Four years ago, Michael Stein ran a medical practice that, by all conventional measures, was highly successful. Stein earned about $300,000 a year and provided primary care for nearly 4,000 patients.

But, Stein said, "I was killing myself."

He needed 10 full time employees to manage the workflow. He often had appointments booked as frequently as every five minutes. He would finish a 12-hour day with stacks of untended charts littering his desk.

Stein's alone time was in the mornings and evenings when he would bicycle the 40 round-trip miles between his home and his office. As his frustrations mounted, he started mulling new possibilities. On the bike one day, he reached a critical realization: If he could cut health insurers out of the equation, he could run a practice with a much lower overhead. He could see fewer patients a day, give them better medical care, and still make money.

It took a bit longer for the details to fall into place, but these days Stein practices medicine with a small office, one employee (his wife), long appointments and short waits. For $1,000 a year ($1,500 with certain extras), patients get unlimited access to Stein and his care. For no additional fees, they can come in for lengthy annual physicals; they can visit him weekly for advice as they quit smoking or change their diet; they can call him during the weekend when their child cuts a leg and meet him at his Hampstead office to get the cut stitched up. Because the annual fee guarantees his income, Stein can afford to see many fewer patients, which means he knows them all better and can spend more time with each of them.

Stein's practice is one of small but growing number of practices in the country that are tinkering with the traditional business model of the primary care practice. Stein's practice model is a variation on what's often called "concierge," "boutique," or "patient financed" medicine, a system where patients pay higher fees in exchange for more personalized care.

Proponents of concierge care say it has the potential to solve many of the problems doctors and patients are facing in primary care. But critics say that concierge care simply provides better care for those who can afford it, and offers little to help those without $1,000 to spare. Though many concierge doctors, Stein among them, offer charity care to a few needy patients, most poor patients, even those with health insurance through the government Medicaid program, will be unable to pay Stein's fee.

"He, in essence, is in a win-win situation currently, because he is able to cherry pick patients and charge them extra, but that raises all the ethical issues," said Dr. John Wasson, a professor at Dartmouth Medical School who studies innovative medical practice designs. "What he's doing is in essence good business and a model for success, but it's hard to replicate and obviously not very good for Medicaid patients."

Insurance complications

For Stein, changing his practice brought the wastefulness of the conventional health system into sharp focus. At his old practice, he estimated his overhead at $350,000, and he believes that most of it went toward meeting the needs of health insurers. He needed experts to read his charts and plug the right insurance codes into his bills. He needed staff to secure prior permissions for prescriptions and procedures. He had one employee who worked 40 hours a week just arranging patient transfers to specialists.

He also calculated that he needed to see 25 patients a day just to cover his overhead. In order to make his salary, he often saw 35 or 40. And he never could spend as much time as he'd like with them. According to his wife, Gena, practice employees had developed a ruse to keep Stein from talking to patients for too long. When a patient visit ran over, someone would knock on the door and tell him that another doctor was on the phone.

"You can't take care of 25 or 30 patients a day," Stein said. "That's not possible. What you're doing is running a cattle drive."

His new practice, he said, has an annual overhead of $50,000, and that number includes the flat screen television and leather couches in the waiting room, the Starbucks coffee brewing behind the reception desk, the electronic record software and the high-tech diagnostic equipment that Stein bought when he opened his doors.

Gena Stein answers the phone and schedules appointments, and she also helps during patient visits with vital signs or testing. (She was trained as a respiratory therapist.) The cushy waiting room is usually empty. That's because with a current patient load of 250, Stein often sees a half-dozen patients a day. That slower schedule means that patients can see him right away and frees him up to attend to emergencies when they happen. Stein would like to see his practice grow a little but said he couldn't imagine going higher than 600 patients.

The key to his financial model, he said, is that he doesn't sign contracts with insurance companies, which means he's not bound by their reimbursement rates and not subject to their rules. He can decide what tests to perform or drugs to prescribe without having to make phone calls or fill out forms. He also doesn't have to worry about laws governing health insurance or Medicare fraud. Since he doesn't bill the companies, he doesn't have to follow their rules.

Part of Stein's contract with patients is that he will be available at all times. Patients have his cell phone number and are welcome to call him at night or during the weekends if they're having a problem.

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