Daniel Diaz was peeling an avocado recently and cut himself. Five stitches later, the hospital billed him $3,355.96.

Daniel's case is far from unique. Hospital charges are skyrocketing -- California Pacific Medical Center’s prices have doubled in the past 8 years. And although recent news has focused on insurance, costs and pricing models are proving to be one area of both concern and opportunity in the medical community.

High hospital costs are symptomatic of a system that isn't aligning care with costs. Finances are evermore opaque, bills don't seem to match the service provided, and patients -- not to mention providers -- seem frustrated and disillusioned. But true costs are not necessarily driving high prices. As the New York Times reports, "The main reason for high hospital costs in the United States, economists say, is fiscal, not medical." And it is hospital costs, not doctors' fees, that are the majority of the costs billed to patients.

So healthcare providers are often stuck in a system that doesn't make sense to patients, and doesn't prove rewarding (financially or medically) to the provider. It is in this context that some providers are exiting the system entirely, cutting ties to insurance and sometimes hospitals, and moving to a "concierge medicine" model. “When I decided to abandon insurance, I didn’t want to lose my patient base and make it unaffordable,” Dr. Stanford Owen, a physician who recently switched to the model, said. “I have everything from waitresses and shrimpers to international businessmen. It’s a concierge model, but it’s also the personal doctor model.” 

Concierge medicine is defined in this article as "a growing subset of medicine where patients pay doctors anywhere from $1,500 to $25,000 a year to receive personalized attention and care." It is a model that lets providers drive care, charges patients a truer cost for the care they receive, and may decrease costs overall. While concierge medicine is often associated with "white glove" treatment for the ultra-rich, the model is most basically a model in which doctors cultivate a direct care and payment relationship with patients, circumnavigating the insurance system.

In many ways, concierge medicine (especially in the humbler family doctor model) solves many of the problems we see in healthcare today. That said, it has its limitations, especially when it comes to specialists. “The vast majority of patients I see have very little money and are very, very sick,” Dr. Lahita, an autoimmune specialist, said. “It would be unconscionable for me to take cash. I’d limit my practice, and it wouldn’t be wise.”

We'll be exploring more about the concierge medicine model this month. It may not be the definitive answer to any of medicine's problems, but we certainly salute the brave physicians that are experimenting with a new model -- failures and successes included.

Concierge medicine makes medical collaboration crucial.  Get our guide: