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Family physician Tony Gerk discusses the article, “Even medical practices aren’t immune from the high cost of employer-provided health insurance.” In this episode, Tony explains the challenges small medical practices face due to skyrocketing employer-provided health insurance costs. He details the constraints imposed by reimbursement rates, the impact of facility fees on patient care, and the difficult choices small business owners must make between profits, patient access, and employee benefits. Tony also explores potential policy solutions such as capping facility fees and increasing price transparency, offering actionable strategies for small business owners and policymakers alike.
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Transcript
Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast. Today, we welcome Tony Gerk. He is a family physician. Today’s KevinMD article is “Even medical practices aren’t immune from the high cost of employer-provided health insurance.” Tony, welcome to the show.
Tony Gerk: Thanks, Kevin. I’d like to thank you for inviting me on the podcast. I’ve been a longtime follower. Your original blog articles were probably some of the first things I read in the medical commentary arena when I was at the University of Colorado in the early 2000s. It’s a great honor to have my article published on KevinMD, and I’m thrilled to be here.
Kevin Pho: All right. Well, thank you so much for writing and for joining me today. So, before talking about the article itself, what led you to write it in the first place?
Tony Gerk: Yeah, so I’m a family physician in rural northeastern Colorado, primary owner of a five-provider primary care practice. We’re actually the only traditional private practice in the entire northeast corner of this state. I bought into the practice that was started by the family physician who delivered me, so I feel a great deal of responsibility to carry on the legacy he left, and we do full-scope practice. We’re taking care of everybody. We do obstetrics, C-sections, work in the hospital and the nursing homes, and so I really feel that we’ve established ourselves as a cornerstone of this community. It’s been very important for us to make sure that we have a viable business model that’s going to keep this practice in place to care for the community.
That’s the background, and then rising costs and a lot of the challenges we’ve been facing in medicine over the last four or five years really brought some of the things I talked about in the article to the forefront.
Kevin Pho: All right, so as listeners know—and I’m sure you know—private practice is really becoming more of a minority. I was talking to someone yesterday on the podcast saying that the numbers of non–private practice physicians are in the low 20 percent and that it’s only going down. Today, I’m sure we’re going to talk about some of the challenges of not only practicing medicine as a family physician, but also the challenges of running a private practice. For those who didn’t get a chance to read your article, tell us what it’s about.
Tony Gerk: Yeah, so the background is an interesting story as well. This past summer, summer of 2024, we were looking at another round of premium increases for our employer health insurance, and it was just shocking. Unfortunately, for increasing premiums, we were getting a 7,500 individual deductible for our employees and a 15,000 max out of pocket for their families—really almost unsustainable numbers for a lot of folks.
I reached out to our state academy and asked if they had any resources or if there were other practices they had heard from. They connected me with a small business majority here in Colorado, who said we really had a story that needed to be told in small primary care practices. They said, “You should write an op-ed.” So, we started working on it, I finished it, and we were lucky enough to have it picked up by KevinMD.
In primary care, just like you alluded to—particularly in private primary care—we’ve got a tough road to hoe. We don’t have all the tricks available to large organizations. We don’t have access to a lot of the funding streams that they do. But, as my mentor always said, the reason we’ve survived is because we can juke and jive. We can make decisions on the fly, we can transform our entire practice really quickly once we have our team members on board and aligned, and then we’re ready to rock. We can make changes quickly and improve care. We know that small primary care practices provide higher quality care at lower cost, but unfortunately, that business model and those successes haven’t translated into the financial success that we’d hoped for.
Kevin Pho: Yeah, it’s almost like the insurance companies are hitting you on both ends, because I’m sure you’re getting pressure on the reimbursement side, but you also have to use them for premiums for your employees, and the premiums are going up while reimbursements are going down. So, as a small business primary care practice, you’re getting hit on both sides.
Tony Gerk: Absolutely. We really try to be as innovative as we can. We participate in every value-based care contract we can find and really have tried to make ourselves an innovative practice. That often just means parity in terms of payment. It doesn’t mean we’re seeing more reimbursement than we had before. So, yeah, it’s difficult.
Kevin Pho: Give us a sense of how many employees you have in your practice.
Tony Gerk: We have 16 employees, with two part-time employees. We have five MAs and LPNs, four front-desk staff, we employ a full-time ultrasonographer, and then we have a couple of nurses who work on the side for us doing chronic care management and that sort of thing.
Kevin Pho: So, for the clinicians who own the practice, tell us about some of the behind-the-scenes stuff in terms of managing the practice financially. You mentioned earlier participating in a lot of innovative products, and you talked about how nimble a private practice is. Take us into some of those discussions about managing the financial pressures.
Tony Gerk: Right. When we see opportunities for improved reimbursement, we’re always going to take those, but ultimately, it comes down to how many patients we can see. We have our foot in both puddles, so to speak. We want to be innovative, drive transformation, do value-based care, which hopefully means chronic care management and not having to see patients as often. But ultimately, it comes down to a fee-for-service model in so many ways, where if I see 30 patients in a day, I’m probably going to come out ahead compared to seeing 15.
So, that’s where we’ve seen so many improvements in value-based care—metrics and those sorts of things—but it hasn’t quite caught up with fee-for-service in terms of potential reimbursement. Those are the things we try to balance. We don’t want to sacrifice our patients’ care for the sake of numbers, so we’re never going to stack our providers’ schedules with 30 patients. We just have to make a decision about how many patients we can see and take care of well.
When do we open our practice to new patients? Which payers do we feel like we need to attract more of? And it changes. We know we need to have a certain number of Medicaid patients so that we can maximize those value-based care contracts. We need to have a certain number of Medicare patients so we can maximize those contracts. There are a lot of discussions. We meet as an ownership group once a month and then every three months for a bigger meeting, and once a year for a strategy-type meeting. We decide whether we take more patients or not, whether we pursue a new program, if it’s something we think we can do and that will benefit our business and improve the patient experience.
It’s a lot of on-the-fly decision-making, and we do some financial modeling to make sure that if we add a new service, it’s ultimately going to improve the experience for our patients and help our business. We have three owners, and those aren’t always easy discussions. I love change; I love to try new things. But I have partners who are sometimes more realistic and hold me back, saying maybe now isn’t the perfect time. It’s good to have balance; as much as sometimes you can struggle with divided decision-making, ultimately I think we end up in a pretty good spot.
Kevin Pho: You mentioned that when choosing a health plan for your employees, there was one where the out-of-pocket maximum for families was 15,000. So, what kind of choices do you have? Is that the only choice you have as you decide what kind of health plan best fits your financial model and what’s best for your employees?
Tony Gerk: It’s a really interesting and unique part of the state where we live. We’re so isolated from the big cities along the Front Range of Colorado—Fort Collins, Boulder, Denver, Colorado Springs—and it’s expensive to get care here. If someone walks into the emergency room across the street having a STEMI, they’re going to be on a helicopter in 10 minutes, getting to a cath lab. Care is expensive, and because of that, we have one option for private health insurance here.
We’ve had a few folks—business owners out there might be familiar—who approach us saying they can take over our benefits, offer more choices, and decrease costs. We’ve met with a few of them, but when they actually start running numbers, their jaws drop. They say, “Wow, you have one insurance company available out there,” and we say yes, and that’s really the issue. I don’t know the exact answer—there’s a lot that goes into it with state laws, federal laws, and why we see so few options here—but that is the biggest problem we have.
We try to pay our employees really well and offer them jobs that give them security, so our employees don’t qualify for subsidies. When we’ve tried to send them to our state or federal insurance plan, unfortunately, they don’t qualify for subsidies that would bring down rates in a meaningful way. That’s been the struggle. We’ve even discussed whether we should offer health insurance at all anymore—should we just stipend our employees? But it feels wrong to me. It feels wrong to say we’re providing health care to our community, often through private insurance, yet we’re not going to offer that to our employees.
So, it’s always been an option, but I feel we’d be leaving our employees worse off than they are now. I wish we could unwind health insurance from employers. It was a crazy decision so many years ago to tie those two things together because it has insulated folks from the true cost of medicine—they just don’t see how much money goes into their health insurance. But that’s not going to happen anytime soon. Ultimately, my goal is to talk about what we’re doing in primary care, particularly in private practice—yes, the struggles we’re having, but also how successful we can be moving forward.
Kevin Pho: Practicing primary care in a rural area is hard enough, but it also sounds like you have to manage the financial aspects and keep this small business afloat—making sure the lights are on and the doors stay open. As a busy rural family physician, how do you juggle both challenges?
Tony Gerk: Sometimes it’s just that the biggest fire gets put out on some days, but I’ve tried to adjust my schedule so that I have time dedicated to administrative work and time dedicated to clinical work. It doesn’t always work—medicine is messy, and questions about patients intrude on my administrative time. But I’m lucky to work with a really great team. We hired a physician who also grew up in our community a year and a half ago. She’s fantastic, and that allowed me to pull back just a little bit on the clinical side. I see patients full time three days a week, expanding my hours on those days to keep seeing the same number of patients. Then, luckily, I have Tuesday and Thursday afternoons to work on administrative things and figure out which decisions I can make alone and which need the bigger group.
Kevin Pho: As I mentioned earlier, the number of physicians going into private practice is slowly going down. For those doctors listening to us on this podcast, what kind of questions should they ask themselves to see whether a private practice life is right for them versus going into a more employed model?
Tony Gerk: I just value physician autonomy so much. For me, that’s ultimately what drives me: my ability to make decisions not just for myself, but for my patients. That’s what has kept me away from the temptations of employment, being bought out, or working for a large group. When we have a med student here—he’s on a longitudinal rotation, came in October, and will leave in July—I talk to him about his practice decision-making and which specialty he might go into. The main thing I really want people to think about is whether they’re happy having someone make decisions for them, or if they’re the kind of person who wants to be making those decisions themselves. There’s no right answer; it’s absolutely personality-driven.
We had a physician who worked for us for a couple of years—fantastic doctor, still a great friend—but he didn’t like the business side of it. He didn’t like thinking about hiring and firing or making decisions about how to allocate money. Ultimately, he went back to an employed position, which is great for him.
The hard part is the financial side. I’m flabbergasted by the size of loans physicians have now when they come out of medical school and residency. When I had 185,000 in loans in the mid-2000s, I was worried, but now physicians have two or three times that amount. How do they pay that off if they have to take a pay cut to work in private practice?
But you have to find happiness and fulfillment as well. When I talked to the physician who joined us a year and a half ago, I was concerned because I knew she had a lot of loans. I knew that was a concern for her, and I didn’t know if she’d come to work for us. Ultimately, when she saw how we practice—she saw how happy we were (not that we’re skipping down the hallway every moment of every day), but we have a great work environment, a fantastic team, and we’re hopefully changing things for the better—that drove her to come and work for us. I hope she’ll be an owner here soon.
So it really is a matter of soul-searching for medical students and residents—where do they find fulfillment and happiness, and what drives them? Hopefully that drives more folks into the private practice world.
Kevin Pho: How about a medium-term or longer-term view in terms of the viability of a private practice primary care model in rural America? How financially viable do you think this is going forward?
Tony Gerk: I’m very bullish. We’ve got our struggles from time to time—month to month, year to year—and I always fall back on the fact that we’re taking such good care of our patients. They love us; they’re our greatest advocates. So often in this new value-based care world, we’re tasked with bringing down the cost of medicine, which seems unfair, but ultimately, we’re the ones who can do it because we’re good at it. We can handle complex problems, solve them, and figure out when patients need interventions and when they don’t.
My hope is that at some point, when we come to a crossroads in medicine—when things are worse than they are now—that we’ll recognize the only true transformation we’re going to have is by elevating primary care. I also recognize that it’s difficult because we’re almost dealing with the counterfactual. It’s easy to quantify the patient who gets a stent: They come into the ER, get a helicopter ride, a cath lab, an overnight stay, into the cardiology world—that quality is easy to measure all the way down the line. If I had prevented that stent in the first place through 20 years of lifestyle interventions, blood pressure control, prevention of diabetes, how do you quantify that?
I think we need to not just blindly reward all primary care doctors. Finding the really high-performing practices, talking about best practices, how to engage patients, and how to help them make real changes—those are the things we need to show payers, to show that long-term investment in primary care is ultimately what’s going to save us.
Kevin Pho: We’re talking to Tony Gerk. He’s a family physician. Today’s KevinMD article is “Even medical practices aren’t immune from the high cost of employer-provided health insurance.” Tony, let’s end with some take-home messages you want to leave with the KevinMD audience.
Tony Gerk: I love to learn about other practices. I love to learn what they’re doing. I’m just fascinated by how good small private practices are at adapting and changing. That’s really what drives me day to day. I hope there are other physicians out there who feel the same, and if they’re motivated, they can contact me so we can talk about things going forward.
As we said, it often seems impossible to solve the problems in medicine. We talked about private practice and how it’s struggling, but ultimately, when that crossroad comes, physicians need to be ready to rise up and fight for what we know is right—because we can drive better and healthier lives, not just for ourselves and our employees, but for our communities. When we elevate communities, we’re solving a lot of problems. I hope folks realize they need to tell their story to everyone, not just complain, but say the truth and talk about how problems can be solved, so people realize the fight we’re in and hopefully take our side.
Kevin Pho: Tony, thank you so much for sharing your perspective and insight, and thanks again for coming on the show.
