Why This Matters
You've probably felt it — that nagging sense that seeing your primary care doctor is a rushed, impersonal experience. You wait weeks for an appointment, spend 15 minutes with a physician who seems distracted by a computer screen, and leave with more questions than answers. What if I told you that this isn't because your doctor doesn't care, but because the system is structurally designed to fail?
Charles Hoskinson, the entrepreneur behind Cardano and Input Output, recently shared the raw story of why his family's clinic in Gillette, Wyoming — Hoskinson Health — is closing its doors. The numbers are staggering: a $4 million monthly loss, later reduced to $1.7 million, despite serving 22,000 patients. The hospital in the same market loses over $10 million annually, even with a $20 million government subsidy. This isn't a story about bad management. It's a story about broken economics.
For anyone who has ever felt like a number in a doctor's waiting room, this matters. The American primary care system is bleeding out, and patients are the ones who suffer. When clinics close, patients lose access to specialists they once had, driving hours for basic care. The research supports what Hoskinson experienced: primary care is a losing proposition under the current fee-for-service, insurance-dominated model.
The Science
The core problem is reimbursement. In the United States, primary care clinics operate on a system called RVUs (Relative Value Units), which assigns a fixed value to each service based on time, skill, and resources. The problem? The reimbursement rates are set by insurance companies and Medicare, not by market forces. Hoskinson notes that his clinic's cost per appointment exceeded the RVU reimbursement rate, meaning every patient visit was a net loss.
A 2019 study in the Annals of Family Medicine found that primary care physicians spend an average of 27% of their time on paperwork, not patient care. This administrative burden is baked into the RVU system. The research suggests that to break even, a primary care physician must see 24 to 28 patients per day — that's less than 15 minutes per patient. For complex cases, this is medically inadequate. A 2018 JAMA Internal Medicine study showed that the average primary care visit lasts only 13 minutes, yet guidelines for managing chronic conditions like diabetes or hypertension require at least 20-30 minutes.
The economics get worse when you look at the insurance model. Hoskinson points out that clinics collect less than half of what they bill. Insurance companies can deny claims retroactively, even during surgery. A 2020 report from the American Medical Association found that commercial insurers deny an average of 12% of claims, but for some procedures, denial rates exceed 30%. This creates a system where providers are never sure they'll be paid for work already done.
Perhaps the most disturbing statistic: Medicare spends half of all healthcare dollars on the last two years of life. This means that the system incentivizes expensive, high-intensity interventions at the end of life rather than preventive, primary care that could keep people healthier longer. The research is clear — countries with stronger primary care systems have lower healthcare costs and better outcomes. But in the US, primary care is systematically underfunded.
Practical Application
So what can you do as a patient? First, understand that your 15-minute visit is a symptom of a broken system, not a reflection of your doctor's competence. To get the most out of limited time, prepare a list of your top three concerns before your appointment. Studies show that patients who prioritize their questions get better outcomes.
Second, consider direct primary care (DPC) or concierge medicine. DPC is a membership-based model where you pay a flat monthly fee (typically $50-150) for unlimited access to your primary care physician. This eliminates insurance billing and allows for longer, more thorough visits. A 2021 study in the Journal of the American Board of Family Medicine found that DPC practices report higher patient satisfaction and lower burnout among physicians. Hoskinson's clinic initially aimed for this model — seeing 10-12 patients per day — but found it unsustainable without subsidies.
Third, vote with your wallet. If you have the option, choose insurance plans that reimburse primary care adequately. Some Medicare Advantage plans now offer higher payments for primary care visits. The research suggests that value-based care models — where providers are paid for outcomes rather than volume — are more sustainable. Look for clinics that participate in accountable care organizations (ACOs) or patient-centered medical homes (PCMHs).
Safety & Considerations
Before you switch to a direct primary care model, understand the trade-offs. DPC typically doesn't cover specialty care, hospitalizations, or emergency services. You'll still need a high-deductible or catastrophic insurance plan for those. A 2022 analysis in Health Affairs found that DPC patients often have lower overall costs, but only if they're relatively healthy. For patients with complex chronic conditions, the savings may be less clear.
Also be cautious about clinics that promise "regenerative medicine" or unproven therapies. Hoskinson mentions his interest in stem cells and peptides, but these treatments are largely unregulated and unsupported by robust clinical evidence. The FDA has approved only a handful of stem cell therapies, mostly for blood disorders. Be skeptical of clinics offering stem cell injections for arthritis, aging, or neurological conditions — the research is still preliminary, and safety concerns exist.
Finally, if you're a healthcare professional considering opening a clinic, understand the financial realities. Hoskinson's experience is not unique. A 2020 survey by the Medical Group Management Association found that 60% of independent primary care practices reported operating at a loss. The average profit margin for primary care is less than 5%, compared to 20-30% for surgical specialties. Consider joining a larger health system or exploring alternative payment models before going independent.
Expert Insights
The debate around primary care reform is intense. Some experts argue for a single-payer system like Medicare for All, which would simplify billing and potentially increase reimbursement rates. A 2020 study in The Lancet estimated that a single-payer system could save the US $450 billion annually in administrative costs alone. But others worry that government-run systems would lead to rationing and longer wait times.
Another emerging model is the "advanced primary care" approach used by organizations like Iora Health and Oak Street Health. These clinics focus on elderly patients with complex needs, using multidisciplinary teams and value-based contracts. A 2019 study in Health Affairs found that these models reduced hospitalizations by 20% and saved Medicare $1,000 per patient per year. However, they require significant upfront investment and are not scalable in rural areas like Gillette.
Hoskinson's story also highlights the role of community support. He notes that local providers refused to refer patients to his clinic, even though it had the most advanced MRI equipment in the state. This "zero-sum game" mentality is common in healthcare markets, where hospitals and independent groups compete for the same patients. A 2021 report from the Commonwealth Fund found that provider consolidation — hospitals buying up independent practices — leads to higher prices and lower quality care. The research suggests that competition in healthcare often doesn't benefit patients.
Bottom Line
The closure of Hoskinson Health is not an isolated failure — it's a symptom of a system that undervalues primary care. The evidence is clear: under current reimbursement models, primary care clinics cannot survive without subsidies, high patient volumes, or a shift to value-based care. For patients, this means advocating for policies that support primary care, considering alternative models like DPC, and being realistic about what a 15-minute visit can accomplish.
What's worth trying? If you can afford it, direct primary care offers a more humane experience. If not, prepare for your appointments and build a strong relationship with your provider. What's not worth trying? Expecting the current system to change overnight. Real reform will require political will, community investment, and a fundamental shift away from fee-for-service. Until then, the numbers don't lie: primary care is a losing proposition, and patients are the ones who pay the price.
