Most practitioners make the decision to stay in-network with insurance by default. Not because they’ve run the numbers. Not because they’ve compared models. But because it’s what they were told to do, it’s what everyone else seems to do, and the alternative feels risky.

This post is not an argument for burning your insurance contracts tomorrow. It’s an invitation to actually look at the math, possibly for the first time, and decide based on evidence rather than fear.

What the Insurance Model Actually Pays

Medicare physician payment, adjusted for inflation in practice costs, declined 33% from 2001 to 2025 according to data compiled by the American Medical Association. Physicians are the only provider type in the Medicare system without an automatic inflationary update. Every other category of healthcare spending is indexed to inflation. Physician reimbursement is not.

The trajectory has not held steady. The Medicare Physician Fee Schedule conversion factor was cut by 3.4% in 2024, then cut again by 2.83% in 2025. That is the fifth consecutive year of reductions. Private insurance rates generally follow Medicare’s lead.

The Milbank Memorial Fund’s 2025 Primary Care Scorecard reported that in 2022, average per-visit revenue for primary care was $259, compared to $1,092 for gastroenterology. This is not a gap in clinical value. It is a structural consequence of how the fee schedule rewards procedures over cognitive, relationship-based care.

This is the baseline. The floor that practitioners in insurance-based models are working from.

What Nobody Puts on the Revenue Slide

Gross reimbursement per visit is not the same as revenue per visit. Between the two sits a layer of costs most practice owners significantly underestimate.

A time-driven activity-based costing study published in JAMA found that the administrative cost of billing and insurance-related activities for a single primary care visit was approximately $20, representing roughly 14.5% of the revenue generated by that visit. That cost does not include physician time spent on documentation, prior authorizations, coding compliance, or EHR data entry.

Research on physician time allocation in ambulatory practice has found that physicians spend nearly twice as much time on desk work as they do in direct clinical contact with patients. That time is administrative infrastructure. It is not billable. And it is not counted when someone shows a per-visit revenue figure.

The actual financial picture of an insurance-based practice also includes:

• Billing and coding staff
• Insurance credentialing and contract management
• EHR and documentation overhead
• Denial management and appeals
• Non-billable physician time spent on administrative tasks

What remains after overhead in a typical primary care insurance-based practice is far thinner than the gross revenue number suggests.

What the Cash-Pay Model Actually Looks Like

A cash-pay or direct-pay longevity practice runs on fundamentally different math.

In a direct primary care model, monthly membership fees typically range from $50 to $100 per patient, covering a panel of approximately 413 patients, according to AAFP data from 2024. At those rates, a fully built panel generates $20,000 to $40,000 in monthly recurring revenue with no insurance billing infrastructure.

A functional or longevity-focused cash-pay practice is not constrained by DPC pricing. A high-ticket longevity program priced at $5,000 to $10,000 per patient requires 20 to 40 active program patients to generate $100,000 to $400,000 in annual program revenue, with no billing department, no denial management, no credentialing overhead, and no dependency on reimbursement rates that decline every year.

The operational difference is significant. Fewer patients. Deeper relationships. Predictable revenue. Lower administrative infrastructure. And the clinical depth to actually deliver the transformation the practitioner trained to provide.

The Real Risk Comparison

Fear of cash-pay models almost always centers on one question: what if patients won’t pay?

The honest answer is that patients seeking root-cause, longevity-focused care have, in most cases, already tried what insurance covers. They are not in the market for another $30 copay visit. They are in the market for someone who will actually solve the problem.

The real risk comparison is not cash-pay versus certainty. It is cash-pay versus a system that is structurally reducing reimbursement year over year while practice costs increase. In 2024, the cost of running a medical practice increased by 4.6% while the Medicare conversion factor was cut by 3.4%. That is an 8% compression in a single year, and it did not happen in isolation. It was the continuation of a two-decade trend.

A cash-pay model that requires 30 to 50 committed patients to generate sustainable revenue is not the riskier path compared to a system that requires 1,500 to 1,700 patients, enormous administrative overhead, and zero inflation protection.

What the Side-by-Side Actually Shows

When practitioners lay out these two models honestly, the comparison tends to surprise them.

Insurance-based, high-volume model:

• 1,500 to 1,700 patient panel
• 20 to 22 patients per day
• $150 to $259 average reimbursement per visit
• Significant administrative overhead and billing infrastructure
• Reimbursement declining in real terms every year
• Limited time per patient, limited depth of care

Cash-pay longevity model:

• 30 to 100 active program patients at any time
• Extended consultations with genuine clinical depth
• $3,000 to $10,000 per program per patient
• No billing infrastructure or insurance credentialing overhead
• Revenue set by the value of the care, not by a fee schedule
• Model improves over time as outcomes build reputation

The math is not close. The clinical experience is not close. The burnout profile is not close.

What This Actually Requires

Making this shift is not just a pricing decision. It requires learning how to attract, qualify, and retain the right patients. It requires building program structures that deliver genuine transformation. It requires a business framework that the insurance system never asked practitioners to develop.

That is the real conversation. Not whether the math favors the shift. The math clearly does. The real conversation is about building the skills, systems, and community that make the transition successful rather than stressful.

Those things exist. Practitioners who have made this shift have not done it by figuring it out alone. They built it inside an environment designed for exactly that transition.

The math was always there. It just needed to be shown.

References

1. American Medical Association. (2025). 2025 Medicare updates compared to inflation chart. https://www.ama-assn.org/system/files/2025-medicare-updates-inflation-chart.pdf
2. Jabbarpour, Y., Jetty, A., Byun, H., & Greiner, A. (2025). The health of US primary care: 2025 scorecard report. Milbank Memorial Fund. https://www.milbank.org/publications/the-health-of-us-primary-care-2025-scorecard-report-the-cost-of-neglect/
3. Tseng, P., Kaplan, R. S., Richman, B. D., Shah, M. A., & Schulman, K. A. (2018). Administrative costs associated with physician billing and insurance-related activities at an academic health care system. JAMA, 319(7), 691–697. https://doi.org/10.1001/jama.2017.19148
4. Centers for Medicare and Medicaid Services. (2024). Calendar year 2024 Medicare physician fee schedule final rule. https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2024-medicare-physician-fee-schedule-final-rule
5. American Academy of Family Physicians. (2024). Direct primary care model for family physicians. https://www.aafp.org/family-physician/practice-and-career/delivery-payment-models/direct-primary-care.html