Person

Seven Years Without a Billing Department

DR Dr. Ravi Menon

Everything we know about running a member owned primary care clinic, written down because six people asked me the same questions in the same month. Real numbers where I can share them, and the mistakes in the same size type as the wins.

01 The numbers people actually ask about

Fees, break even, panel size and what the dispensary does to a member's monthly cost. I would rather publish this than have another clinician plan a practice on guesswork the way I did.

What a member pays and what it covers

Our fee schedule in full, and the eight month plateau between opening and break even that nearly ended us.

79 dollars a month for an adult, 139 for two adults in a household, 20 per child, free under two. That is the whole price list. It covers unlimited visits at thirty to forty five minutes, same or next day urgent access, direct phone and text to your physician, and in office procedures including laceration repair, joint and trigger point injections, skin biopsies, cryotherapy, casting and IUD placement. We break even at about 370 members per full time physician at our rent, which is 21 dollars a square foot on 4,200 square feet. We hit 180 members in month four and then sat between 180 and 210 for eight months. That plateau is the part nobody told me about and it is where most practices like ours die. Growth after that came almost entirely from members telling other members, not from anything we paid for. The fee has moved once in seven years, from 69 to 79 dollars in 2023, and the member assembly voted it through after seeing the same accounts we saw.

The dispensary is the whole ballgame

Wholesale generic dispensing changed our members' costs more than any other single decision, and the licensing was easier than we feared.

We stock about 140 generic medications and dispense them at our acquisition cost plus a small handling amount that covers the pharmacist's time. Amlodipine, metformin, lisinopril, atorvastatin, sertraline, levothyroxine, prednisone, the common antibiotics. A member on three chronic medications typically pays under 12 dollars a month here. The same three at a retail pharmacy on a high deductible plan ran one of our members 214 dollars in 2019, which is why he was taking two of them every other day and not telling anyone. North Carolina permits physician dispensing with registration and reasonable record keeping. Our setup cost was around 9,000 dollars including the cabinet, the software and the initial stock. It is the highest return decision we have made and I would tell any new practice to do it in year one, not year three like we did.
02 Governance, and what happens when the members overrule you

One member one vote is easy to write in bylaws and harder to live with at the moment the assembly tells you no. Both times they have, we were wrong.

The 2024 fee vote

We asked members for a 12 dollar increase to fund two hires. They said no and told us to hire one person more slowly instead.

In spring 2024 the board proposed moving the adult fee from 79 to 91 dollars to fund a second nurse practitioner and a full time behavioural health clinician. We presented the accounts, the wait time data and the projection, and we thought it was obvious. The assembly voted it down 412 to 289. What they said in the room, roughly: most of us are self employed, 12 dollars a month is real, and you have not shown us you cannot do this by hiring one person this year and one next year. So we did that. It was slower and our Thursday afternoons were unpleasant for about a year. But our member retention through 2024 was 94 percent, and I now think a fee rise that year would have cost us more members than the extra clinician was worth. Governance is not decoration. Twice now the assembly has been more accurate about our members' tolerance than the board was.

How the board is actually composed

Nine seats: five elected by members, three by clinicians and staff, one held for a neighbourhood organisation. Why the last seat matters most.

Five seats elected by the member assembly, three elected by clinicians and staff, and one appointed by a rotating neighbourhood organisation, currently a tenants association two streets away. That ninth seat was contentious when we wrote the bylaws. The argument against it was that someone who is neither a member nor a worker should not vote on our budget. The argument for it, which won, was that a clinic that serves a neighbourhood should have to sit across a table from that neighbourhood at least quarterly. In practice that seat is why we open on Saturday mornings, why our intake forms stopped asking for a social security number, and why we hold 60 memberships at no charge on a rolling basis for people the neighbourhood organisation refers. None of those were board ideas.
03 Mistakes, in order of expense

The four things I would do differently, including the one that cost us 30,000 dollars and eleven months.

The electronic record we chose first

We bought a system built for insurance billing, then paid to leave it. Match the software to the model, not to what your last employer used.

We licensed a well known ambulatory record because it was what we all knew from the hospital. Ninety percent of its surface area is coding, claims and revenue cycle, none of which we do. It cost 1,900 dollars a month, needed a support contract, and made a thirty minute visit slower than a twelve minute one had been. We moved after eleven months to a much smaller system built for membership practices, at 340 dollars a month. The migration cost roughly 30,000 dollars all in, counting the consultant, the double entry period and the four clinic days we closed. The lesson generalises past software. For the first year we kept reaching for the tools of the system we had left, because they were familiar and because we did not quite believe we had actually left it.

Every lab, procedure and medication price we charge, updated quarterly. Other clinics are welcome to copy the format, it took us three attempts to make it readable to a person who is not a clinician.

🔗Our published cash price listsugarcreekfamilymed.coop↗