As health care costs in the United States continue to rise and insurance reimbursements fail to keep up, many doctors are abandoning traditional insurance-based systems and returning to a model that looks more like medicine from a century ago: patients paying doctors directly.
These practices, commonly known as cash-based clinics or direct primary care, are growing quickly as both doctors and patients grow frustrated with high costs, complex billing systems and declining quality of care.
A Health Care System Under Pressure
For decades, the U.S. health care system has been under increasing strain. Insurance payments have not matched the rising cost of operating medical practices, forcing clinics and hospitals to cut visit times, increase patient loads and merge into large corporate systems.
As a result, patients face longer wait times, shorter appointments and reduced access to doctors, while physicians report record levels of burnout and job dissatisfaction.
Health care spending now consumes nearly one-fifth of the U.S. economy, a dramatic increase from earlier generations. Despite higher spending, patients often feel they receive less personal care than before.
How Insurance Changed Medicine
Health insurance expanded rapidly during the 20th century, especially after World War II and with the creation of Medicare and Medicaid. While insurance helped spread financial risk and increase access to care, it also changed how medical prices were set.
Instead of patients paying doctors directly, insurance companies became the primary payers. This reduced price transparency and weakened consumer pressure on costs. Over time, complex billing codes, reimbursement rules and administrative requirements grew.Today, medical practices employ far more administrative staff than doctors, and physicians spend large portions of their day documenting care rather than treating patients.
A Breaking Point for Two Doctors
In the late 1990s, anesthesiologist Dr. Keith Smith and his colleague Dr. Steven Lantier reached a breaking point while working in Oklahoma City. They saw patients being charged extremely high prices for routine procedures and felt complicit in a system that caused financial harm.Believing the system itself was the problem, they left their hospital jobs and opened a surgical center that charged clear, upfront prices for procedures — without involving insurance.Their goal was simple: treat patients fairly, medically and financially.
Returning to Direct Payment
Smith carefully calculated the true cost of surgeries, including staff time, supplies and facility expenses. He then set transparent prices and shared them openly — first by phone, later online.Many doubted the idea would work, claiming medical care was too complex to price clearly. Smith proved otherwise. Patients appreciated knowing costs upfront and often paid far less than they would have through insurance.Today, cash-based clinics have expanded beyond surgery into family medicine, cardiology and oncology. In family medicine alone, the share of doctors using this model has grown sharply in recent years.
Family Medicine Joins the Movement
Dr. Teresa Lovins, a family physician in Indiana, experienced similar frustrations after decades in traditional practice. She was required to see up to 28 patients a day, often spending less than 10 minutes with each.In 2020, she opened her own direct primary care clinic. Instead of insurance, patients pay a monthly fee — usually between $30 and $100 — covering unlimited visits and most routine services.Without insurance billing, Lovins eliminated administrative staff, reduced drug and lab costs, and regained control over how she practices medicine.
Lower Costs, More Time
Cash-based clinics often offer significant savings. Routine lab tests that cost $40 or more through insurance can cost just a few dollars when paid directly. Medications purchased at wholesale prices are far cheaper than insured pharmacy rates.Most importantly, doctors spend more time with patients and focus on prevention rather than rushing through appointments.Patients report easier access, shorter wait times and stronger relationships with their doctors.
Who Uses Cash-Based Clinics?
Critics argue that cash-based care only benefits wealthy patients, but many clinics serve uninsured, Medicare and Medicaid patients. Some patients choose to pay monthly fees despite limited incomes because of improved access and affordability.With insurance premiums averaging tens of thousands of dollars per year for families, many Americans delay care due to copays and deductibles. Cash-based care often removes these barriers.
Not a Perfect Solution
While cash-based clinics improve care for those enrolled, they may reduce the number of patients each doctor serves, potentially worsening shortages elsewhere in the system.Experts note that more research is needed to understand the long-term effects on the broader health care workforce.
Rethinking Health Insurance
Some physicians envision a system where insurance works more like car insurance — covering major emergencies while routine care is paid directly.This approach relies on catastrophic health plans, which have low premiums and high deductibles. Recent policy changes allow patients to use health savings accounts for direct primary care memberships.Doctors like Smith argue that money currently spent on premiums could instead cover routine care and even major procedures at lower total cost.
A Growing Alternative
As insurance premiums continue to rise and access to care declines, cash-based clinics are becoming an appealing alternative for patients and doctors alike.Though not a complete fix, they represent a growing response to an insurance-driven system that many believe has become expensive, rushed and disconnected from patient needs.