Armchair Finance

Doctoring doesn’t pay like it used to. Especially primary-care doctoring.

That’s why many primary-care docs are exploring, and launching, business opportunities they’ve found outside the headaches and (relatively) low reimbursement of their private practices. It’s also a reason for some concern.

For some, relief has come by horning in on dermatologist territory. Jeffrey E. Epstein, an internist and primary-care practice owner in Cherry Hill, N.J., knew he wasn’t destined for riches in primary care. But he didn’t know the stress would be so bad. That’s when he came across an opportunity to start a cosmetic dermatology franchise with Scottsdale, Ariz.-based Dermacare Laser & Skin Clinics. Originally, he intended to incorporate botox and restylane treatments for wrinkles into his internal medicine practice, but the franchise worked much better in standalone locations in a luxury, boutique-style setting.

As the Dermacare experiment looked better and better, he cut back his time at his practice to 20 hours a week initially, then hired a doctor at his practice to replace him for a two-year sabbatical that increasingly looks permanent.

“I probably won’t be back,” Epstein says. But he didn’t take the decision lightly. He personally guaranteed a $1 million startup loan for an idea that started as a way of supplementing his practice internally to “earn a little extra money.”

Thanks to the pressures on primary-care physicians, it increasingly looks like Epstein is leaving a sinking ship. A 2006 report by the American College of Physicians pulls no punches when it claims that “primary care is on the verge of collapse.” The report goes on to say that few medical school graduates are going into primary care and that, like Epstein, “those already in practice are under such stress that they are looking for an exit strategy.”

Beyond that report, we don’t know that a stampede of primary-care docs is rushing to run health spas and perform cosmetic beauty treatments. But if such a scenario represents a fire, I smell smoke. We should worry that a system that places great demands on primary-care physicians to be the front door of the healthcare system is the same system that forces those physicians to look outside the core of their practice in order to make a living.

Epstein has big plans for his franchise. He has right of first refusal for franchises in the entire Delaware Valley, which includes parts of New Jersey, Pennsylvania, and Delaware, and plans to open his second clinic in Princeton by December.

“The kinds of docs who are looking into this are the ones who are tired of decreasing insurance reimbursement and increasing overhead due to skyrocketing malpractice premiums,” Epstein says.

OB-GYNs might be next.

—Philip Betbeze