 Welcome to Free Thoughts from Libertarianism.org and the Cato Institute. I'm Trevor Burrus. And I'm Aaron Powell. Joining us today is Dr. Ryan Newhoffel, a physician in Lawrence, Kansas. A few weeks ago, a few episodes ago, on an episode we did about the statrics, I discussed Dr. New as he goes, as his patients call him, Dr. New's practice, which is sometimes called concierge medicine and sometimes called direct primary care medicine. And I brought it up as a really good example of something that defeats the statrics and then Dr. Newhoffel actually contacted me, which is how this episode got started. So welcome to Free Thoughts, by the way, Dr. New. Thank you for having me. And I guess we just start there. In the episode, I directed our listeners to newcare.net, which is the website of your practice. But if they go there, they immediately see that it's very different. It has prices and a bunch of things that you never see in American medicine. So what is the model of this direct primary care you're running and how does it generally work? Yeah, well, yeah. Thanks for having me. So direct primary care has been around for quite a while and simply put, it's a direct relationship financially with a primary care physician. So the way that most practices are structured is kind of like joining a gym or subscribing to Netflix. People pay as a monthly fee, a membership fee is what most people call it. And for that monthly fee, we provide full transparency in most primary care services. And we're able to do things a lot better for people, save them money in many circumstances. But it's really, it's kind of stripping away all of the red tape and middlemen that normal healthcare has in America. What's then the benefit for you? Because obviously this isn't the model of most physicians. And so why aren't more of them doing this sort of thing? Well, that's a big complicated question of why more people aren't doing it. I mean, to me, the benefits are self-evident. But the doctors who are doing this, the big difference is when you're running a medical practice, it is a business at some level. And so the red tape, the paperwork, the administrative load, the business of medicine is very, very complex. And so when you're running a small business, the simpler your business model is, the more you can focus on your mission, the services you provide. And unfortunately in American healthcare, the system has gotten so complicated that it distracts you from what you're really trying to do, which is care for people and provide them that service, your professional service. So that's really the big benefit is you can kind of start with a blank slate and structure things to your patient's needs. And I don't have to worry as much about the paperwork side of thing. There's many studies on this. And the awareness of the administrative load is very well known and very well studied in medicine. But people don't quite know how they're supposed to escape that. So everyone, regardless of their politics, says, yes, there's too much paperwork. There's too many hoops to jump through. But what can we possibly do about that? So we've kind of created this monster and people just don't know how to get away from it and direct primary care is an attempt to do that. And what do you have to do in order to set up this practice? Or you have to reject certain things that the government offers in order to set this up. So what do you have to do? Well, if you think about the normal healthcare system, people actually, it's very difficult to actually talk about healthcare to most lay people because they immediately start associating everything with health insurance. And they don't even often make a distinction between the two. And you can hear this, even in people who are fairly well versed in health care and health policy, they use the terms interchangeably. And so the entire structure of our health care system is based upon a third party fee for service payment, meaning that some third party has collected the money, either an insurance company or the government. And then they dole that out in the way that they see best fit a fee for every service that I provide. And so that that transaction between the doctor and whoever's paying, which is 90 percent of the time, not the patient paying or 90 percent of that tab is not paid by the patient, that dictates everything. You know, the way that you get paid, you know, it requires certain documentation. It requires a certain certain things that the doctor does in order to get paid. And oftentimes that doesn't it doesn't really align with the the service you're even trying to provide. So it really limits you in what you can do. But most people they think about their health care and health insurance as this one kind of messy thing, but they don't make a distinction between me and a health insurance company at some level. And so you don't take Medicare or Medicaid? I don't I don't take any insurance at all. And really that system, that fee for service system is is implemented in private health care and government health care. So it's not unique just to Medicare and Medicaid. I would say dealing with, you know, Blue Cross or Atenor, take the pick of your private insurance company is very similar. I mean, there are some distinctions. But this is not unique to just government payers. This is true of all third party payers. And really, it's not even health insurance at this point. At that point, it is a prepaid managed care system. You know, we call that an HMO or a PPO. And so really it's not insurance as we would think of in any other industry. If you have house insurance, you know, you don't use your house insurance to clean your carpets or fix a broken window or repaint your front door. You use it in case your house burns down to the ground and car insurance. You can make a lot of other analogies, but we really don't have insurance at all. We have a prepaid managed care system in health care at least for the past 40 to 50 years in America. In the episode of Free Thoughts where Trevor first introduced your practice, the argument that he was making or broadly was that we get these laws and these regulations, and in this case, the system that created our modern health insurance or managed care regime. And then it becomes really difficult to kind of think outside of that box. We think of that as the way the world is. And so I find myself as you're describing this kind of still thinking within that box in that so that if I'm a patient, your service provides primary care, but if I get into serious trouble, I'm going to have to go to a hospital or specialists or something that's going to be really expensive and something that I'm going to want insurance for. And so I'm going to want insurance even if I'm using it. Absolutely. And then so then why would I then go to you if I'm already have this insurance that would also be covering the kinds of things that you provide? Well, the system that covers A to Z already exists. It's called an HMO or PPO and is what has led to what we have now. So no, and that's one of the big misnomers that direct primary care I'm not anti insurance. I am for using insurance in a smart way to make an analogy. And I know that cars and people are different. I think my job is special and what I do is unique. But if you tried to use your car insurance to do everything related to your car, if you used it for tire rotations, oil changes, you would have to get a prior approval before you left town and they would tell you which gas station you go to. And so that wouldn't make any sense. No one, everyone would reject that idea. Now, if you have an accident and you wreck your car and you have to pay ten thousand dollars to fix it or replace it, insurance then kind of makes sense. That trade off of payment for that makes sense. But much in the same way of health care, what I do as a primary care physician can accomplish what most people need on most years, I would say 80 to 90 percent of people, 80, 90 percent of the years of their life. They don't need anything more than what a good, high practicing primary care physician can provide them. There's always going to be circumstances where things get, you know, very, very expensive and those unexpected, expensive things. Of course, you need a financial tool in place to cover those. But why we are trying to cover or pay for primary care services and the very rare chance of getting run over by a bus in the same mechanism and same manner really doesn't make sense. So yes, it's all health care, but the way that, you know, neurosurgery or cancer treatment works is so radically different than what I do as a family physician. I don't think there needs to be an overarching way that we do all of it in the same way. So one of the things that are my colleagues here at the Kato Institute doing health care have pushed for for a long time is health saving accounts. And among the things that you opt out of with your models, you opt out of insurance. But can you take, could I pay for your services with my HSA? Well, right now, that's actually a pretty hotly debated topic in the direct primary care world. So the way that the IRS views this and is structured HSAs has made it very complicated and the short answer is no, but I won't bore people with all the IRS statements on this. So I think the system that we all envision is that people have great access to primary care because everyone, regardless of their politics, you know, wants to figure out how do we provide people better primary care? If we can do that, we can keep people away from the expensive care most of the time. And so, you know, returning more, you know, control of the moneys back to people through an HSA is a good idea. But unfortunately, the way that HSAs were structured was still kind of insurance centered. In fact, I have an HSA and because I changed my insurance policy, I don't I can't contribute to any more. So HSAs are kind of a step in the right direction. But they're there's still a lot of they were still formulated around the idea that insurance is going to be managing all of your care at all levels from A to Z. I'm looking at newcare.net right now. And and every time I look at this, my mind still gets gets blown. You have, OK, so membership, if you're looking at this as individuals, you pay if you're 18 under, you pay $3 a month. Adults 19 to 69 pay $50 a month. And you get communications, phone, text and emails with doctor or nurse, which is mind blowing right now. I'm already pretty surprised clinic visits when required, yearly wellness and prevention planning, some routine labs and tests, medical equipment, least such as crutches, yearly flu shot and access to discounted wholesale pricing on other services. So and this is insane. And you go back to the the you have high tech after hours, you do after you do house calls, which is like 1920s kind of town Thornton Wilder stuff, I think same day. You can get here. You can see people on the same day. You have extended visits and you have upfront prices. Now, why doesn't this stuff exist for people who aren't doing direct primary care? Why is this so sci-fi and why can you do it? Well, I think, you know, you can kind of get into the chicken or the egg argument. But I think the way that we have structured payment and the fee for service, third party, very complicated system, you know, it's not that doctors don't care. It's not that doctors don't want to serve their patients. Almost every physician I've ever met is very caring and very committed to providing great care. But the payment, the business of medicine does not lead to those types of things. So it's what's really interesting. And I'm not trying to diminish, you know, how cool I am. But a lot of our patients don't even quite understand this. They think maybe that I'm I'm able to do the text message and email and see them Sunday, just because I'm really nice and I am pretty nice and sometimes cool, but that's not why I can do what I do. You know, doctors get paid per office visit and the normal system. And so if that's the only way a doctor can get paid, basically, the only way they can change, you know, the revenue equation is to bring more people in per day. That's the only way they get paid. They can do more stuff to people, but they don't get paid to set around and talk on the phone or email or text messages with patients. I do. I I structured my business so that I can meet people where they are when they need to be seen. But even further, I have such a lean business model that if you look at the average practice in order to run a practice, you know, per physician or per provider, you're looking at a minimum of four to eight staff just for kind of the administrative side of medicine. So the majority of overhead costs for a small medical practice or a hospital either is actually not clinical stuff. It's people who are coders and builders and people who are waiting on a hold. And it's all this kind of very messy business stuff. And most people are not who are employed in health care, not clinical. They're not actually talking to patients, taking care of them. Patients don't see all this stuff. This is stuff that happens in an office or a back room somewhere. And because I can I can work directly for my patients and not have to hassle with that stuff, my entire clinic has run with me in a nurse. I have no one else. So my overhead is very, very low. It's very high tech and very lean. And I do it because I structure the payment so I can do those services. It's not because I'm nice or cool. But in the normal system, it makes total sense. I mean, we are getting exactly what we pay for. So your patients then I mean, there are people and we talked before and you didn't like the term concierge medicine. But but your patients, you're in Lawrence, Kansas, which is a nice college town. They're pretty rich, I assume. And this probably doesn't work if for poorer patients. Yeah, another huge misconception. Thanks for the setup. Oh, really, I'm shocked. Keep going. So, yeah, I think that's the big misperception that, you know, the majority of people who are struggling to afford health care are not, you know, they're not all poor. And so the patients that we serve, in fact, are probably a lower, you know, socioeconomic demographic than than what even the average practice is. 50% of my patients are uninsured. You know, the majority of them have high deductible. So they're paying boatloads of money inflated, mind you, costs out of pocket for for what they need. So we're really trying to serve both of those. We're not just trying to to say, like, well, you know, the country club, if you pay me a thousand dollars, I'll take better care of you. And I don't have any qualms with that. I wouldn't, I don't begrudging when we're doing that, but what we're trying to solve is a much bigger problem. We want to provide better quality care. And we also want to make it more affordable and more transparent. So almost every direct primary care physician I know is serving that demographic. We're serving regular middle class people. Now, not everyone knows about us. Not everyone understands what we do, but we're not serving. And the reason that I'm reluctant and I never use the term concierge is because a lot of concierge probably a majority of people who call themselves concierge, they are charging a membership fee or retainer fee, but that's on top of the normal messy insurance billing system. So there's a huge company called MD VIP. They consider themselves concierge. I mean, it's VIP. It's in their name. And they basically are charging people, you know, about sixteen hundred dollars a year on top of the normal insurance coding and billing systems. When people go in, they're still paying for office visits. They're not doing the ancillary discounts and services that we are. And so I think we've been very kind of typecast because concierge medicine has been around for a long time. It will always exist. There's always going to be people catering to the country club. But I think direct primary care is trying to solve a much bigger problem than just, you know, people who are wanting special treatment. How scalable is this model? So it works for primary care, but could it be used to replace our current system for things like specialists or hospitals or the bigger, more scary stuff? Well, you know, I mean, primary care is unique. There's no doubt about that. The ongoing relationship that people have with their primary doctor, you know, I might be overly romantic about this, but I think it is a unique relationship. And so the way that other services should be structured, I don't think that, you know, you can take all the same principles that we have applied as primary care doctors who have this kind of longitudinal ongoing relationship with people and apply that to something like someone needing an orthopedic surgery. However, there are specialists who are catering to more transparent pricing models. I think the Cato Institute has highlighted the surgery center of Oklahoma, Dr. Keith Smith. So he's shown that you can absolutely strip away some of the fat and medicine and boil down the payment system to make it simpler. But of course those things, there's always going to be a time and place if you get admitted to the hospital, if you have surgery, those things are kind of inherently expensive. But I do think that what we're seeing in the market is because direct primary care is growing so much that there are services that are starting to cater to us. An example of that would be, there's a company called Rubicon MD, which is basically an e-consultant platform. Think of it kind of like doctors, primary care doctors and specialists having like a secure place like Facebook where we can chat about our patients. And so I can use a platform like this, share a case of one of my patients with this consultant service and I get responses within hours typically of the specialist. So I can share a picture of a rash or lab values or an x-ray and instead of sending people through the normal, you know, you got to pay your co-pay and wait two weeks to see the specialist, I can get responses within the same day. And that's also mind blowing when I describe that to people that I can meet online with a specialist and that won't work for everything. They can't do surgery over the internet. But the intellectual side of that specialty care could be handled most of the time with a remote efficient and I don't charge my patients for that service at all. So they basically get free online consultants unlimited as much as they need. And so that's how much like a radical shift in thinking can occur if you kind of strip away the managed care aspect of these things. My head is spinning. I thought I even understood a little bit to get out of the statrix mindset about how much you can do. We all live there. Yeah, you have a great term you used when we talked before, battered a patient syndrome. Yeah, describe what that means when people come to you and experience your care. What I have experienced doing this for almost five years is that it's really hard for people to even imagine something different. And so I have, I've had many experiences where I've spelled out what we do to a patient. You know, they have their own medical history and they've kind of, you know, thought we were cool, they've heard friends say we were cool. But they want to know, you know, on paper, how can you save me money? I want to see it. And so we spell that out for them. We're like, you're gonna be paying us $50 a month if you average three or four visits a year. You get these labs done. We have these discounts on these meds. And we've demonstrated to them in black and white, you can save money with us. And then they say, at what point are you trying to sell me time shares in Mexico or Amway products? Absolutely. And they think there's some type of catch, you know, that either I'm giving, I'm importing drugs illegally from Guatemala or that I'm somehow like a huckster, and it's really hard for them to even get over that, that it's possible to do what I do for the price that I do it. Because they have seen, you know, I've had patients, good example, you know, patients who've had an MRI previously and need another one. And they'd paid $2,000 at the hospital. And they said, you know, doc, I think I need an MRI on the other knee, but I really don't want to pay for it. And I said, well, you know, the good news is I know a place that's, you know, not too far away from here, it's, you know, they give you an upfront cash price for MRI, $450, you know, so we can get it done and you don't have to pay $2,000. And they're like, well, I, you know, I, I don't know, I want a good MRI, you know, like somehow it was like some type of generic, like terrible. And I'm like, no, it's actually a big radiology center that's owned by radiologists. It's probably a better machine than the hospitals, but they just, how's that, you know, they're confused about how that's possible. How can one place charge, you know, $2,500? And you're telling me, if I just paid cash, like it's been $400 and it's just as good, they just, they think there's some kind of trick. And so I think that kind of over decades of having this managed care and lack of transparency that people, it's hard for them to fathom that we could do what we do. And they think there's some kind of trick to it. Why are the prices, so the insurance companies are at least to some extent competing with each other. And they, you know, they tell you how much your premiums are gonna be. And we'd all like to be paying less. And so if an MRI can cost 450 bucks, why is the insurance company charging 2,500? Why isn't someone else, some other insurance company saying, hey, you know, we're gonna provide the same managed care, but are the amounts we're gonna pay to the radiologists and elsewhere is gonna be so much lower that you're gonna pay a much lower premium? Well, I think the equation starts, the formulation of this starts at the provider level because the insurance is just a payment, or managed care is a payment mechanism. It's not where kind of the cost of everything starts. So if you look at where everything starts, if you take lab work, office visits, MRIs, whatever you're discussing, if the person providing that has to have all of this overhead expense. So labs are a great example. So we subcontract or client bill labs, and when we contract out the rate for our labs, we're paying them a simple invoice, monthly invoice. There's no coding, there's no alphabet soup for them to justify getting paid by an insurance company. So that for everyone who deals with insurance, that's very, very complicated. And that comes at a cost. It's usually a direct cost and employing someone to do that. But if you can have a simple cash transaction, it changes everything. We, when we client bill our lab work or x-rays, we're getting them at less than half or sometimes 80% less, even when that what Medicare would pay. And people consider Medicare a low payer, but that's because the people that are providing that service, the lab company or the place that takes my x-rays, they're like, I just, you just, it's a simple cash payment. Well, yeah, we could do that for 25 bucks then. But if we have to deal with, you know, all of the hassles and hoops of billing insurance, because if you went and used your MRI, you know, your insurance to pay for that MRI, well, the hospital and I am still dealing with that paperwork and all of that administrative aspect of things. But if they just got an upfront simple transaction, it lowers, you know, the costs all around. So that even other providers are recognizing, but even that is not that simple because I have specialists and other companies who are like uncomfortable accepting cash for payment. And that's kind of where the state tricks comes in and some people can't even realize that, you know, oh, this would actually be much easier for me and I would still make as much money. But because they just want to, they don't want to see the cash on the front end. They just want it to hide in the back end and that makes them feel good about it. I said that may be part of it. Yeah, there's definitely some kind of. There's an artist cash being transacted in the insurance system. Well, yeah. You want to go in and walk out with just your copay or whatever and you feel good about yourself. Well, it's funny because a lot of the critics of direct primary care, they'll kind of in a disparagingly way. They'll say we're cash based or we only work for cash. And my immediate response is, is Blue Cross paying you in potatoes? I mean, they're paying you in cash. Now, there's no, I don't see any altruism in a third party paying me versus, you know, a big company paying me versus my patient directly. But yeah, I mean, so there's a lot of kind of like subtle things saying something is cash based when, you know, I know that there's other physicians in my community who charge $400 or $500 for an ingrown toenail removal. My patients get, you know, charge get $10 because of the procedure equipment that I use. So yes, I'm cash based. It was $10 for them to get their ingrown toenail removed and it's $450 in another place in town. So yeah, I mean, I guess we're both cash based. So this sounds like someone could be thinking that you're in the profit mode of game here and that there's something unseemly about this. That's sort of essentially the, one of the big critiques of any sort of market based medicine is like medicine for profit is inherently immoral. Now, of course, you have your two person operation and you have a family and you want to take home something at the end of the day. And this has something to do with how you negotiate prices, for example, because you negotiate prices on these MRIs and you're testing and you use your patient pool to negotiate this. But you also have a personal incentive to, to make it, you know, is cheap for them and also so you don't have to pay as much either so you can actually walk on it. And that seems to be ultimately a good thing for the patients. I mean, I think it's a win, win all around. Of course, yes. So yes, this is my business. This is my livelihood. I absolutely could not do this if I didn't make an income. And I even have, you know, patients kind of think that I'm some type of saint, which I'm happy that they want to label me as that. But no, I mean, this is my livelihood. And so, you know, my expectation was to make at least an average income for a family physician. If I somehow make more than that down the line, that's awesome. But yeah, I mean, this is not, I'm not doing this out of a purely altruistic thing. I mean, if I wanted to do that, I would go volunteer and I do do that. But yeah, this is my livelihood. I'm just, I'm trying to, you know, be an advocate for my patients by providing them that transparency and services. But yes, at the end of the day, you know, I have to make money or I can't do this. Now you talk about, a lot of discussion is discussed on the turning people away, turning chronic conditions. And that's a big part of whenever, every time we reform health care, as we did with Obamacare, that we turn diabetics or people like this away. How does your model deal with chronic conditions? And are you faced with the situation of turning people away? And I'm just gonna say and letting them die on the streets because that's what, again, that's the classic critique. Well, I think I care for them much better. And so, you know, the funny thing is, is because of the flexibility of what we do, I'm able to meet people's needs of all levels. I have patients who are extremely sick on hospice. I have patients who are extremely complicated with chronic diseases. And I think they need this type of care more than anything else, more than anyone else. If someone's healthy and they never see the doctor, then I guess no medical care's really that helpful for them. But yeah, I think the need of those type of patients, this is more important to them than anyone else. And so whenever we have people enroll with us, our pricing is based upon age to a small degree. I mean, all adults 19 to 69 pay the same and seniors pay a little more and kids pay a little bit less. But we don't have any type of screening process in terms of their medical conditions. In fact, most of our patients do have chronic diseases because they see a much better value because I'm providing them with lab work and they tend to require more visits. So they're getting a much better bang for their buck than a person who never goes to the doctor. So yeah, I think that I don't have to worry about that at my level because primary care, everyone needs primary care, whether they're in horribly controlled diabetic or they're a healthy 22 year old. They need different things at different times but I don't necessarily have to factor that in. I have to factor in, can I have enough patients who are paying a fee to make my revenue high enough that I can take home a decent pay? But I have no requirement or no litmus test or anything like that about people's preexisting medical conditions. Now that's different when you start talking about insurance and they have a risk adjustment. But the riskiest thing is is I have to see people a little bit more. But I'm not on the hook for, if they end up with a heart attack or dialysis because I'm not an insurance. So that doesn't even enter our equation at all. So now you told me a story about a patient who came in to see you who was at a, I think it was the direct primary care summit who discussed, who seems like one of these patients that the American healthcare system or has been consistently reformed to try and save. And but still they're constantly there. They slip through the cracks. They slip through the safety net. They have many different preexisting conditions. Can you tell that story to our listeners? Yeah, so last year at the direct primary care summit, which is a big group meeting for the doctors who are practicing this model or planning on it. I had one of my patients actually get up on stage and tell his story. And I think that people's stories are so much more powerful about the bad aspects of our system than anything I could ever say. I could talk here for hours and I'm a doctor and I'm in it for myself and all of that. But whenever you set down and you listen to people's stories about how the system has failed them, it really changes your thinking about it. So despite everyone's best intentions, and I think most people who are in healthcare, even probably most of the people on the policy world, they think what they're doing is helping people. But as a doctor in the trenches, I see so many people, whether they have insurance or not, who fall through the cracks, who get bad care, who avoid care. And so I took one of my patients who had had a really bad stroke, was hospitalized for a week, had really never gotten much medical care prior to that because the hard-working guy didn't, he had had insurance a little bit here and there, but he'd never really probably taken care of himself like he should and ended up having a stroke and got discharged from the hospital with a boatload of medications. And he hadn't sure, he had a social worker in the hospital and he ran through the hospital system, like I'm sure most people think should be done, but they sent him out into the wild with no actual plan to take care of these problems. And so they ended up referring him to kind of a safety net clinic, which is supposed to take care of poor uninsured people. And I know this clinic, they're very well-meaning, very well-intentioned. And because of some paperwork snafus, this guy, because he's self-employed, it looked like he made a little more than he really did. So they referred him to me. He was very upset about his whole experience. He wanted to get back to work and really was determined to do that, but it felt very turned off and felt like they were kind of just trying to push him onto disability or something like that, according to him. But they sent him home with a bunch of prescriptions that cost hundreds or thousands of dollars when he went to the pharmacy and he said, I have no way to pay for any of that stuff. So I'm glad they gave me these to him, but they didn't really give me a plan and I have no way to afford this. So through a relationship that took over a year, we worked very hard to kind of get control of his diabetes and his high blood pressure and all of these problems. We were able to lower the cost for him tremendously because we were aware of it. And so he's back working full time and he's the type of guy that I think a lot of times gets kind of written off that we call them a train wreck and they have a terrible thing happen and they're very difficult from a medical standpoint to kind of get on the right track. And I think in the normal system, I've seen so many people like him fail because there wasn't someone there to be his advocate. And again, it's not that we don't have resources. They gave him lots of paperwork and tried to direct him in the right place, but there really was no one there. So what I've kind of developed in my community is in some respects, I've become often a safety net for the safety net clinics. If someone doesn't have the right paperwork, if they're not a citizen, if they don't live in the right county, if they make a little bit too much, they're kind of like, well, you either have insurance or you're qualified for this or you're SOL. And so I think that's a huge need that we're serving here for a lot of people. It seems that that relationship too, the ability to court a relationship with your patient without the administrative bloat infecting everything about what you're doing in terms of the kind of attention and care and discussion that you have in the doctor-patient relationship. It seems that the system we have now, the system created by and run by government is parasitic on creating good relationships between doctors and patients. And maybe that's one of the appeals that doctors see in the direct primary care model. Oh, 100%, 100%. The least valued thing in our current healthcare system is time. You don't get paid to spend time with people. In the normal insurance-based world, if I did a knee injection for someone with arthritis, injected a steroid in their knee, Medicare, private insurance company would probably reimburse me $100 to $200 as an orthopedic surgeon, $300 or $400 for some odd reason. But if I spent 30 minutes talking to someone about their diabetes, which would never happen because we don't have the luxury of doing that, I probably would get paid about $70 or $60. A knee injection takes me, by the way, about one minute. And so you're really setting up a system where you're incentivized to do things to people. We're really good in America at doing procedures and testing and all that stuff, but we're really not good at doing stuff for people. And sometimes that's time. It's not easy to wrap your hands around that from a scientific standpoint. But the average physician visit in America is for an established patient is less than 10 minutes. And if someone comes in with a sore throat, yeah, I can handle that in 10 minutes. But a lot of patients are very complicated. And even if they come in for a sore throat, they have all these other chronic conditions and they have all these social factors. And so for a physician to sit down with someone for eight or 10 minutes, you can't not accomplish very much. I don't care how smart you are. And I think patients sense that, that they walk away dissatisfied and doctors do the same. And I always tell people that I would rather be an average doctor with adequate time than the smartest doctor in the world with not enough time. Because you just can't, there's no substitute for that. And unfortunately, the way that the payment model is structured, I could have never done what I did with Blaine, my patient. I spent 30 to 45 minutes, I think probably an hour on the first visit. And I did that every few weeks until we got his stuff under control. And that's just, that's impossible in the normal system. You could never do, I mean, you would never stay in business, I say, and you could do it. You would go out of business very quickly. But yeah, I mean, it really does just change that equation and puts the value back on time. And I think that's something that's sorely, sorely missing. How much do you think that the, that administrative gloat that separates the doctors from the patients is contributing to this sort of well-publicized exodus of doctors from the business either to either A, not go into the first place, or B, get out of it, or get out of family care and get into specialization. But this is often discussed and it seems like there must be a contributing factor. Oh yeah, no doubt about it. And I think, there's multiple factors at play here for the burnout issue. And even if you look at, sadly, if you look at suicide rates among physicians, they have skyrocketed over the past decade or two. And I think that's a huge part of it. Becoming a doctor is really, really hard. You make a ton of sacrifices to get to where you become able to care for people. And then people are kind of smacked in the face with reality of feeling like they're a clerk. And I think that's demoralizing. I talk to physicians all the time who are extremely burned out, even a lot of my classmates and people I went to residency with, they've changed jobs two or three times. And I've only been out of residency for five, six years now. And so yeah, I think that there's a lot of dissatisfaction, people taking non-clinical jobs. But yeah, I think that the big reason that most people go in to medicine is because they truly wanna help people. There's a personal aspect of that. Of course, there's an accomplishment and achievement and all of that. But I think it's that personal connection that really kind of allows you to withstand all of the pressures and stressors of medicine. And without that, you're just a really, a stressed out clerk and physicians don't wanna be that at all. So yeah, I think it's a huge part of it. One of the common themes that we talk about quite a lot on free thoughts is the way that entrenched interests can interfere, can use politics to interfere with new and innovative models. And so is that something that the direct primary care experience is like, what's the political environment for this now and into the future? Are there people working against it because it would hurt their models? What do politicians think of it? Well, to this stage, or at least until very recently, I would say direct primary care has been the most bipartisan healthcare topic around. I mean, the awareness of it is relatively small but growing quickly. And so most of the states who have passed direct primary care legislation, which is kind of a formality. It doesn't actually directly benefit us or grow us, but basically protects us from some types of regulations has been very bipartisan. So in most states where this has kind of become a discussion at the legislature for that state, it hasn't been partisan at all. There's been a few things recently in the state of Virginia. Terry McAuliffe voted down a direct primary care bill. Yeah, apparently there's a lot of internal politics in Virginia that I don't understand, but it's more of a political move than anything else. But the good thing is that at this stage, at the federal level in most states, direct primary care has kind of been an acceptable idea. In fact, a direct primary care to many people's shock is included in the Affordable Care Act. So even at the time, there was a handful of us, I believe, around when that bill was written, but it is included in the Affordable Care Act as kind of an option. Now there's a lot of kind of messy things around that and what it means and HHS really hasn't done much with it. But yeah, this is not like some type of political movement. And I'm really trying to be careful about trying to frame this. And I think other direct primary care doctors are, we don't want this to be a political issue because as soon as it gets framed like that, that this is a Republican idea or a Democrat idea, I think that people reflexively are gonna say they're against it without thinking through it critically. So I think that's pretty careful going forward that I certainly have my own personal ideology. I have lots of friends who are direct primary care physicians and they're politically all over the map. I mean, both ends of the spectrum. And so I think this could be a solution that could be politically feasible, but I think it's a precarious thing in America in any topic because people have to declare a team and whether it's good or bad on their side, but yeah. It's growing pretty quickly too, correct? Oh yeah, yeah. So when I started my practice in 2011, as I would define direct primary care, I mean, I would say there's less than a hundred, probably even the dozens of physicians in this model who are doing bread and butter, strict direct primary care. And now there's definitely in approaching a thousand, the communities surrounding this are just exploding. I can't even keep up with the new practices that are opening. So in some regions of the country, in some cities it's absolutely exploding and others it's a little harder for various reasons to get clinic started. So there's definitely some challenges in certain states. Certain states have restrictions against dispensing of medicines from a medical practice. And so every community, every state's a little bit unique, but it's all around the country, east to west coast, large towns, small towns. It's really serving a need in a lot of areas. And that's the beauty of it is it's flexible. I don't have to think about like whatever Washington, D.C. or Topeka, Kansas thinks about how I should serve my patients best. I can look at my patient population, my philosophy and my community and tailor my business to serve those needs. I'm not looking to them to fix the problem. And if it gets too big though, I don't know what too big is in this thing, but it seems that with the increasing sort of Obamacare dysfunction, the doctors being driven out of the profession due to various things, but a lot of it having to do with the administrative bloat and what happens because of that. So we have a lot of doctors who might go into direct primary care. If it gets too big, does it actually start to challenge the viability of insurance models or Medicare Medicaid in a way that maybe the insurers would try to fight against it? Well, we haven't seen that very much. In Virginia, that was part of the equation. Apparently the insurance lobby there was against this bill. And it's kind of a minor technicality issue honestly in Virginia. So there are some insurance companies who have kind of spoken negatively about this model, but at the same time, there's some direct primary care companies. There's one based out of Boston called Iora Health who's actually partnered with insurance companies. There's several different larger direct primary care groups who've grown large enough where they've started approaching third parties like that, managed care companies, even like Medicare Advantage plans and tried to figure out how they could work their model and stay true to that model, yet work with these kind of third party payers, insurance companies and governments. In fact, in the state of Washington, Q Lyons, I'm actually partnered with a Medicaid managed care company. I am, from my perspective, my personal business perspective, I'm a little bit skeptical of doing that at this stage just because I think there'll be too many strings attached. But there are certainly ways that people are trying to figure out how this all fits together. And I think we need to do that at some level. We need to figure out how direct primary care kind of fits into this giant, messy puzzle. But at the same time, I think that part of the problem has been in American medicine and the reason that primary care has kind of fallen out of grace and the reason that it's not as good as it should is because as physicians, I should focus on what I do and do it the best that I can. And so I'm not stupid enough to think that I can figure out how to best organize brain surgery and payment of brain surgery that I think family physicians, we need to be aware of these larger issues and how it will work in the system. But at the same time, that's so much larger and complicated that I think if we, as primary care physicians, focused on our own patients and our own practices first and then have everyone else kind of adapt to us, I think that's a much better way to think about it. But again, we're tiny and the rest of the system is huge. So yeah, I think that's going forward. That's what everyone's questioning is, okay, you guys have demonstrated you can do this cool thing. You can make it affordable. How do we pay for it? How do we make sure that everyone has access to that care? How does that work with insurance? And I certainly have my ideas. I think insurance could be used in a much smarter way. I think it would be less expensive. And I think the total amount that we spend would be less. And if you look in American healthcare, I mean, we spend I think over $10,000 per person if you add up all of the money spent on healthcare in America from employers, governments, and out of own people's pockets. I think it's over $10,000 per person last year and total healthcare expenditures. The problem is not that there's not enough money to go around. I mean, I charge $50 a month, that's $600 a year. Clearly there's enough money per person to go around. The problem is, isn't allocating that money and who controls that money because the pot's definitely large enough. We just spend it in really stupid ways. Well, you mentioned due to the agility of some of these local, it seems like the direct primary care model has a lot of versatility to it, as you said, based on being able to react to your community. In one of your blog posts about this, he wrote that the adaptability of direct practice doctors and clinics based on community needs, something that's missing in the micromanaged status quo, some of the DPC practices were helping large employers or unions in urban areas tackle escalating health costs while others based in rural towns were working with a large number of uninsured patients. The creativity of DPC physicians is truly awesome. That seems to be something that's lacking in the healthcare system in general, but that the DPC model helps bring back in the innovation that we need. Yeah, and it's funny, because whenever I talk to my colleagues who are in normal practices, they mostly just scratch their heads. From the inside, it's kind of hard to describe this. So whenever you go to a practice management meeting, which is where all of the doctors and the nurses and the clinic staff, never would get together and talk about it, about the clinic and the business, and they're almost- Remember everyone who works at an HMO you're saying? Well, no, I'm saying in a clinic. Oh, in a clinic, okay. Doctors practice. And so whenever we have a practice management meeting or a practice meeting, people get around and they talk about all of these kind of nuanced things about like scheduling and billing and maximizing reimbursements and making sure that we bill out in more 99 level four visits and kind of all of these things that really aren't medical care. They're kind of the administrative thing. Like we never, at least from my experience, when I was sitting around to practice management meetings, very rarely was the discussion about how do we serve our patients better? How do we make our care better? How do we become more accessible to patients? So those are the things like a normal business. If I was running an ice cream shop, I wouldn't sit around for hours talking about exactly how to bill out my ice cream cone. I would be talking about how do we make our ice cream better? How do we make the patients experience or the customers experience better? And so those are the things that I focus on. But I think in the normal system, we're not really trying to be creative in meeting those needs. We're just trying to, well, there's a checkbox that Medicare gave us a checkbox in order to get paid by Blue Cross. We have to check off A through Z. And that's the only focus is making sure that you get that paperwork done and put people through that system. They're not thinking creatively about how do we follow up better with a diabetic? How do we reach out to people and make sure they're taking good care of themselves? And so we're really, we don't have to worry about that kind of the billing payment system like they do. And I think it really is distracting because I think a lot of doctors, they want better care for their patients. They would like to have the freedom to do that, but they're basically just holding their breath waiting for Washington DC or whatever state capital you're in to kind of fix these things. And I'm not holding my breath for that to happen. Well, on that then, what are some of the ways that federal or state or local governments going forward might better enable direct primary care or make it more accessible to more people or just otherwise improve it? Yeah, I mean, so there are some technical things that could be done. In fact, there's something called the Primary Care Enhancement Act that has been introduced in Congress, which I presume will take about 25 years to pass. If you're lucky. If I'm lucky, yeah, with the right partners. So Direct Primary Care Enhancement Act clarifies a few different things. It does clarify the HSA issue, which is kind of a big bugaboo in this world. It's hard to describe to patients all the intricacies of that. So we would clarify that issue. The HSA funds can be paid for direct primary care membership fees, and it is an eligible medical expense according to the IRS. So that would be one kind of easy technical thing that I would help. But I think on a larger scale, what I would like to see personally, and I don't speak for all direct primary care positions, is returning some of that money in some form back to the individuals and families to control themselves. You can't do that with 100% of the money. I'm not suggesting we just take that $10,000 and give people a $10,000 check. But if you could give some of that money back to the individuals, and that could be funded in different ways, that may be some of your own money, just keeping it yourself, that may be employers, that may be governments, subsidizing people who need help. If you could return some of that money back to the individuals and let them control it with them and their doctors, you wouldn't need to do more than 10 or 20%. So that would be more than enough money for individuals to control and pay for something like what I do. And I would love to see that happen. I think it would at least kind of create a more kind of cash economy, even if it was subsidized for people who needed help, that it would allow physicians to meet those people's needs and without worrying about all the other messy stuff. But yeah, politically, I think that would be very, very hard to do because it's a big pot of money and everyone wants to wrap their arms around it. Even within this world of crazy regulations and overarching federal programs like Medicare and Medicaid and the inauguration of Obamacare, which is not making anything better, you guys have managed to carve out this little space where would it be accurate to say that this is a really good example of how a free market or a freer market in medicine can work and what it can do? Yeah, absolutely. And I don't often, you know, describe what I do as some type of free market solution. But if you really look at what we do, I mean, it's me and my patients and there's no other, you know, third party influences. So I think when you really boil it all down, that's exactly what we're doing. And it sounds like we need to read, then we might need to rethink health care in this country. Yeah. If we're gonna fix, we just might be thinking about it in the wrong way then. Yeah, absolutely. And I think that, you know, it's funny whenever I hear, you know, politicians, conservative or libertarian politicians, you know, say that they want and they espouse that they want a free market solution, they really don't spell out what that would look like. And I think that's a huge challenge to do that. But I don't think you can just tell Americans, well, we're just gonna, the free market's gonna fix it. I think we need to point to tangible things and stuff that we're doing. And direct primary care is probably the biggest part of that. That things could be different. We could have things organized differently. And the notion of a free market wouldn't be as scary. Because, you know, if I'm putting myself in patients shoes, when I hear, you know, free market, you know, you're gonna be paying cash, what they see is using cash in the normal system, right? So they see that the hospital build them $8,000 for the MRI and that their insurance company, you know, give them a discount for $2,000. And so people kind of presume that everything else would be the same. They're just gonna be on the hook for it out of their own pocket. And I think you have to think much more radically than that. I think it changes the entire equation. For me to suggest someone pays for their own diabetes labs, people are like, oh my God, that's so expensive. Like actually I include those labs in my prices for $50 a month. They're, you know, $6 to $8 a few times a year. But if I told someone, you know, oh, the free market's gonna fix that. What they envision is paying these absurdly inflated prices which were not created by the free market. And that basically they would just be on the hook for it. So yeah, I think it's absolutely true when you boil it down to its essence. But I think you have to give people concrete examples of what that would look like. Or otherwise people just believe that they're being fed to the wolves. Now, a few weeks ago you emailed me about how Gary Johnson, the libertarian party candidate who is doing pretty well in the polls about how he is not doing a very good job of communicating on healthcare and what can be done in healthcare. And maybe he could listen to this episode at some point and get through all the way to the end where we ask this question. We say if you had one thing to say, he should listen to all of them, of course. But if you had one thing to say to Gary Johnson and how he should be talking about healthcare, what would you say to him? I think you have to bring it down to the personal level and being able to tell a story about what healthcare would look like for a person in a free market system, I think is something that will be required. Regardless of people's politics, just telling them that this idea of a free market system is gonna make things better is not enough for most people. They're very afraid of healthcare and healthcare is something that is very important to people. So I think politicians, regardless of their ideology, if they wanna connect with people and convince people that there's a better way, they have to spell that out in real life examples of what that would look like for them and sort of just kind of speaking in theory. Cause most people aren't nerds and they're not listening to this podcast and they're not reading, you know, Frederick Hayek or other economists. Unfortunately, yeah, most people, more people need to listen to this podcast, of course. So we help break out the statrics by pointing out your practice and then people can realize that things could be better. I think so. And you gave a great example about Uber and your statrics podcast and I was applauding you that entire podcast, of course, but I think the way you describe the Uber thing is people can't quite fathom what that would look like. You know, some people will describe as anarchy and transportation services, what that would really look like. If you describe that to someone who'd never done Uber, they're like, oh, that sounds scary and that'd be really expensive and people would rip me off and people don't like taxi companies usually. But if you describe to them Uber, they would probably reject the idea. But the very first time you ride in an Uber and experience the service and the quality and the cost, you're like, that's amazing. How is that not mainstream? How has this not been here forever? Thanks for listening. If you enjoy free thoughts, please take a moment to rate us on iTunes. Free Thoughts is produced by Mark McDaniel and Evan Banks. To learn more about libertarianism, visit us on the web at www.libertarianism.org.