How Not to Make Money

Leaders of SCL Health will close St. Francis Hospital in Topeka soon but “it’s business-as-usual for the three primary care clinics it still owns in the state”. Sounds great, right?  The clinics serve the poor and people without insurance.  They say that patients pay a flat rate of $15 per visit.  You would think that means they run a very lean organization. The article goes on to say that “their tax filing shows a $59,000 loss in 2015, with about $1.99 million in expenses outstripping $1.93 million in revenues. Most of the revenues come from grants and donations.”  Initially, those kind of numbers struck me weird.  There’s more. “The Caritas Clinics have 21 full-time and eight part-time staff and 240 volunteers. In 2016, they served 1,855 patients.”  What?  Oh….I get it.  These clinics use government math!  Let me explain.  

As a comparison, I serve 600 patients in my Direct Primary Care clinic with 1.5 FTE (full time equivalents or staff). I use a normal capitalistic model.  I only spend what I can afford to spend.  If I spend more then I go bankrupt.  These clinics have figured out a way to MATCH their grants/donations that are coming in.  The more they get the more they spend.  How else would a clinic need 21 full-time and 8 part-time staff for 1855 patients?  You could say, “Doug, these patients are more needy than yours”.  I would need to see proof of that but for argument sake let’s say you are right.  Do they need a 29 staff to my 2.5?  That sounds improbable. The issue is that they can’t show a profit or else lose that free money coming in so they have to spend those funds somehow.  It’s backwards.  Welcome, my friends, to the government model of spending or what I call “how not to make money”.  


Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  2 comments for “How Not to Make Money

  1. Bill Ameen MD
    April 25, 2017 at 2:44 pm

    This reminds me of my year in the Indian Health Service in 1976. At the end of the fiscal year the Unit Director had to find things to buy with the allotted budget, otherwise it would be cut for the next FY. We needed to spend $10,000…so we picked an operating microscope which actually helped our visiting ENT PA because we saw so much chronic OM in kids. I used it exactly TWICE, as the only MD out there…to pick spitwads out of the same kid’s ear…TWICE.

  2. Thomas Guastavino
    April 25, 2017 at 7:47 am

    ‘An organization that tries to make itself look good by spending their own money is called a philanthropy. An organization that tries to make itself look good by spending other peoples money is called a government. “

Comments are closed.