“A university study found that patients treated in one Apex practice enjoyed average 35-minute office visits, more than four times longer than the average visit in a more typical practice. They also spent 85 percent less money.”Kathlerine Restrepo, John Locke Foundation press release of March 22, 2017
As discussed in a prior post, Ms. Restrepo is spinning more than a little bit in sourcing this information to a “university study”. In this post, however, we primarily address the substance rather than the provenance of her claim of four fold increases in patient visit times.
The work to which she refers on visit length is part of an unpublished course project by three post-baccalaureate management students from NC State: Ben Matthews, Chad Crafford, and Charles Queen. Mr. Queen has told me that only the 35-minute figure came from actual field research; the eight minute figure used for comparison came from one or more publications.
It is easy to find printed anecdotes about eight minute primary care appointments, frequently in the form of recollections from a physician explaining his migration to direct primary care. There are also diatribes about how all the time of a visit does not count when the doctor looks at a computer during some of the time during that visit. But there appears to be no published research that demonstrates that eight minutes, or anything approaching it, is the average time spent by the patient with the physician during an appointment at typical primary care practices.
Instead, there is fully documented and broadly accepted survey work from the professionals engaged by the respected Centers for Disease Control that shows that the average primary care visit around the period covered in NCSU work was 23.5 minutes. This measurement is essentially identical to that attributed in the AAFP’s Family Practice Management issue reporting on AAFP’s Family Practice Profile for 2015. That measurement would suggest that appointments at the Apex clinic are a bit under 50% longer than typical primary care visits. That’s still a feather in the Apex practice’s cap; it is also, as we will see, a fairly plausible outcome for an insurance-free practice.
What is not plausible is that any direct primary care clinic, even the one in Apex, actually delivers a four-fold increase in patient visit duration over traditional practices.
DPC advocates place their ability to deliver longer patient visits on their ability to reduce overhead. But how much overhead is there, and how much can it be reduced?
A 2014 quantitatively detailed, peer-reviewed academic study of “Billing and insurance-related administrative costs in United States health care” concluded that billing and insurance-related costs in physician practices amounted to thirteen percent (13%) of gross revenues. This works out to be about 22% of the estimated 60% overhead expenses (see here and here) for family practice physicians.
So, while a traditional practice would divide $100 of revenue into $60 of overhead and $40 for the practitioner, eliminating all billing and insurance would increase the funds retained by the practitioner from $40 to $53. That would allow an average physician to boost appointment duration by about one-third (1/3).
That boost would bring average patient visit duration above 31 minutes, a number that might reasonably taken as confirming the 35 minute visit duration determined by the NCSU students for the no-insurance clinic in Apex.
Still, pro-DPC activists regularly assign a much higher percentage of overhead to billing and insurance costs; at least one advocate suggests that as much as two-thirds (2/3) of overhead goes to billing and insurance. Let’s look at some possibilities that I’ve developed with the aid of a spreadsheet.
Assuming that half the overhead of a practice can be eliminated, then the amount of funds left for the practitioner would increase from 40 cents to 70 cents on the dollar. Doing so would let the practitioner spend 75% more time with her patients without a loss in revenue. And, while that might be a considerable achievement, it comes nowhere close to quadrupling visit lengths.
Even were it possible to eliminate all overhead, the effort would not generate visits that were four-fold longer. A practitioner who gets to keep 100 cents on the dollar instead of 40 cents can still only spend two and one-half times as long with her patients.
To spend four times as long with his patients, an average practitioner would have to reduce overhead by 200%. A physician would have to “keep” 160 cents on the dollar to get that result. Instead of the physician paying $32,000 per year for an assistant, the assistant pays $32,000 per year to the physician!
A physician could, one supposes, reach 160 cents on the dollar by increasing patient charges. So keep in mind that Ms. Restrepo asserts that the Apex practice manages, not only to quadruple normal visit times but, to lower patient prices by 85%.