical expense according to the IRS, at least depending on which attorney and accountant you ask.

35:08 Dr. Ryan Neuhofel: So there will be a bill that I think is very likely to pass through Congress this year that will clarify this matter. But I think HSAs are just a construct, I don’t know if HSAs are really the best thing. If it were up to me, people would just own all of their own money and spend it, and not have all these weird incentives to save, or avoid taxes, or all that stuff, but HSAs are what we have right now, and it’s one of the few vehicles where people can think about spending their own money, even if it’s not ideal maybe from a… If I was designing a system from scratch, that’s maybe not how I’d do it. But I think HSAs could be used in a lot of different ways. I don’t think they should probably be tied to insurance, I think it should just be a vehicle for personal savings and to spend your own money. We could subsidize them. We’re hoping to see that in Kansas, there’s a lot of states who have considered implementing DPC into Medicaid plans, which I think would be fantastic, and I think the best vehicle to do that would be a savings account, HSA, or food stamp like program, where we could subsidize lower income individuals to manage their own dollars.

36:13 Dr. Ryan Neuhofel: And so there’s some states experimenting with that. We’ve talked to CMS about Medicare doing such a thing, but again, it’s moving outside of that normal thinking, and so I think HSAs, or at least the idea of something like that, could be much more broadly applicable than just helping people avoid taxes.

36:33 Paul Matzko: It feels like we’re in a moment of bipartisan interest in returning financial agency to people. Some of that logic applies to the support for basic living income, replacing means tested, heavily regulated, bureaucratically organized welfare provision, with just giving cash, giving money to people who know best how to spend that money for themselves. And so that same kind of attitude seems to crop up here in that bipartisan interest in giving people agency over their money. Now, my understanding with the DPC movement is that this is not a right wing or a left wing thing, that there’s broad, bipartisan ideological interest in this from physicians of all different political stripes.

37:28 Dr. Ryan Neuhofel: Oh, yeah, for sure, yeah. I think sometimes… Some of us are cowboys and have political views, and so I think there’s been some people who try to pigeonhole us as some type of political movement, but my friends who do DPC are all over the map politically and ideologically. We do this because we see it’s the best way to provide care to our patients. And of course, in health care everything has just been so politicized that people have to figure out, “Is this anti-ObamaCare or for ObamaCare, TrumpCare,” whatever. I don’t think DPC is any of those things. I think it’s just a better, more efficient way to deliver care. And what we have seen when we spoke to people in DC is that there really was an ideological divide in terms of what we do.

38:12 Dr. Ryan Neuhofel: Now the HSA issue has become politicized, because HSAs as it’s structured, arguably are more advantageous to someone of an upper income who’s trying to get a tax deduction. So generally, democrats are opposed to the idea or even the word of HSA at this point, but I think if we could reframe that around the… As you mentioned, the individual ownership of those dollars, I think it would be a little bit different, but still it’s not an easy thing. I think there’s some industrial… Will be some opposition. Managed care organizations, insurance companies make their money by managing money, and so the notion of returning some of those dollars to individuals, I think, will be met with some serious opposition. It probably wouldn’t be political. Probably more business.

39:00 Paul Matzko: Less likely to work with you. Practices that are insurance funded. Interesting. Well I can imagine that as the DPC movement… As long as it was small and pretty niche it’s something that could be tolerated, but as it grows to be an increasingly large percentage of primary care physicians, it becomes more of a concern for insurance companies and their lobbyists. One last thing I wanted to ask you about, Ryan, that I came across a blog post you wrote about your position as a practice of accepting vaccine skeptics as patients. I thought that was interesting. I’m not a vaccine skeptic myself, but it reminded me of this broader debate for health care consumers about distrust in the medical establishment. So some of this is the homeopathic world, is alternative medicine that… And because of how opaque the medical and insurance and managed care systems are, and because you only have eight minutes with your doctor because you don’t have any existing relationship, you’re just the cog in a grand machine, that people turn to things like vaccines skepticism, or homeopathic remedies partly because they actually feel heard, they feel listened to. So what’s your experience been with allowing vaccine skeptics to be at your practice and interacting with the homeopathic community as a medical practice?

40:34 Dr. Ryan Neuhofel: I honestly couldn’t have said it better than you just said it. [chuckle] I’m not just blowing smoke. No, I am a… Just to set the stage here for what you said to the audience, I’m a very science-based, maybe you wanna call evidence-based, but that terms a funny term. So, I am traditionally trained physician, I do diabetes management, strongly recommend vaccines, do procedure, so I’m not an alternative practitioner by any sense. In fact, I’m probably annoyingly the opposite way. I’m a pretty strong skeptic in a lot of ways. But I think you nailed it. The truth is, is most people are not scientifically literate in these matters. They may try to educate themselves and read online, but they don’t have the basis to understand a lot of what they read, and a lot of it comes down to that trust and relationship. And because people feel so disenfranchised from traditional medical care and feel so rushed and not heard, they gravitate towards things that make them feel like they’re being heard.

41:34 Dr. Ryan Neuhofel: And so I think there’s a lot of things that have taken a hold. I think the resistance to vaccine is probably number one, and it’s a huge problem and we can do lots of things to try to encourage or educate the public on vaccines, but I don’t think anything is more important than having someone who’s well trained and educated, have a good relationship with that patient. So, my decision to take care of un-vaccinated patients, it confuses a lot of doctors because I think a lot of doctors’ inclination is to reject people who don’t do what they say. The paternalistic view. And a lot of my patients don’t do what I say.

[chuckle]

42:08 Dr. Ryan Neuhofel: I have diabetics who I say, “Stop eating Twinkies,” and they keep eating Twinkies. But I’m not gonna tell them they can’t be my patient because they keep eating Twinkies. Im gonna tell them it’s bad for them, I’m gonna tell them they should get vaccines, but ultimately, they are owners of their own bodies and get to decide what they do. But I think unless we continue that conversation and have a good relationship with people, that we’re never gonna change the tide of that. And so I wrote that article basically to try to convince my colleagues that, “Don’t shut off lines of communication as frustrating as it might be.” Because again, if we rejected people who didn’t do the right thing as we saw it, then they’re just gonna go to find someone else who affirms what they want to believe anyway.

42:45 Paul Matzko: Ryan thank for your time, thanks for coming on Building Tomorrow. I’m just disappointed that you don’t have your practice in New Jersey where I live. So if you ever decide to move to the Princeton area, let me know.

42:55 Dr. Ryan Neuhofel: Yeah, well, I’m not that cool, but…

[laughter]

43:00 Dr. Ryan Neuhofel: You mentioned earlier, if anyone’s looking for a DPC practice, the best resource out there is, dpcfrontier.com. And you can Google that as well. And there’s like I said, 800 to 900 DPC practices across the country. So if you’re looking for someone nearby, you could probably find somebody.

43:16 Paul Matzko: Yeah, we’ll definitely post the link to that in the show notes, but thank you again Ryan, and to our listeners, until next week, be well.

[music]

43:27 Paul Matzko: Building Tomorrow is produced by Tess Terrible. If you enjoy our show, please rate, review and subscribe to us on iTunes, or wherever you get your podcasts. To learn about Building Tomorrow or to discover other great podcasts, visit us on the web at libertarianism.org.