Kim Stanley shook out a white pill from a prescription bottle and poured herself a glass of water, at the kitchen sink of her North Huntingdon Township home. The antibiotic was to treat an infected cut on her leg.
Stanley lost her insurance after she quit her accounting job earlier this year to work part-time for herself, in order to spend more time with her teenaged daughters.
“Yes, it was a calculated risk. I’m a widow,” she said. “All my girls have is me.”
Because of that calculated risk, Stanley said she was thrilled to only pay $35 to see Dr. Timothy Wong, a primary care physician, who wrote her a prescription for the antibiotic.
In August, Wong opened a “micro” practice in the Pittsburgh neighborhood of East Liberty on Centre Avenue, called the iHealth Clinic. The office has dark blue walls and still smells faintly of new paint.
“Purple and green were already taken,” joked Wong, in reference to the branding of UPMC and Allegheny Health Network, two integrated health systems that dominate the medical and insurance markets in western Pennsylvania.
Wong’s practice is about as opposite of UPMC and AHN as a physician can get in Pittsburgh. He’s doesn’t accept any form of insurance. Patients pay up front for care at an iPad station when they check themselves into the clinic.
For each medical visit, Wong charges a flat fee of just $35.
Before opening iHealth in August, Wong had been a doctor at Indiana Regional Medical Center in Indiana County, where he was also the director of quality for the hospital system's physician group. Insurance companies, he said, routinely argued with him about what was medically necessary for patients. This meant hours of paper work.
“After about four-and-a-half years of dealing with some of the insanity of the system, I was like, ‘You know what? It is not ethical, in my opinion, to be a part of a system that was failing,’” said Wong. “I felt kind of emotionally drained and physically drained.”
“Everybody wants slightly different information,” said Julie Sakowski, a health care economist at Seton Hall University, in South Orange, N.J.*
Sakowski has researched how much medical practices spend on communicating with insurance providers. Sakowski puts it between 10 and 20 percent of a practice’s income.
“They’re requiring different documentation. And they have different policies on what they’re going to cover,” she said. “Keeping track of that is very work and labor intensive.”
Wong said his business model allows him more time to see patients and generate income.
And he has no employees.
Patients pay up front, so Wong’s practice doesn’t employ a biller. And since he doesn’t accept insurance, he also doesn’t have a medical coder, which is a person whose job is to submit documentation to insurance companies. These are the reasons, said Wong, why he can charge patients so little.
After contacting several medical associations and health policy experts, it’s still unclear if there are any other primary care doctors that have iHealth’s exact business model.
“It’s definitely a niche market,” said Sakowski.
Even with less paperwork and no payroll, Wong’s $35 fee per medical issue is minimal.
If iHealth averaged 20 patients a day, it would net $182,000 annually. That income would have to cover rent, utilities, malpractice insurance, medical and office supplies, taxes, and Wong’s salary.
Right now, about four patients walk through iHealth's doors a day, and it might be a while before Wong is generating enough to pay his bills.
He said he got iHealth off the ground using his personal savings. With his current patient load, and by forgoing a salary, Wong said he’s breaking even. He explains that his wife’s salary helps cover their personal expenses.
“I think the estimates are that it takes maybe two years to get fully busy for a new medical practice. So, I’m waiting,” he said. “But I’m hopeful.”
Out-of-pocket costs for insured patients continue to increase, and 2019 is the first year U.S. tax payers won’t be penalized for being uninsured. Therefore, more under-insured and uninsured patients might end up needing Wong’s low-cost care.
*An earlier version of this story misidentified Seton Hall University.