Ear & Balance Institute with Dr. Gerard Gianoli

Dr. Tea  0:00  

Owners of a direct care practice are more likely to experience higher job satisfaction than the insurance based practice. And it's no wonder why direct care is independent of insurance. Patients pay the doctor directly for their expertise. The doctor gets full autonomy in how they care for patients and how they get paid. They have chosen this path with a love of medicine. This is the direct care way. 

Dr. Tea  0:24  

By listening to this podcast, you may even start to believe that you too can have a successful direct care practice. Come listen with an open mind as I share my personal journey and how I pivoted from an insurance based practice to direct care right in the middle of the pandemic. And the valuable lessons along the way. This podcast may be the very thing you need to revitalize your medical practice. I'm your host, owner of a direct care podiatry practice Dr. Tea Nguyen.

Dr. Tea  0:52  

I have Dr. Gerard Gianoli, who is an ENT specialist, who has a lot more years under his belt and ideas. So I felt this was appropriate to talk to somebody who's been working without insurance for longer than me, I've only done it for a couple years. But welcome to the show. Tell us how long have you been practicing without insurance and give us a little bit of a bio?

Dr. Gerard Gianoli  1:15  

Yeah, so I've been doing it longer than you and I also have a lot more gray hairs than you. But we actually have been completely third party free since 2005. So we're going on our 19th year. And I had a partner who practiced with me who passed away last year, who was with me through most of this ride, which has been a very interesting ride to say the least. I started in private ischemia. I started in academics, I was an associate professor at Tulane Medical School, and left to go into private practice and went into private practice with my partner. We did just strictly Neurotology. And skull base surgery, with a heavy emphasis toward patients with vertigo and dizziness. 

Dr. Gerard Gianoli  2:12  

In 2001, is when we made our kind of our first move toward going third party free. And at that time, Medicare was getting very aggressive in auditing physicians' practices. And this is a little bit before your time, but there were some huge fines. I want to say University of Pennsylvania was one of the first to get hit with it. They were hit with like a $50 million fine for over billing situations. And so in 2001, we got a letter from Medicare, or should I say my partner did saying, gee, you do a lot more ENG's than the average ENT physician. And the implication was you must be defrauding us. Now, of course, they didn't look at the fact that he did zero tonsillectomies. And he did you know, no flexible aaron goscuppies, etc.., those kinds of things. All they did was Hone on honing in on what he did more. And of course, an ENG is is like your workhorse task for evaluating patients with vertigo and dizziness, which is the bulk of our practice, at the St. So the implication was, are we the next in line to get audited and back then what an audit was, they would look at 10, maybe 15 of your charts, and figure out, okay, so on four of these, you know, you build something that we think should have been less, and they would multiply that by the number of Medicare patients in your practice, and from that come up with this huge fine. And the whole deal is, you really couldn't fight it, you had to pay it off, because otherwise they were going to press things and it could even put you in jail even. So that was one letter we got the other letter we got was they were going to reduce the reimbursement of ENG at the time, and for our practice, it would reduce the reimbursement to less than what it cost us to actually do the test. So it wouldn't make a whole lot of sense. You couldn't quote unquote, make it up on volume, you'd have to either shrink the candy bar, you know, do a little shrink inflation, you know, which is what basically most of my colleagues did, they just did less the bare minimum to be able to afford to apply the CPT code. The other options were to just stop doing it, which for a practice that does vertigo, which was not possible for us. And then the third was to get off of Medicare and just charge a reasonable price. And that's what we did. And so We got off of Medicare, and in 2001, my partner did a quick analysis of his practice. He's like, Well, you know, a third of my practice is Medicare, but it's only 10% of my revenue. And his thought process was, I'll be happy to work a third last and make 10% less. That's, that's a good trade off. In my mind, I looked at my practice, and my practice was just, you know, single digits, Medicare, I had a much younger patient population at the time. So to me, it was insignificant, like sure, let's do it. And what we found was the following year, our revenue actually went up. And the reason it went up was because those spots where we had gotten rid of the Medicare payments were filled up by other insurance patients, as well as Medicare patients who would just pay cash to see us. And then from that point, till 2005, we started just slicing off each of the insurance companies. And the last was in 2005. 

Dr. Gerard Gianoli  6:09  

The last one was Blue Cross, which was the biggest one. And so in 2005, we were, our revenue was about 60% from cash pay patients and 40% from Blue Cross. However, the workload was the complete opposite it was 60% of the workload was Blue Cross and 40% of the workload was the cash pay patients. So when we stopped taking Blue Cross, we actually saw a reduction in revenue for about two years before things picked up again. And a lot of it was just because of the type of referrals we had the the, that we were a tertiary referral practice and dependent on the referring from ENT doctors, neurologists, primary care, etc. And initially, it was they would refer the patients to us, but then the patients would find out oh, he's not taking my insurance. So they'd call back and yell at the referring physician to say, What are you doing, send me this guy that doesn't take my insurance. So the referral sources basically kind of dried up. And what brought us back into that was the patient eventually figured out, we offered a product that you can't get anywhere else. Because when it comes to vertigo, and dizziness, it pays so poorly that my colleagues basically don't don't want to provide those services, or they, they basically pay lip service to treatment of vertigo and dizziness patients. To give you an idea how bad it is, I wrote a chapter for a textbook. A few years back, a colleague of mine edited this textbook was strictly a textbook on how to treat vertigo. And I wrote a chapter for him. And after the books are out, I'm at a meeting and I'm with him and two other guys that had also written chapters and we're sitting around talking at lunch in the middle of this meeting. And each of the three start talking about how they avoid taking care of dizzy patients. Now this is the guy that wrote the editor of the textbook and two other off and their chart and they're talking about how do you avoid getting to take care of dizzy patients and it's partly it's because they take up a lot of time, you get paid very poorly for your time and there If you look strictly from a business standpoint, they're better off doing cochlear implant and chronic ear surgery, because there's more remuneration for their time and effort expended there. And so consequently, there's only about 303, or 50, board certified neurologists in the country. But I'm one of about a dozen that actually like to take care of dizzy patients. You know, and I will dare say, there's no other place where you'll get as full of an evaluation as my office, simply because the other guys can't afford to do it. Because if they do it, they you know, they're gonna lose money, or they're in a big system like, like Hopkins or Mayo, where they basically, you know, restrict their access to those type of tests, because the accountants know you're gonna lose money every time you do have ENG or posturography, or whatever.

Dr. Tea  9:30  

There's so much that you have just uncovered here I don't want to rehash because you were in a situation where a direct care practice was not popular. So there wasn't really a framework to even start with so you but you just knew if you kept taking Medicare, that it wouldn't be a business because it's charity work. You're getting reimbursed less than what the cost of the service actually was. So we know that mathematically that's never going to work. So you are in a position to either, like you said, do the bare minimum of work just to get paid, which, you know, poor quality work gets poor quality outcome, or opting out. So was that a hard decision? Or was that kind of for you? It was very objective, it was just a numbers game, you knew you had to do it. How did you feel when you said, it's time to let go of Medicare? 

Dr. Gerard Gianoli  10:19  

Well, there's a number of things that went through my mind. First of all, you know, my partner, I had discussed this at length for several years. And, you know, we made some predictions and these predictions basically came true. And it was, number one, doctors are either going to go to a cash based practice, like we've done, or they're going to retire, or they're going to become employees. And that has happened, basically, the older guys got pushed out pretty quickly. The younger guys became employees. And there's a middle group that are, you know, going pursuing things like you and I have done, which is the cash based practice. Now, as far as actually pulling the trigger, it was a little, a little scary at the time, you know, because you wonder if art is the practice going to just completely implode, but I had a number of different advantages going in my favor. Number one, and my partner was in the same situation, he was 18 years my senior, so he was more well established. One, we were both financially very stable, had zero debt. You know, so, and I had enough money squirreled away that if I brought in zero income, our prac, our, my family's lifestyle would not change one iota, you know, so I kind of put in my mind, okay, I'm not gonna depend on income for two years. Second big advantage I had was my wife, my wife's a gynecologist, and she brings in a nice income. So, you know, worst case scenario, we could live off of her income. And then third, you know, if it all falls to pieces, I can always go back and start accepting the insurance and I can be instantly busy in a matter of months. So, you know, I kind of girded myself with those thoughts going on. And as it turned out, I never had to dip into the reserve cash, our lifestyle didn't change. And then, you know, within about four years, we were making significantly more revenue than we were when we dropped the insurance.

Dr. Tea  12:37  

When you opted out of insurance, did you ever have a sense of regret? Or did you ever have to hop back on to insurance? 

Dr. Gerard Gianoli  12:45  

No, never turned back. Yeah. And I never would just because I know of all the hassles associated with it, I feel bad for some patients that are, you know, very much dependent on their insurance. But the advantage is, I can refer them to other doctors that will happily take their insurance. You know, so it's not like I have a corner on the market. But I do have a corner on my market, if you would.

Dr. Tea  13:15  

So you just talked about having financial security, which is something that a lot of us are just discovering is important, myself included, because I came from a place where I had to make the money. So whatever money I had in my savings was what was going to help me build my practice. And I took out a business loan as well. And of course, we had a $250,000 debt to go to medical school, and I married into medicine, so half a million debt in our household. So money, financial literacy was not exactly the thing that we were very strong at. I mean, we were sensible. We never splurged beyond our means. But I think with the way that inflation is going, the cost of business going up, and then insurance, reimbursements are going down. We're having a lot of hits against us in this generation and trying to even conceive a practice that is insurance free, low costs and efficient. And so it's really hard to think that we have that we could do it, I think is all that I'm trying to say. Because life now, the cost of things is just so different from decades ago, the way we were trained, the way that our attendings were training us and I remember, I don't know if this was told to you in your training, but I was told that everybody is just going to be employed. So don't bother learning about billing codes. Don't those things always change, don't bother learning how to sell because, you know, talking about money is frowned upon. And then you come out and we're financially illiterate because no one's talking about money. How ridiculous is that? So, needless to say we were in a lot of debt. And it's really unnecessary to be like that to think in that way. And I feel like with you having a lot of years without insurance, it's really reassuring for somebody like me that's been out just a few years to see what's really possible. And for you saying that you had no regrets. And opting out is really reassuring as well. So what were the benefits you had with having patients pay you directly compared to working with insurance?

Dr. Gerard Gianoli  15:24  

Well, there's actually a number of benefits. Number one is you are beholden to the patient, not the insurance company there. So there's, you don't have any third party interfering with what your loyalties are towards some physicians are forced to do what the insurance companies want, because otherwise, they don't get paid. They can't proceed with the next step, if you would. But probably the most significant benefit, I think, from being a third party free or cash base, is it just a whole lot more fun? You know, I know. And I know, it's funny, but you know, there's so many hassles that go into dealing with patients through the third party payer system, that it just makes it onerous. And one of the things that you'll notice is one, you have more time, you can spend as much time as you want with a patient. And my patients, I spend a lot of time with them. My shortest impatient asked me in office visit is 30 minutes. That's my shortest one. I do some television sets that are just kind of med checks that are only 15 minutes. But that's, you know, not the routine in my office, a new patient visit is an hour long. And you'll visit at least a half hour long. And so I get to know my patients a lot better than my colleagues do, just because I spent so much more time with them, which is a huge benefit, both from the standpoint of being able to deliver better medical care, but also they become real people to you. I mean, I know about their kids and their their concern about their husband and this and that the other thing that they become like family, and I've had patients, you know, say, oh my gosh, this is when I go to Dr. Gianoli's office, it's like going to visit family. And because there's no when you call the office, there's no telephone tree answering system. It's a live person that answers and it's it's Lisa, who remembers and even knows who the patient is just by the sound of their voice. So that's the kind of practice I have . Although it's a draw from a huge area from far distances, we get to know our patients very well to the point where it's almost like a small country town family practice.

Dr. Tea  17:54  

Do you do any marketing at all? 

Dr. Gerard Gianoli  17:56  

No. We, you know, it's interesting, when our revenue started declining after the first couple years, we did some advertising, just to let people know, hey, we're still here. And that seemed to bring things up a little bit. And you know, after about two years of that we stopped. And other than having a website, we really have no advertisement. 

Dr. Tea  18:19  

So you've been direct care, third party free for 19 years. And you've not been marketing. That's incredible. So there, there comes a point where it's just self fulfills itself, because the patients you've treated and

Dr. Tea  18:37  

write, I get referrals, most of my referrals are probably from other patients. But I also have a cadre of referring physicians that send them referrals as well, where they you know, they'll tell them yeah, you can go to see your auntie that's on your insurance panel, but they're not going to fix it if you want to get fixed. Go see Dr. G, and Ollie. And usually it's like after they've been dealing with this for four or five years or so then they're like, Okay, let him cut my head off of it. I just want this nightmare to be over. 

Dr. Tea  19:13  

That's so funny. That's incredible. So you're like passively marketing, you're nice and likeable. Right? 

Dr. Tea  19:23  

Well, that's beautiful. So you're in a position to have a niche that people were willing to pay for because you knew that the market wasn't really providing that level of care. Do you think that there are specialties that maybe direct care wouldn't work so well? Or do you know doctors who went into direct care but had to go back to insurance?

Dr. Gerard Gianoli  19:41  

Yeah, absolutely. So in my practice itself, there are parts of it. That doesn't make any sense for cash, for example, a chronic ear surgery or for that matter, cochlear implants as well. I I enjoyed doing cochlear implants. It's great to make someone deaf to be able to hear again, it's in Frankly, it's a relatively easy surgery from my standpoint. But, you know, why should someone pay to have me do the cochlear implant versus go to the guy down the street where it's essentially free on their insurance. And, you know, it's not like it's going to work any better with me putting in versus them putting it in. So consequently, about No, I probably about seven or eight years ago stopped doing cochlear implants, because it just didn't make any sense. From a business standpoint, we did. So few of them kind of the same thing with chronic ear surgery, cholesteatoma, those kinds of things. First of all, the patients are not motivated a whole lot to get that taken care of. And if you know, on top of that, you mean, I have to actually pay this guy to take care of it. You know, and I still do the occasional chronic ear surgery, but it's usually in one of my long term patients, that I'll do that for them. Which brings me to another benefit of the cash based practice. And that is that you get a lot better compliance. Patients don't come to you, if and pay for your services, and then completely ignore your advice. You know, that's pretty darn rare. And if they do, they're not going to come back to you. I think, you know, the, the, the flip side of the question you just asked me is what are certain aspects of medicine that lend themselves better to cash based practice. And I think anything like what I do makes a lot of sense. You know, anything that gets paid really poorly, where the outcomes are kind of not so great in general medicine, those are two aspects of things physicians are not going to do. And if someone wants to specialize in those things, I think they would do great. And I remember a great example, I was talking with a gastroenterologist, who was going to do a third party free practice and his focus was going to be irritable bowel syndrome is one of these disorders where you know, a lot of the gastroenterologists get patients, there's a ton of them out there, none of them really want to take care of them. The treatments are not that great. So if you've got someone who focuses on that, and looks and gets even just 10% better success rate with him, he's gonna be flooded with patients. 

Dr. Tea  22:32  

Do you think doctors are choosing these difficult problems or choosing not to do them because of reimbursement rates?

Dr. Gerard Gianoli  22:41  

I think that's part of it. And I think the other part is because of the poor outcomes, you know, I mean, you think about it, if you treat something all the time, and you never get a very good outcome, you're gonna be odd, or maybe go to see somebody else for that. 

Dr. Tea  22:55  

Right

Dr. Gerard Gianoli  22:55  

It's just kind of a natural reaction, I think. (Yeah) I know, there are neurologists. And where the specialists post deal with vertigo and dizziness. There are narratologists, where they have instructed their staff that if someone calls and says they're coming to see me for dizziness or vertigo, tell them, we don't see that. And that's our specialty. You know, it's, it's crazy

Dr. Tea  23:20  

You gave yourself an opportunity to make money because you do it, you're doing what others don't want to do. 

Dr. Gerard Gianoli  23:26  

Right. My partner used to say we're the garbage man, we take out the trash that other people don't want to take care of.

Dr. Tea  23:34  

That's a terrible way to say it. But yes. So same thing, my practice as well, Pete, the things that I do, you know, corporate doesn't want to have anything to do with and it's a, it's a symbiotic relationship, because I can send them things that I don't want to do vice versa. So it's not like we're really holding much in the way of competition in the market. We're just fulfilling a need that has always been there. I think that's what makes it so fun is that we are actually fulfilled because we get to do what we want to do. 

Dr. Gerard Gianoli  24:00  

Absolutely. You know, and getting back to what you said about the younger generation, I have to admit, I look at those numbers of how much debt you guys have. And I just feel so bad for you guys 

Dr. Tea  24:11  

Were miserable.

Dr. Gerard Gianoli  24:13  

You know, it's just in, you know, in the 200,000 plus debt. I mean, that's typical now, I mean, it's not even, you know, one of these outliers, which is a huge part of what pushes people into, I think, employment situations. 

Dr. Tea  24:31  

Definitely and, you know, I've talked to many doctors, and if you're financially balanced, you truly don't have a choice. And it's unfortunate, but I also remember you saying that when you did opt out of insurance, you eventually made more than when you were with insurance. 

Dr. Gerard Gianoli  24:48  

Oh, so yeah, 

Dr. Tea  24:50  

I mean, if you just look at the end of the road, you can still actually make more by not working with insurance and that is there for us as well for podiatrists and other specialties to do 

Dr. Gerard Gianoli  25:00  

Yeah, I think one of the things I would tell physicians contemplating third party free medicine is that it will take longer to build up a stable practice than it would if you take on the insurance route. You know, if you accept all the insurances, you'll be busy in three to six months. If you go the cash route, it's going to take a few years, but at the same time, once you develop that, it'll be a much more stable practice. And then if you're on the insurance plans, because you think about if you're on the insurance plan, let's say 40% of your revenue is coming from Blue Cross, and then blue cross cut you off their panel, you're in deep doo doo. At that point, whereas, you know, with individual patients, that's not going to happen.

Dr. Tea  25:51  

That's a really good point, I think I was very naive to believe that I could do it faster. Because you know, I live in Silicon Valley, and everything is high tech, and everything's super fast. And I was not willing to accept that. This took time. But it's now that I'm, I've celebrated my second Christmas without insurance. And I feel I feel steady, like, I never have to look back and say, did insurance pay me? Or am I going to get audited? Or what is that code to that thing? Again, you know, I never have those conversations that took up space in my brain. But every time I look at my schedule, I am guaranteed that everybody will be happily paying. And that feels so good. It's so restorative to be valued.

Dr. Gerard Gianoli  26:33  

If you've made it to yours, and you're doing fine, you're just gonna get busier and busier, you're gonna do great. Absolutely.

Dr. Tea  26:42  

I always need to hear that. 

Dr. Gerard Gianoli  26:45  

My wife's a gynecologist, and she stopped doing surgery, major surgery with the birth of our last child. So by the time I was doing this, she was just doing basically an office practice. And she would say, Oh, that's really great. You can do that, Hon. But I, there's no way I could do that. Because you're so specialized. You could like, there's no way you could do it better than me. And so finally, after about seven or eight years, I convinced her to go third party freight. And she was like, instantly, I mean, she was the very next year, she was making the same amount of money, but she was seeing a whole lot less patients. And now she's seeing as many or more patients and she's making a whole lot more money. And she's booked up. And this is an interesting thing. She is booked up for new patients a year from now. 

Dr. Tea  27:39  

Oh, my God. 

Dr. Gerard Gianoli  27:40  

Yeah. And I tell her, you know, honey, this, this is great for your ego, but it's bad business. You're booked up a year from now, it means you're charged, you're not charging enough money. You want to get that scheduled down to maybe a two month wait, that's, that's plenty, you know, because all you really need to be is booked tomorrow. That's all you need. Anything else, that's ego.

Dr. Tea  28:06  

That's a really good point. charge more definitely. Again, we don't have these money conversations. So it's all very awkward for us. Until it's a necessity. 

Dr. Gerard Gianoli  28:17  

Well, the way we set up her practice was really quite easy. We just said, Okay, how much money do you want to make? We figured that out. Then we said, Okay, how much is your overhead, added that to the amount of money she wanted to make. And then we looked at the number of hours she was working and figured out how much revenue she needs to bring in per hour. And that was the charge for the patient. And she split up the 15 minute increments. And it worked out perfectly.

Dr. Tea  28:47  

So she is charging as an OB GYN, or

Dr. Gerard Gianoli  28:51  

Well, she just does office gynecology at this point. 

Dr. Tea  28:54  

Okay. She is charging just basically by the time then. Right? That's so simple math. I'm really, I'm all about simple things, simplifying my life. Because the question comes up is how do you charge for procedures? How do you know? And I always say, just quadruple, whatever Medicare doesn't pay, you know, you just pick a number and you go with it? 

Dr. Gerard Gianoli  29:15  

Well, you know, it's interesting, our surgical pricing. When we dropped insurance, we had to completely redo all of our pricing. And I went up to the Office of visits because I thought we were under charging for that and significantly reduced the charges for surgery. Because you know, we would never get paid the register price for surgery, we'd get paid some fraction of it. And so, you know, we still charge more than like BlueCross or Medicare would ever pay us, but a lot less than the, the registered price for example, if the registered price was $5,000 in Bluecross would routinely pay, you know, 12 -1,500 and Medicare might pay 1000. Well, we charge like 2500. And that was very reasonable from the patient standpoint. And it was, you know, more than double what we're getting from Medicare, you know, so the thought process was I do one of these, it's like taking care of two Medicare patients. Actually, I think, I think whenever we failed, it turned out to be about three. So it made a lot of sense. And, of course, things have changed since then. The other big advantage from and I know, you know, this third party free is that, you know, you can change your prices tomorrow, you don't have to convene a committee and wait for the blessings of Blue Cross or what have you. You know, I'm thinking about all the inflation we've had the last couple of years. And back in the days before insurance contracts, when the cost of doing business went up, 10%, the doctors just raised their prices 10%. Well, you can't do that nowadays, because you're locked into Medicare rates and insurance rates. And so the only thing you could do is see more patients, or cut off your overhead some kind of way, which is going to be really challenging, given how things have gotten so streamlined and medical practice as it is, but for me and you, it's like, okay, when inflation is up, 10% we'll raise our prices 10%

Dr. Tea  31:38  

Well, there you have it, you all received a master class session on how to start your direct care. Practice, you no longer need to listen to the rest of my podcast. That's just kidding. You really cramped it all in there. So have a niche, do what others aren't doing. Price it appropriately so that you make a profit and then you just keep going. So what's the future look like for you in your practice? 

Dr. Gerard Gianoli  32:00  

Yeah, I know, it's funny, a lot of my colleagues are talking about retirement. I just don't ever think I'm gonna retire because I'm having too much fun.

Dr. Tea  32:11  

You're gonna be there for the last days.

Dr. Gerard Gianoli  32:14  

Yes, ma'am. Yes, ma'am. That's wonderful.

Dr. Tea  32:17  

That's how it should be. We should love our jobs so much that we don't want to leave it.

Dr. Gerard Gianoli  32:22  

You've got it. You've got it. 

Dr. Tea  32:24  

Well, thanks so much for your time. I look forward to meeting you in real life. I hope that we cross paths again, because I know that you and I are deeply passionate about letting other doctors know about this way of medicine. You call it third party free. I call it direct care, whatever you want to call it. It's freedom on the other side. Thank you so much. 

Dr. Gerard Gianoli  32:42  

Absolutely and if you're ever in the New Orleans area, come look me up. 

Dr. Tea  32:47  

Oh, yes, I shall. I shall do you.

Dr. Tea  32:51  

Thank you so much for being here with me. If you enjoyed this episode and want to hear more, please like, share and subscribe. So more people like you can have access to another way of practicing medicine, that direct care way. Let's connect find my info in the show notes and send me your questions. That might be the topic for future episodes. 

Dr. Tea  33:10  

And lastly, if you remember nothing else, remember this be the energy you want to attract. See you next time.