In October, 2017 Dr. Joseph Costello and his wife Ashlea opened Costello Foot and Ankle Clinic and successfully implemented a direct pay business model. Their mission was to provide the highest quality podiatric medical care without accepting insurance of any kind.
Their clinic utilizes only the latest in technology and offers next day appointments, no lobby wait times and lengthy, non-rushed visits at prices that are usually much lower than utilizing insurance. Dr. Costello is the spokesperson for the Missouri chapter of the Free Market Medical Association.
Dr. Costello believes the practice has been very successful because early in his career he experienced, first-hand, the frustrations of third party interference. This experience inspired the Costellos to break away and venture into the free market. “Ultimately I did what I believed was better care for the patient.”
Like a majority of doctors, Costello began his career with carriers. “Entering the workforce, I thought I had found a golden opportunity by hiring a management company to perform all of my administrative duties; scheduling, marketing and insurance claims. I believed my claims would be processed correctly. More importantly, I believed that by enlisting their services, I would be able to focus completely on providing great patient care and still have time to pursue other things I enjoyed in life.”
Dr. Costello quickly found, however, he could not have been more mistaken.
By handing over all administrative responsibilities to someone else, especially an insurance company, he realized he had absolutely no control in any aspect of his business.
After suffering through numerous unfulfilled promises and being routinely overworked by 55-85 patients per day, he realized that he and the management company had much different goals in mind.
“After much deliberation I was able to break away from my agreement with them successfully,” Costello says. “I regained my freedom to practice podiatry in the way I chose, with the primary goal of placing the patient first.”
Following his separation from the management company, Dr. Costello searched intensely to discover a way to practice medicine without third party interference, while simultaneously sustaining a viable business with a great quality of life.
Frustration ensued, but eventually he came across the Free Market Medical Association during an online search and set about attending their next national conference. “Megan Freedman of the FMMA provided details and happily welcomed my wife and me to the conference with open arms.”
While his new membership felt promising, Costello was still not completely at ease about taking the leap. He recalls while he was certain he did not want to incorporate insurance, there was still the challenge of finding a workable business model for a specialist who does not have a high volume of routine or repeat patient visits.
“I knew the widely used subscription model successfully incorporated by numerous direct primary care physicians would not work for me.”
However, at the conference, he heard an a very talented featured speaker, Jack Brown and his wife, Dr. Kathleen Brown. The Browns own Oregon Coast Dermatology, a successful free market dermatology practice and a light bulb went on. Jack described the direct pay model they used at their practice, “My heart began to race,” Costello recalls. “Instantly, I realized this model would work great for podiatry as well and it has proven to do so.” He adds that the Jack and his wife have become great mentors and been a tremendous source of inspiration. “They have always been there to offer guidance and wisdom during our struggles.”
Making it Work
As the business continues to expand, the Costellos are reaching out to self-insured employers to let them of the benefits to be had by aligning themselves with providers who utilize a direct payment system.
The Costellos’ business model implements time-based billing, which is very similar to other professional services.
Adherent to the pillars of the Free Market Medical Association, all of their prices are listed online and they believe in providing complete transparency to the consumer at all times.
Unlike insurance-based medicine, care is the product, and by creating a high-quality product where value is based on price and quality, the self-insured employer can rest assured their money is being well spent.
“After much deliberation, I was able break away from my agreement with [my medical management company] successfully. I regained my freedom to practice podiatry in the way I chose, with the primary goal of placing the patient first … Implementing a direct pay model has not been easy, but it has definitely been worth it.”
~Dr. Joseph Costello
The Strength of FMMA
The Costellos report spreading the word of the benefits of free market medicine has been made easier with help of the FMMA. However, the challenge still remains to shift the mindset that direct pay is a more viable option.
As the spokesperson for the state of Missouri, Costello is actively reaching out to other health care providers and consumers. He and the FMMA are educating the public and uniting direct primary care providers and specialists throughout Missouri.
Costello Foot and Ankle Clinic has been in business for eight months and they are pleased to have received an enormous amount of positive feedback from patients. Dr. Costello sees no more than eight patients per day and allows at least one hour for each patient. Patients report they love that their doctor is not in a hurry to get their appointments completed.
As a result, there is never any lobby wait time. In addition, they use only the latest in technology, and because they have no overhead associated with accepting insurance, prices are usually much more affordable than an insurance co-pay.
“Since opening our doors I have found a sense of happiness that I thought was lost;” he says. “I now look forward to each day and always sleep soundly knowing that I provided the best care possible at prices that were fair.” He does admit that he may never have taken the leap had he not experienced the management struggles early on, but it has definitely been worth it.
He also credits his wife and family as partners and loving supporters and adds emphatically, “To all the providers considering a direct payment model, I say take the leap. It’s time to get your life back. I know you can do it!“