Pay-Per-Care in Dermatology: Exploring Why and How Dermatologists Are Flipping the Script on Insurance Payments

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Insurance coverage policies for dermatologic disorders are complex and highly variable, with many exclusions, depending on the plan.
Insurance coverage policies for dermatologic disorders are complex and highly variable, with many exclusions, depending on the plan.

Dermatologists practice in an unusual space that often hovers on the periphery of traditional insurance-based medical care. No other medical practice today is as broad or misunderstood; the range of care extends from purely cosmetic to life-saving treatment of the most common cancers in the United States1 — as well as skin manifestations of a number of rheumatologic and immunologic disorders including lupus and arthritis.

Insurance coverage policies for dermatologic disorders are complex and highly variable, with many exclusions depending on the plan. The main guideline for whether insurance will pay for a procedure, treatment, or even a diagnostic test is generally the rule of medical necessity.

In the field of dermatology, many issues fall into a gray area that excludes coverage, despite indications of pain, psychosocial distress, and even depression. Coverage limitations and high deductibles leave many patients having to pay out-of-pocket for dermatologic care; as a result, providers are exploring new models for delivering care that patients are willing to pay for.

Models of Dermatology Care

There are 3 main provider models: traditional insurance-only, direct-pay, and concierge medicine. Examination of recent trends suggests that providers are increasingly turning to the latter 2 models. Belanger, et al2 reported on a survey that showed an increase in concierge dermatology practice from 1% to 3% in 2016 alone, while the Physician's Foundation found that 6.9% of medical specialists (including largely dermatologists) planned to shift from insurance-based medicine to either direct-pay or concierge models within 1 to 3 years.

Dermatology Advisor asked 3 practitioners from different regions of the United States how and why they chose their particular practice models.

Concierge Dermatology

Nikki Hill, MD
Skin of Culture and Hair (SOCAH) Center
Tucker, Georgia

At the SOCAH Center, dermatologist Nikki Hill, MD, practices concierge, subscription-based medicine. She offers 2 levels of monthly memberships for direct access to her services, with a minimum commitment of 3 months. Her practice does not bill insurance companies for services.

“I've worked in offices that were well-oiled machines, seeing 50-plus patients a day,” Dr Hill told Dermatology Advisor. “I felt anxious about missing things. In 5 minutes, I would complete my skin cancer screening, perform a biopsy if needed, and have to rely on the scribing skills of the medical assistants to capture everything before I was able to sit down and sign notes 10 to 12 hours later. I couldn't get a detailed history for a lot of chronic conditions. If I spent time getting to know a patient, it was at the expense of the next patient's appointment being on time. And I absolutely do not like keeping patients waiting! After reading and reviewing peer articles about the dynamics of insurance in dermatology, I decided to open my practice as a private-pay practice. I started it as a micropractice; I chose to have a lower patient load and longer appointment times, 1 to 2 staff, and low overhead. It was a slow build but has given me so much more freedom.” 

Dr Hill explained that her practice is tailored to optional procedures that fill gaps. “People with high deductibles or no insurance or with the desire to have personalized care that is not hampered by a third-party payer, are some of the people that my model serves best. People who wish to see a specialist physician — and have time with them — are probably going to need to pay directly in the future.”

Direct-Pay Dermatology

Jean Holland, MD
Jean Holland Dermatology
Riverview, Michigan

Jean Holland, MD, has a private practice that focuses on medical dermatology that uses a direct-pay model, with a price schedule according to the amount of time spent on the visit. Short visits under 5 minutes are $50; 5 to 10 minutes, $80; and 10 to 15 minutes, $110. She treats a range of skin problems, including diagnosis and treatment of early cancers. She does not offer cosmetic procedures such as Botox or facial fillers. “Patients with primarily cosmetic concerns are urged to seek care elsewhere; it just isn't an area of interest [for me],” she said.

She chose a simplified billing model so she could concentrate on patient care. “While many patients in my area — I estimate about half — have quite generous insurance plans, more and more have plans that involve co-pays in excess of $75 and deductibles of $5000 to $10,000,” she told Dermatology Advisor. “There are still significant numbers [of patients] who do not have medical insurance at all. Working, middle-class families can't afford the charges they incur at practices that participate in insurance plans, so they don't come in. These are the people for whom I created this model. I chose to charge on the basis of face-to-face time with the physician. This sets expectations both for cost and length of appointment. A nice side benefit is that we run on time. The on-time performance has been so well-received that even many patients with generous insurance benefits choose to come here and pay out of pocket.”


Kathleen Brown, MD
Oregon Coast Dermatology
Coos Bay, Oregon

Kathleen Brown, MD, has a medical and surgical dermatology practice in southern Oregon, where she performs a full range of dermatology evaluations and treatments and also offers cosmetic and aesthetic services. Her practice offers direct-pay plans for services by time and according to 3 levels according disorder type, with additional fees for pathology and specific procedures.

“My model actually IS the traditional model, in that I work directly for patients,” Dr  Brown said. “A lot of doctors do not like calling patients customers, but when they pay directly, they are customers. That does not mean that I need to do what they tell me to; it means that I need to provide value that they are willing to pay for, and they need to be treated with respect. Respect and trust go both ways; they can choose to go elsewhere. My model excludes third-party payers from any control or influence in my office. That means that I am uncompromised in doing what the patient and I decide is best.”

In part 2 of this series, Dermatology Advisor will further explore issues of access to care, from booking appointments and management of chronic skin disorders, to detection and treatment of skin cancers.

References

  1. Centers for Disease Control and Prevention. www.cdc.gov/cancer/skin/statistics/index.htm. Accessed 5/24/18.
  2. Belanger M, Grant-Kels JM. To fee or not to fee? The ethical issues of concierge medicine. Ann Int Med. 2017;163:631-633.
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