Getting The Health Care You Deserve -- Paying For Your Doctor's Unlimited Care

SEATTLE - Garrison Bliss and Mitchell Karton, like many doctors, were tired of insurance companies telling them how to care for their patients. Looking for a way around the bureaucracy, the two physicians discovered the price people will pay for peace of mind.

Their practice, Seattle Medical Associates, is an unusual medical consultancy, where people pay for a doctor's know-how. For a range of fees, patients get unlimited access to a doctor they know who will guide them through the maze of hospitals and medical specialists they may encounter if they do get sick. There are unlimited office visits, an annual physical and X-rays as needed, but no ties to the insurers and health-maintenance organizations that most Americans now encounter.

It doesn't take Medicare or Medicaid either. Instead, SMA promises the kind of personal, around-the-clock attention that people used to associate with their family doc.

Many of their longtime patients had to think hard about paying almost $800 more a year on top of other health costs, and a lot of their old patients have left. Others are happy that they stayed. "It's expensive, but this matters," says Julie Blacklow, a 51-year-old free-lance television producer who recently called Karton at 1 a.m. complaining of chest pains that she feared signaled a heart attack. He talked her through her symptoms, then told her - correctly - not to worry.

"To give someone access, that may be the best medicine of all," Blacklow says. "That's priceless."

Maybe. But such added prices are too high for many Americans and point the way to a multitiered medical system in which the quality of care might depend even more than it does today on the thickness of the patient's wallet.

For years, patients have been clamoring for more personal service, for example by choosing HMO programs that allow them to spend extra money to gain access to more choices in doctors and treatments. Now, doctors themselves are devising ways to satisfy the growing demand for attentive care. Some offer added services, such as deluxe executive physicals or alternative medicine, that often aren't covered by insurance plans. Bliss and Karton are among a small but growing number who have found a way to dispense entirely with insurers' reimbursements.

Of course, there have always been the so-called Park Avenue doctors who charge high fees and cater to millionaires. But personal physicians tapping into the middle and upper-middle classes signals a significant change in the nation's health-care climate.

Robert Elkins, chief executive of Integrated Health Services Inc., a nursing home and health-care provider, says some sort of pay-it-yourself medical care is an area he will explore if he starts another company. "I think there is a huge market out there," says Elkins, who is also a physician. "We're going toward a two-tier medical system in a very dramatic way."

Some question whether a major change lies ahead. The American Association of Health Plans, which represents HMOs and other managed-care companies, notes that most U.S. doctors - about 90 percent now, compared with 61 percent in 1990 - contract with managed-care concerns.

Others, however, worry about an increasingly popular multitiered system. Critics argue that a private-payment system will steer the best doctors to people who can pay the most for treatment, and that will siphon off the wealthy, well-connected people who could sway lawmakers to reform the health-care system.

Bliss and Karton say they aren't making much more with their new setup, but feel they have made the right choice. The two men first worked together in the intensive-care unit of an inner-city Seattle hospital in 1979. A year later, Bliss went into private practice in Seattle. Karton, who was on the faculty at the University of Washington, joined him in 1986. "We enjoyed our practice enormously," says Bliss, 48.

But in ensuing years, their traditional fee-for-service practice gradually moved toward more managed care. Insurers who had reimbursed the doctors based on what the doctors charge for procedures began slashing payments. Bliss says his reimbursement fell to under 50 percent of office charges in 1996, from around 95 percent in the early 1990s.

Worse, says Karton, 45, is that the employers and insurers responsible for most health plans began viewing doctors as interchangeable. "There was no reward at that point for better work or better patient satisfaction." The quantity of patients, not the quality of care, seemed like it was becoming the main criterion.

In 1994, the two men affiliated with a larger group of doctors, a move that promised better business management and economies of scale. But the group's contracts were soon taken over by a company intent on imposing even stronger managed-care discipline, including suggestions that the two increase their patient load. "We weren't about to start seeing 30 or 35 people a day," says Bliss, who was seeing around 25 people a day. Before long, "I'd come to work and want to run screaming," says Bliss. "Financially, I was doing fine, but I hated the practice."

In 1996, two colleagues at the practice left to become healers to the opulent. For about $20,000 a year per family, Drs. Howard Maron and Scott Hall would oversee all medical care, even flying to a client's vacation home, and keeping their cell phones turned on 24 hours a day.

It was a hit: The two now work in art-filled offices where a select group of clients - just 50 families per doctor - are buzzed in through an intercom system.

Bliss and Karton were wary of such an ultra-exclusive practice, but were also intrigued by the successful move away from managed-care dictates. Pulling off the same trick at a more affordable level was hard, though; virtually all insurance contracts, including the government insurance for the poor and elderly, Medicaid and Medicare, forbid physicians from tacking on a surcharge to cover costs beyond what the insurer pays.

Karton pored over every insurance contract the doctors had ever signed, looking for ways to get paid for kid-glove treatment. He and Bliss talked with consultants, who discouraged their plans for a cash-based practice, and with patients who had legal and insurance expertise of their own.

After more than a year, the doctors hammered out a plan that worked by abandoning the traditional billing structure: Seattle Medical Associates offers guaranteed access to a knowledgeable doctor with good connections in the health-care system. Patients over the age of 35 pay $65 a month for the service; those between the ages of 21 and 35 pay $35 a month; and children over 14 can be added for an extra $10 a month. They don't take patients younger than 14. Patients also are urged to buy health insurance that covers additional care, such as surgery, specialists and hospitalization, which the doctors often orchestrate as part of their service. There is no limit on the number of patient visits.

The doctors don't bill third parties, but maintain relationships with some insurance-related companies so they can refer patients to specialists affiliated with those plans. That personal guide through modern health care's maze of specialists and gatekeepers is what many Seattle Medical Associates' patients value most.

Glenn Fleishman, a 30-year-old self-employed technology consultant, took a variety of complaints, including fever, weight loss and night sweats, to Bliss last January. Within a few minutes, the doctor made a preliminary diagnosis of Hodgkin's disease, and his staff began looking for a top oncologist who could see Fleishman fast. Some cancer specialists didn't have an opening for more than a month, but the staff secured a rapid visit with a friend of Karton's who is a highly regarded local oncologist, plus another physician for a second opinion. Fleishman's diagnosis was confirmed, treatment was started, and he says he now is in remission.

"It's been pretty darn easy, the whole process," Fleishman says. "I've had the best-possible worst experience, and it's because of them."

In another nod to traditional family-doctor service, a few of the doctors' patients are able to negotiate discounts. One even pays in home-grown produce, according to the doctors. "Our demographics haven't changed," says Karton.

Still, some patients have had to make sharp adjustments to the new system. Geri Alhadeff, a 48-year-old teacher's aide, came to Bliss after losing Maron to the gold-plated practice. When Bliss began talking about launching his own fee-based service, she recalls thinking, "Oh, great, another one down the tubes." Bliss offered her a discount from his normal fee, but Alhadeff still pays a premium over her family's $500 a month in medical insurance. Her husband and children no longer see Bliss. "We truly could not afford to have me do it and my husband and my two kids," she says. Still, she says, the extra fees are "kind of a reasonable rate. . . . I don't feel it's for the wealthy."

Doctors who feel trapped in the current system might envy the setup, but consultants who worked with physician groups call the practice a rare success. Others have tried, but "when they ran the numbers, it just wasn't feasible," says Ann Pietrick with Scheur Management Group. "It's just not feasible in any market I'm aware of to make it work without a wealthy population."

Even Karton has his doubts about his kind of practice working on a widespread basis. "It's incredibly hard to structure," he says. "It requires a certain history with your patients." People who had been going to the doctors for years were more likely to be willing to pay a premium to keep their services. He and Bliss have about 1,300 patients, about one-third the number of patients they used to have, and a figure they think is optimal for their practice. They earn the average salary for internists, around $140,000 to $150,000 a year.

The doctors say they can now frequently leave their offices, which provide a panoramic view of Seattle's mountains and waterways, by 5 or 5:30 p.m. They have time to read medical journals and keep up with changes in medicine. There is a staff of about five, including nurses. The billing department is a lone personal computer, where Bliss spends about four hours a month updating records.

The service has also won improbable converts. Roland Jankelson, who co-owns a medical-devices concern in Tacoma, had his family and his employees with a managed-care company. There were complaints about managed care, even from his wife, but Jankelson says he thought "they were just complaining about inconvenience."

Last March, his wife was diagnosed with ovarian cancer. She was admitted to a local hospital, but Jankelson thought she would have been diagnosed much earlier if she had had more attentive treatment from just one doctor. His brother recommended his own physician, Bliss, whom the executive called that night.

"He got back to me within a matter of minutes," Jankelson recalls in awe. By 11:30 the next morning, Jankelson's wife was on her way via ambulance to a hospital in Seattle where Bliss helped assemble a team of specialists to work on her care.

When his wife got sick, "insurance wasn't an issue," says the 59-year-old Jankelson. "I would pay whatever it took."

Copyright 1998 Dow Jones & Company, Inc.