Startup DPC Show Episode 6: Interview with Harvard-Trained DPC Pediatrician

Harvard-Trained Pediatrician Starts Her Direct Primary Care Practice in Dallas Texas

Welcome to Episode 6 of the Startup DPC Show, and in this episode we have the pleasure of speaking with Tonya McDonald, MD. Dr. McDonald is a Pediatrician and the founder of Radiance Pediatrics in Dallas, Texas. Dr. McDonald trained at Harvard Medical School, graduating in 1998 and she completed her Pediatrics Residency at Baylor College of Medicine.

Dr. McDonald is a Pediatrician and the founder of Radiance Pediatrics in Dallas, Texas. Dr. McDonald trained at Harvard Medical School, graduating in 1998 and she completed her Pediatrics Residency at Baylor College of Medicine. She is the featured Direct Primary Care doctor for our Startup DPC Show, Episode 6.

Dr. McDonald was recently interviewed by Harvard Medical School’s Magazine in a section called The New Black Bag. Here’s a segment of the interview:

This past spring, she opened Radiance Pediatrics, a direct primary care practice that provides in-home and virtual pediatric care to families who pay a flat monthly fee. For this fee, families get extended visits, same- or next-day appointments, telemedicine visits, and direct access to McDonald through phone, text, and email.

“In some ways, this is a throwback, an old-school approach to medicine,” she admits. “But it gives me the opportunity to help rebuild the doctor-patient relationship. It’s a gift to be able to truly bond with families.”

Not long ago, McDonald was part of the 78 percent of U.S. physicians struggling to cope with burnout, a problem some have labeled a public health crisis.

“In the past five years, I was seeing up to thirty children a day, feeling sad that I couldn’t practice medicine the way I wanted,” McDonald says. “Insurance dictated what I could do.”

McDonald knew it was time for a change. And she’s far from alone.

As shown in the interview from HMS above, Dr. McDonald is a quintessential physician on the front lines of the healthcare system, dealing with a packed schedule and not having enough time to fully take care of patients. I also love that she says that she now has the opportunity to rebuild the doctor-patient relationship - I put that in bold for emphasis. Now that we have some context, let’s jump into the interview!

Dr. McDonald’s Startup DPC Story

Dr. McDonald had heard about direct primary care ten years ago, but put it in the back of her mind. Three years ago, while working for Children’s Hospital of Dallas, she got tired of seeing 24, 25, or 30 high-risk pediatric patients each day. This was especially difficult when she was taking care of high-risk, high-needs children with complicated medical problems and adverse social determinants of health. Having only 10 minutes for these patients didn’t work for Dr. McDonald.

The final straw was when her pediatric group was “restructured” to an even higher volume practice with multiple physician extenders in the group. She was laid off, took a severance package, and started planning her transition into direct primary care.

Caring for an underserved community with Direct primary care

Dr. Tonya McDonald is serving pediatric patients and families on the south side of Dallas. Dr. McDonald states that there’s a lot of money in Dallas, but most of that wealth is concentrated in Downtown or on the North Side of the city. She goes on to say that the south side of Dallas has a majority minority population - about 40% African American and 30% Hispanic. The median income in the community is roughly $55,000 each year. She alludes to the historical context of living in the south with restrictive housing covenants, which accounts for income inequality and segregation in this area. Dr. McDonald wants to serve in this type of community because she’s a black, female Pediatrician and she enjoys taking care of people in this population. She also alludes to making an impact by being a role model for kids who may not be able to see a black pediatrician, and she also discusses how it’s empowering to serve in a medically underserved community.

Photo of Dr. Tonya McDonald making a house call, courtesy of Harvard Medical School’s a New Black Bag series.

How Direct Primary Care can Address Health Disparities

Dr. Tonya McDonald discusses how some people hear about a “members only” clinic and think that it’s exclusively for the rich. On the contrary, she takes care of folks who are truly in the middle - these are the folks that make too much to qualify for Medicaid or Children’s Health Insurance Program (CHIP) but they don’t make enough to afford private insurance. These patients are willing to save up and cash pay for their healthcare services, but they didn’t have access to affordable options. Now that Dr. McDonald is in the market, these families now have that option to save up and cash pay for an affordable, accessible pediatrician. These families understand the value of direct primary care and the cost savings therein.

How much does a pediatrics direct primary care membership cost?

For Dr. Tonya McDonald and her Radiance Pediatrics practice in Dallas, she charges a monthly membership that costs $125 per month for children from birth to 2 years of age, $100 per month for children 2 years of age to 15 years of age, and $75 per month for adolescents and young adults from 16 to 26 years of age. She also has some discounts available.

Membership Fees:

One Time Enrollment Fee: $100 Per Child

Introductory Monthly Fee For First 25 Families:

0-2 Years - $125

2-15 Years - $100

16-26 Years - $75

Discounts Available: 3 Or More Enrolled Children; Foster Care Children; Full Annual Payment; In-State College Student

Knowing the market when setting your prices

Dr. Tonya McDonald took a look around at the different healthcare costs in the marketplace, namely the costs for home births, doulas, midwives, and similar services. She notes that families in her community were often paying $5,000 to $12,000 for 9 months of care from a midwife and $2,000 to $3,000 for perinatal care from a doula. In that context, paying $100 each month for high-quality, evidence-based pediatric care is not that much money.

“People who value you will pay you what you’re worth.” - Dr. Tonya McDonald

Dr. McDonald also talks about folks in her community who pay $125 for lash extensions plus $75 every 2 to 3 weeks for maintenance of her lashes. In that context, paying $100 each month for high-quality, evidence-based pediatric care is not that much money. She goes on to say that “People who value you will pay you what you’re worth. And those who don’t want to pay you what you’re worth probably wouldn’t pay you consistently for the long term, even if you were half the price because they just don’t value you.”

What are the monthly expenses like for a house call only Pediatric Practice?

Dr. Tonya McDonald works out of a co-working space and she’s surrounded by other entrepreneurs. These folks are smart risk-takers, they’re all about new ideas, and they help her to become a better business person. By renting space at a co-working space, she doesn’t have to use her home address as her business address. She also has storage space for her supplies as a part of her rent, which is $300 per month.

She bought a separate car via her business because it’s easier and cheaper to maintain with commercial insurance. Buying this relatively inexpensive car helps to build credit for her business as well. She buys a lot of her supplies via Henry Schein and Amazon, and she even splits supplies with other local pediatricians. This helps to keep her overhead low.

They are not able to dispense medications in Texas, because it’s not legal for physicians to dispense medications in Texas. This is one of the rare exceptions in the DPC landscape, as virtually every other state in the US allows for physicians to dispense medications from their offices, but not Texas.

Malpractice Insurance is $71 monthly for claims-made coverage. She shopped around and looked at 4 different carriers and also negotiated. She states that as a DPC practice, you have a lower volume, you don’t have 2,000 or more patients, so you should be paying a lower malpractice insurance rate. She expects her malpractice insurance to max out at $300 per month.

What do you do for Pediatric Vaccines in your direct primary care practice?

Dr. McDonald has partnered with some pediatricians in town to purchase single vaccines from their bulk stock. She has a PedsPal account, so she knows how many vaccines she’ll need for the year, and she keeps a log of what she uses and pays the pediatrician for these vaccines. She then bills her patients directly for the vaccine cost, at cost. If her patients are uninsured, she directs them to the county health department for their pediatric vaccines, which are $5 per shot. Finally, children over 7 can get their shots directly from the pharmacy, covered by the insurance with no copays, so she directs families to this option as well. For a few of her patients, she can give the vaccine and bill through VaxCare, which bills the patient’s insurance for the vaccine.

Thank you for reading! To watch the full conversation, see our YouTube video below.

Resources for starting and growing a direct primary care practice

If you’re interested in learning more about starting and growing your direct primary care practice, head over to our courses where you can learn how to attract more patients to your practice, write the perfect business plan, or find the perfect space for your growing DPC practice.

Sincerely, Dr. Paul Thomas

Startup DPC Show Episode 5: is Direct Primary Care feasible for Pediatricians?

is a direct primary care practice feasible for a pediatric doctor?

There are so compassionate doctors out there who want to take better care of their patients, and they see the direct primary care (DPC) model as a way to accomplish this honorable goal. During our Startup DPC Show Episode 5, we talk with Dr. Ashley Walker, MD of Hurley Medical Center about what it takes to start a Pediatric-focused direct primary care practice. For some context, this interview was recorded in mid-October 2019.

Ashley Walker, MD is a second-year pediatric resident at Hurley Medical Center. She has worked in the military as a general practitioner and is now completing her Pediatric Residency. Therefore, Dr. Walker has a unique perspective and should she start a DPC practice, she will bring her own unique strengths and insights to that practice.

Why do you want to go into the Direct Primary Care Model?

Dr. Walker discusses why she wants to start a DPC practice, and she talks about having more autonomy to do what’s right for her patients.

How much should pediatricians charge for direct primary care services?

Most Family Medicine direct primary care practices charge a price that’s based on age, and it increases as a patient ages. Our price point for kids is $10 per month for kids, which would not be sustainable for a pediatric practice. Other price points in the marketplace include places like Nova Direct Primary Care, and they charge $29 per month for pediatric patients.

During our conversation, I thought of a physician I met at the 2018 AAFP DPC Summit, Dr. J. Bryan Hill at Gold Standard Pediatrics. His prices are as follows:

·      ​Birth to 2 Years: $70 per month

·      2 Years to 12 Years: $45 per month

·      12 Years to 18 Years: $35 per month

There are definitely fewer pediatricians operating DPC practices, so I was unable to find an average cost at this time, but the above is a reasonable place to start. The idea is that younger children will need more frequent visits, and thus will pay more for the service informs Dr. Hill’s price points.

This pediatric pricing is in contrast to how adult medicine pricing works for the typical DPC practice. The adult pricing usually increases as patients increase in age, with geriatric patients paying the most. In pediatric pricing, the youngest children will pay the most because they require more care and attention and more frequent visits.

Are There Conferences Where You Can Learn More About Direct Primary Care?

There are three major conferences where you can learn more about Direct Primary Care:

Paul Thomas, MD of Plum Health DPC and Ashley Walker, MD of Hurley Medical Center talk about what it takes to start a Pediatric-focused Direct Primary Care practice. We had fun with this one!

• Docs 4 Patient Care Foundation DPC Nuts and Bolts Conference

• American Academy of Family Physicians (AAFP) DPC Summit

• Hint Summit 2020 — Take Direct Primary Care to New Heights

Is Direct Primary Care a more equitable way to practice Medicine?

I believe that direct primary care is a more equitable way of delivering primary care medicine. First, there are so many people who fall through the cracks of our current health insurance based system for delivering care. If you earn too much so that you’re disqualified from Medicaid and if you don’t earn enough to comfortably afford private insurance, the current fee-for-service can be harmful. DPC gives folks another option for receiving high-quality, compassionate primary care medical services.

Specifically for Dr. Walker in Flint, Michigan, anytime you work in an urban, underserved community, you have a great opportunity to give back to your community.

Are patients allowed to pay for Direct Primary Care services with HSA Funds?

As written, the current tax code precludes folks from using their HSA funds to pay for direct primary care services. Pragmatically, people are using their HSA funds to pay for direct primary care services. It’s up to you, with input from your trusted lawyer and trusted accountant regarding whether or not you want to take the additional risk of accepting payments via your patients’ HSA accounts.

How can you balance home and work life when you are a Direct Primary Care doctor?

You start by setting clear expectations for your patients about how you want them to treat you. You can teach people how to treat you by the way you respond to their requests. For example, it’s really good to be responsive to your patients’ phone calls, text messages, and emails. However, sometimes it’s better to be more responsive during the week days and normal business hours and less responsive during the weekends and after hours for non-urgent concerns. Of course if there’s an urgent or emergent concern, you should respond immediately and give proper guidance.

For me, I really protect my Saturdays and Sundays as dedicated time with my family. I make sure that all of my patients are aware of this. I also take enough vacation time to stay fresh and focused when I’m at the office and to create great memories with my family. This is a balancing act, and over time you can figure this out.

For patients who work long hours and can’t come in during normal business hours of 9 am to 5 pm, I can come in to the office early and see them at 8 am or stay late until 6 pm. I do this on mornings or evenings when my spouse is working so that I can maximize the time that I have with my family.

Do Direct Primary Care doctors typically use an answering service?

For me, all of my patients have my cell phone number so they can easily text or email me with their concerns. With their concerns clearly communicated, I can easily triage their text messages and concerns. I haven’t used an answering service for this reason. I think the majority of DPC doctors operate like this.

How do you negotiate prices for meds, labs, and imaging services?

There are typically flat prices from Medication Wholesalers like ANDA Meds out of Florida or Bonita Pharmaceuticals here in Michigan. We use Regional Medical Imaging in Flint, Michigan, and they have flat cash prices for their imaging services. We have a list of our prices and when we order an imaging study for one of our patients, we simply show them the price points and ask if they’d like to pay cash for the imaging study or use their insurance plans. For Lab services, this is a bit of a game and it takes grit and determination to get the lowest prices, especially when you’re working with LabCorp or Quest Diagnostics. My best advice is to ask around for other DPC practices’ price points on laboratory services and see if one of these lab companies will match those prices. Keep calling and asking until you get what you want.

How often do you do point-of-care testing?

We do point-of-care testing frequently. Just about every week, we’ll run an EKG, typically for folks with anxiety-related or musculoskeletal-related chest pain. An EKG machine costs about $1,700, so it’s an investment but ultimately worth the cost for the value it provides to our practice.

We also have a PFT machine that cost us about $700. This is another useful tool in our office. We do point of care glucose testing, fecal occult blood testing, rapid flu, and rapid strep testing. We also have a microscope in the office and we use this just about every other week or every month to help in diagnosing a case of vaginitis.

We don’t offer point-of-care testing for lipid panels or A1c testing because we get the results next day through our laboratory vendor.

Is Malpractice Insurance Affordable for Direct Primary Care Practices?

The biggest line items in your budget are square footage and staffing. If you hire a medical assistant and pay them $17.50 per hour, this will come out to $3,400 each month including salary and payroll taxes. When we were renting a small space, it was $600 each month. Now, we’re renting a larger space and it’s $2,800 each month. Each month, we buy roughly $1,500 to $2,000 in medications. Each month, we spend $1,500 to $2,000 on labs. These are the bigger line items in our budget.

As for malpractice insurance, it comes out to roughly $450 monthly or $6,000 for the year at our practice. Also, our practice in Detroit has some of the highest malpractice rates in the State of Michigan because I was told by my insurance broker that Wayne County is a highly litigious county.

How do you or how should you staff your clinic?

As a solo doctor, you can handle many of the daily tasks in your DPC practice and you don’t necessarily need to hire a Medical Assistant or Nurse. However, hiring a Medical Assistant to help you draw blood, fill out forms, return faxes, call the lab company, take incoming phone calls, and go through the contract with prospective patients can be tremendously helpful. This can free up your time to spend more of your time and energy to focus on patient care and grow your business by reaching out to new patients and small businesses with employees who may want to sign up for your service.

Thanks for reading and thanks for watching - sincerely thank you to Dr. Ashley Walker for the excellent questions about direct primary care - I wish you the best of luck in your journey!

If you’re looking for more excellent content like this that can help you start and grow your direct primary care practice, check out our courses on Writing a Business Plan, Attracting More Patients to your DPC practice, and How to Find the Perfect Space for your DPC practice.

- Dr. Paul Thomas, MD