Comparing Payment Models and Operating Costs in NYC Pediatric Clinics to Improve Financial Sustainability
Advisor: Dr. James
Internship Location: ABC Pediatrics
Onsite Mentor: Dr. Alexander Frenkel
Pediatric clinics struggle to stay financially sustainable in New York City. The way a clinic gets paid, whether through insurance, out-of-pocket payments, or membership models, shapes whether it can cover operating costs and continue serving patients. This project examines how these payment models affect pediatric practice sustainability in NYC.
I will conduct research primarily at a pediatric practice at 2634 Ocean Avenue in Brooklyn, where I have worked for two summers and have existing relationships with the doctors and billing staff. I will also interview pediatricians and billing companies at other NYC practices with different payment models.
My approach combines literature review with interviews. I will review peer-reviewed studies on healthcare payment models, then interview pediatricians and billing professionals to understand the financial pressures they face. I will analyze how insurance-based, out-of-pocket, and membership care models each affect a practice’s ability to manage expenses like rent, staffing, and supplies.
I expect membership or concierge care models to offer the most financial stability due to predictable monthly revenue and reduced administrative burden. However, each payment model is unique to the location and customer base it serves. This research will provide evidence about which payment models are most viable for different pediatric clinics based on their patient population and neighborhood.
Project Blog
Week 0: Introduction: Week 0 — Who I Am and Why This Project Matters to Me
Hi, my name is Gregory Shif and I'm a senior at BASIS Independent Brooklyn. For my Senior Project, I'll be studying how different payment models affect the financial sustainability of pediatric clinics in New York City (NYC), specifically examining insurance-based, out-of-pocket, and membership care models.
My research will focus on answering this question: How do three different payment models (insurance-based, out-of-pocket, and membership care) affect the financial sustainability of pediatric doctors' offices in NYC, and what are the main operating costs that these clinics have to manage to stay in business?
I've wanted to work in healthcare for a while now, but before diving deep into medicine, I wanted to understand how it actually works on the business side. That's what brought me to a pediatric doctor's office in Brighton Beach, Brooklyn, where I spent the past two summers working in the administrative side of the practice.
Those two summers changed how I think about healthcare. I watched doctors work incredibly hard to treat patients, while the practice struggled financially simply because insurance reimbursement rates didn't cover the costs of running the practice. I also saw how much time frustrated staff spent on phone calls with insurance companies trying to get paid. Those moments are what pushed me toward this topic.
What struck me most was realizing that medicine and finance are completely inseparable, as even the best doctors cannot run a successful office without the proper business model. You can be the best pediatrician in Brooklyn, but if your payment model doesn't work, you go out of business. Which results in hundreds without care. I watched how the doctors are forced to be business people whether they want to be or not. Physicians have to understand insurance contracts, they have to know their profit margins, they have to make decisions about which payment model keeps them afloat. It's not something they talk about in medical school, but it's the reality of running a practice.
ABC Pediatrics is not a new site to me since I have worked there for a long time. I know how it operates firsthand, which is exactly why I wanted to bring my project back there. But I'm not just staying at one location. I'll be working at different pediatric offices across NYC that have different payment models to get a real sense of how they work. I'll be interviewing pediatricians at multiple practices and also talking to billing companies that handle finances for some of these offices. Over the coming weeks, I'll be interviewing doctors and billing staff, reviewing literature, and working toward a final research paper with concrete findings. I hope you'll follow along.
To view my senior project proposal, it is linked below.
https://drive.google.com/file/d/1_aGD4uz_7TfZa5CuN_faTZ3N6K5IvwnB/view?usp=sharing
On-Site Location: 2634 Ocean Avenue, Brooklyn, NY. The practice does not have a website.
Mentor: Dr. Alexander Frenkel
Week 1: Deep Diving into Research and Securing Interviews
This week, I've been digging back into the research materials I'm going to be using for this project. I reread the article by Eskew and Klink (2015) on direct primary care practice distribution and costs across the nation, and it was super helpful as I started prepping for my interviews. Understanding more about how membership-based models actually work in real life really helped me develop questions to ask the doctors during the interviews. Some of the questions I'm planning to ask include: "What percentage of your revenue comes from each payment model?" "How much of your budget goes toward administrative costs?" and "Have you considered switching to a membership-based model, and if so, what's holding you back?"
And speaking of interviews, I'm excited to report that I've already locked in three interviews with pediatricians over the next few weeks. Two of the practices are in Brooklyn, and one is in Manhattan, which will give me a good range of perspectives based on different neighborhood demographics and costs. It's kind of wild seeing the project go from just a proposal to actually happening. Right now, I'm working on putting together solid interview questions, making sure I'm asking about both the financial and the operational challenges that are more difficult to report in published articles.
Keeping up with my hands-on work at my on-site placement has been extremely helpful. This week, I went back into the office and did some secretary work, which gave me another chance to see how the billing and administrative side actually works day to day. While I was there, I met with Dr. Frankel and we talked about the direction of the project and which payment models his practice currently uses.
I have found it a bit challenging to find doctors that specifically work with the membership care model, but I have reviewed articles from Health Affairs and the Journal of Primary Care & Community Health and reached out to several practices that seemed to use this model. I'm still waiting to hear back from these doctors.
Reading about administrative costs as percentages is one thing, but actually watching how the staff deals with insurance claims, scheduling, and patient care is totally different. Entering these interviews with both academic research and practical office experience will enable me to ask more insightful questions and fully understand the information being shared.
Works Cited:
Eskew, Philip M., and Kathleen Klink. "Direct Primary Care: Practice Distribution and Cost Across the Nation." Journal of the American Board of Family Medicine, vol. 28, no. 6, 2015, pp. 793-801. https://www.jabfm.org/content/28/6/793
Week 2: Lessons from Dr. Levi
This week I continued working at the practice, did more research, and conducted my first formal interview with Dr. Levi, who owns and operates three pediatric clinics in NYC.
Dr. Levi has been running her practice for 15 years across three locations with four doctors on staff. Here are the three biggest takeaways:
Medicaid dominance creates real financial pressure. Medicaid is a government insurance program that covers low-income patients, and it typically reimburses doctors at much lower rates than private insurance. About 80% of Dr. Levi's patients are on Medicaid, and she confirmed that these reimbursement rates heavily affect her bottom line. Since Medicaid pays significantly less than private insurance for the same services, practices like hers are doing the same work but bringing in way less money for it. With profit margins at around 15% on roughly $400,000 in annual revenue, there is not much room for error. Despite this, Dr. Levi has never once turned away a patient based on their insurance type.
NYC rent is a serious threat to independent practices. At $8,000 per location per month, rent is one of her biggest expenses, and Dr. Levi said that rising costs make it very hard to keep profit margins from shrinking. She ruled out Manhattan entirely, as it is financially unsustainable. This connects to a broader pattern City Limits recently reported -as commercial rents in Brooklyn have risen as much as 40% in a single year in some neighborhoods, small businesses across the city are being squeezed out (citylimits). Independent medical practices face the exact same pressure.
Serving the underserved is a deliberate choice. Dr. Levi speaks Russian, Georgian, English, and Spanish, and she intentionally opens her practices in neighborhoods where language barriers make quality care hard to access. Even though out-of-pocket patients would be more profitable for the practice, she has no interest in shifting away from Medicaid because she believes it is her responsibility to serve the people who need it most. Even knowing that hospital systems get reimbursed at rates five times higher than independent practices for the same services, she has no plans to abandon the communities she has spent 15 years building relationships with.
Next week I plan to continue analyzing sources and reaching out to billing companies for their perspectives.
Thanks for reading, see you in the next one!
Works cited
Roberts, B. (2026, March 11). How NYC’s Housing Crisis is Squeezing its Small Businesses - City Limits. City Limits. https://citylimits.org/how-nycs-housing-crisis-is-squeezing-its-small-businesses/
Week 3: Keeping the Momentum Going
This week was a bit slower in terms of research but still productive. I continued working at the pediatric practice in Brighton Beach, which has been giving me a ton of real world context that I honestly could not get from any academic article.
At the office this week, I got more hands-on experience with the administrative side of running a practice, specifically dealing with multiple insurance companies and understanding how the billing and claims process actually works in real time. It is one thing to read about how complicated insurance billing is in a study, it is a completely different thing to sit there and actually work through it. This week we had a patient with special needs who was not comfortable coming inside the office. The doctor, without hesitation, left the office to go help the patient outside and make sure they received the care they needed. It was a really powerful moment to witness. The patient needed this visit in order to be cleared to attend school, so the stakes were real. But it also made me think about something I had read about and heard about before, which is the tension doctors face between truly caring for their patients and keeping their practice running efficiently. On a busier day, that same level of individual attention may not have been possible, and that patient might have left without the care they needed. It raised a bigger question for me about how independent practices, already stretched thin financially, are supposed to handle unique situations like this without it costing them. I do not have a clean answer, but it is something I will be thinking about as my research develops.
On the research side, I spent time cold emailing pediatricians across NYC to try to line up more interviews. It was a valuable experience in itself because I had to learn how to introduce myself professionally, explain my project clearly, and make a compelling case for why a busy doctor should take time out of their day to talk to a high school student. I have emailed around 30 doctors and it has been very hard to get responses, which is actually something I predicted in my senior project proposal. I flagged early on that getting doctors to open up about detailed financial information would be one of my biggest challenges, so I also planned for it. My solution is to shift more heavily toward the academic and article based side of my research, using interviews as supporting evidence rather than the backbone of the project. I have one more interview lined up which I am looking forward to, and I decided to lean heavily into the peer reviewed data side of things. After thinking about it, I think the most strategically sound approach is to build a strong foundation of literature and let the interviews serve as real world support for what the research is already showing. It just makes the most logical sense for the kind of paper I am trying to write.
Overall, even in a slower week there is always something new to learn, whether it is in the office or through the research process itself.
Thanks for reading, see you in the next one!
Week 4: More Doctors, Same Story
This week was another solid one. I continued working at the pediatric practice in Brighton Beach, helping out with patients and getting more hands-on experience with how the office runs day to day. It was another good week at the office and I feel like every week I spend there I pick up something new about how these practices actually operate behind the scenes.
On the research side, I came across a really useful article from Physician on FIRE based on the 2025 Doximity compensation report, which surveyed over 37,000 physicians (Shah, 2026). The data showed that pediatric specialists earn substantially less than their adult medicine counterparts across every specialty, despite similar training requirements and clinical complexity. The study also found that the percentage of physicians working in private practices fell from 60.1% in 2012 to 42.2% in 2024, and 81% of physicians agreed that reimbursement policy played a significant role in that decline (Shah, 2026). This connects directly to what Dr. Levi, the NYC pediatrician I interviewed in Week 2, told me about hospital systems getting reimbursed at much higher rates than independent practices for the same services. The data backs it up on a national scale.
I also had a chance to visit SUNY Downstate this week, where I got to have some conversations with pre-med students and residents who are on their way to becoming doctors. It was really interesting to hear their perspectives, especially thinking about how the financial realities of running a practice might affect the choices they make down the road about where and how they practice.
I also had the chance to interview Dr. Alexander Abramov, a pediatric doctor also based in Brooklyn who, like Dr. Levi, serves the Russian speaking community. His experience echoed a lot of what Dr. Levi shared in Week 2. Rent is a major burden, staff salaries take a significant portion of revenue, and Medicaid reimbursement rates make it very hard to maintain healthy profit margins. Like Dr. Levi, Dr. Abramov owns his own independent practice and primarily operates under the insurance based model, serving a largely Medicaid dependent patient population. Seeing these same challenges reflected in another Brooklyn based independent practice reinforced that these are not isolated problems, they are systemic issues affecting independent pediatric clinics throughout the borough.
Overall it was a productive week and I feel like the research is really starting to come together. I am continuing to reach out to more doctors as well, trying to build out the interview side of the project alongside the literature.
Thanks for reading, see you in the next one!
Works Cited:
Physician Compensation 2025: Modest Gains and Deeper Financial Pressures - Physician on FIRE. (2026, January 13). Physician on FIRE. https://www.physicianonfire.com/physician-compensation-gains/
Week 5: Concierge Medicine
This week, I continued working at Dr. Frenkel's office, and I made a deliberate decision to focus my research this week on private care, concierge medicine models, and the ongoing decline in Medicare and Medicaid reimbursement rates for independent physicians. These are the three payment models at the core of my project, and I felt like this was the right week to really dig into them.
To provide some context, the three payment models at the center of my research are insurance-based care, where doctors bill private insurers or Medicaid for each patient visit, out-of-pocket care, where patients pay directly for each visit without insurance involvement, and concierge or membership care, where patients pay a flat monthly or annual fee for access to their doctor regardless of how many visits they need. Concierge medicine is a model where patients pay a monthly or annual membership fee directly to their doctor in exchange for more personalized care, faster appointments, and a closer relationship with their physician. Instead of relying on insurance reimbursements, the practice generates revenue directly from patients.
The first article I read was published in the journal Medical Economics, focused on why concierge medicine is becoming an increasingly attractive option for physicians. The article argues that this model gives doctors a reliable and predictable revenue base that protects them from the instability of traditional insurance billing. This connects directly back to what I predicted in my senior project proposal and in Week 1, where I claimed that concierge medicine would be the most financially stable model. Bauer reinforced that prediction, noting that concierge practices were able to stay financially stable even during the pandemic because they were not dependent on patient visit volume for income. The article also points out that doctors in front line primary care including pediatrics continue to experience some of the highest burnout rates, and that the membership model directly addresses this by reducing administrative burden and giving doctors more time with fewer patients. The financial security that comes from membership fees, combined with lower administrative overhead, makes it a genuinely more sustainable option for doctors who can make it work.
The second article I read was also published in Medical Economics, focused on the 2025 Medicare reimbursement cuts. This one was important just to stay current on what is actually happening in the world of healthcare finance right now. The article breaks down how 2025 marked the fifth consecutive year of Medicare payment cuts to physicians, with a 2.83% reduction in the reimbursement rate (Shryock, 2025). At the same time, according to Shryock, who references the Medicare Economic Index, the actual cost of running a practice is projected to increase by 3.5%. That widening gap between what doctors earn and what it costs to operate a medical practice is a significant challenge. Learning that the firsthand experiences of Dr. Levi and Dr. Abramov are directly consistent with these national trends made it even clearer how serious and widespread this problem is for independent practices.
Overall this was a focused and productive week on the research side. The two articles together told a clear story: reimbursement under the traditional model keeps getting worse, and concierge medicine is increasingly looking like the only model that offers real financial stability.
Thanks for reading, see you in the next one!
Works Cited:
Shryock, Todd. "What You Need to Know about the Medicare Reimbursement Cuts for 2025." Medical Economics, 9 Jan. 2025, www.medicaleconomics.com/view/what-you-need-to-know-about-the-medicare-reimbursement-cuts-for-2025.
Bauer, Terry. "Why 2025 Is a Pivotal Year for Concierge Physicians to Thrive." Medical Economics, vol. 102, 19 Feb. 2025, pp. 38–38, www.medicaleconomics.com/view/why-2025-is-a-pivotal-year-for-concierge-physicians-to-thrive.
Week 6: Going Deeper on Costs and Payment Models
This week was relatively chill at the office, so I kept the research momentum going. I continued digging deeper into the private side of healthcare and the costs of running a medical practice. This week I focused on two articles that I found really interesting and that added a lot of new layers to what I have already been researching.
The first article I read was written by Chris Harrop, published by the Medical Group Management Association (MGMA), focused on the rising operating costs of medical practices in 2025. The findings were pretty striking. According to the article, 90% of medical groups reported that their operating costs in 2025 are higher compared to 2024 (Harrop, 2025). The data showed that labor costs alone, meaning staff salaries and benefits, typically consume 50-60% of all operating expenses. Notably, primary care practices have been increasing their staffing levels, which is driving costs up even further. Other variables driving up the cost of running a practice include challenging commercial payer negotiations alongside stalled Medicare payment reform legislation that has yet to provide any meaningful financial relief for independent practices. This directly mirrors what both Dr. Levi and Dr. Abramov described in their interviews, where rent and staff salaries were their two biggest financial responsibilities.
The second article I read was a peer-reviewed study published in the Journal of General Internal Medicine in February 2025, and it was the first study to actually provide a direct financial comparison between Direct Primary Care (DPC) and the insurance-based model, also referred to in academic literature as fee-for-service (Tecco et al., 2025). As mentioned in previous blogs, some patients pay an insurance company to access and pay for medical services, and the term fee-for-service is used in this article to describe this model. When patients have private insurance, instead of charging a flat monthly fee to the patient, the doctor bills the insurance company separately for each individual service provided to the patient during a visit. So if a patient received a physical exam or checkup and also received an injection, the doctor would bill the insurance company for both services as two separate charges. This results in an itemized way of getting paid, and it is how the majority of independent practices in the United States currently operate.
The study found that DPC practices manage on average only 413 patients per physician, compared to 1,800 to 2,500 patients in traditional fee-for-service practices (Tecco et al., 2025). While physicians see fewer patients in the DPC model, the key difference is the generation of stable predictable income through membership fees rather than relying on insurance reimbursements that are subject to cuts from both the federal government, which sets Medicare and Medicaid rates, and private insurance companies, which control their own reimbursement schedules. Tecco et al. (2025) also pointed out that insurance companies limit the range of services they will actually reimburse doctors for, meaning doctors are effectively restricted from offering certain treatments or services if insurance will not cover them, which is something that has come up repeatedly in my research.
Overall this week reinforced an idea I keep coming back to: the insurance-based model is getting harder and harder to sustain, and practices that can find a way to diversify their revenue or shift toward more predictable income sources are in a much stronger financial position.
Thanks for reading, see you in the next one!
Works Cited:
Medical practice operating costs are still rising in 2025 — here’s how to control them. (2024, March 28). Mgma.com. https://www.mgma.com/mgma-stat/medical-practice-operating-costs-are-still-rising-in-2025-heres-how-to-control-them
Tecco, H., Rahim, F. O., Lalwani, P., & Palakodeti, S. (2024). Direct Primary Care: Financial Analysis and Potential to Reshape the U.S. Healthcare Landscape. Journal of General Internal Medicine. https://doi.org/10.1007/s11606-024-09038-5
Week 7: High Demand, Low Pay, and Why It All Matters
This week was one of the busiest I have experienced at the office. There were a large number of patients and it really reinforced something I have been building toward in my research for weeks now. Publicly funded practices that rely heavily on Medicaid are dealing with significantly higher demand and significantly lower pay at the same time, and that combination puts an enormous amount of stress on everyone working there.
One moment that really stuck with me this week was writing a large number of return to school passes on a particularly busy day. These are kids who cannot go back to school without being seen by a doctor first, so the stakes are real. There were lines of patients waiting and the pressure to get everyone seen was intense. It made me think about how unsustainable this situation is. These doctors are being asked to do more and more while getting paid less and less for it.
That brought me to the first article I read this week, published by the American Medical Group Association in June 2025. The survey covered data from over 220,000 physicians nationwide and found that when compensation increased by 4.9%, physician productivity also rose by 2.1% (AMGA, 2025). Practices that were able to invest in expanded capacity, meaning more staff, more clinicians, and more hours, saw the biggest gains in output. This makes complete sense from a basic business perspective. To scale and serve more patients, you need to reinvest revenue back into the practice by hiring more doctors, nurse practitioners, and support staff. But if reimbursement rates stay low and profit margins stay thin, that reinvestment becomes almost impossible. The article also found that primary care including pediatrics saw a 5.8% compensation increase, but that still lags far behind other specialties, meaning pediatricians continue to be among the most underpaid doctors relative to the complexity and volume of care they provide.
The second article I read was a peer-reviewed study published in 2024 that put a number to something I have been watching firsthand all semester. According to the study, 1 in 10 children in the United States currently do not have a primary care doctor, and that number is steadily increasing (Wells et al., 2024). Medical practices are already at maximum capacity for Medicaid patients, and private pediatricians cite low payment and excessive paperwork as the main reasons they limit how many Medicaid patients they will take on. Additionally, as medicine improves and treatment options expand over time, survival rates for children with life-threatening illnesses increase, which adds more pressure on clinicians as patient populations require even more care and attention. The study argues that unless Medicaid funding is raised to be on par with Medicare, the quality of pediatric care in the US will keep declining and the strain on the overall healthcare system will only get worse as these children grow up without adequate primary care. This connects directly to everything I have seen at the office and everything both Dr. Levi and Dr. Abramov described in their interviews.
Overall this was a week that reminded me why this research matters. It is not just a financial question. It is a question about whether kids in communities like Brighton Beach are going to be able to see a doctor when they need one.
Thanks for reading, see you in the next one!
WORKS CITED:
Wells, J., Shah, A., Gillis, H., Gustafson, S., Powell, C., Amornluck Krasaelap, Hanna, S., Hoefert, J. A., Bigelow, A., Sherwin, J., Lewis, E. C., & Bline, K. E. (2024). Tiny patients, huge impact: a call to action. Frontiers in Public Health, 12. https://doi.org/10.3389/fpubh.2024.1423736
AMGA. (2025, June 30). New AMGA Survey Notes Significant Gains in Physician Compensation. Amga.org; AMGA. https://www.amga.org/about-amga/newsroom/press-releases/2025/june/new-amga-survey-notes-significant-gains-in-physician-compensation
Week 8: Burnout
This week I continued working at the office and spent a good amount of time thinking about something that has been building in the back of my mind all semester. We talk a lot about reimbursement rates and operating costs, but there is a human side to all of this that does not get enough attention. The financial pressure on doctors does not just hurt their bank accounts. It feeds into a much bigger problem called physician burnout, and that burnout eventually trickles down to the patients who need care the most.
According to a 2024 report by Horstman from the Commonwealth Fund, nearly half of all primary care physicians in the United States report feeling burned out. Of those burned out physicians, 39% said they plan to stop seeing patients entirely within the next one to three years (Horstman, 2024). On top of that, 86% of burned out physicians said their job is extremely or very stressful, and 81% reported being dissatisfied with practicing medicine. The article also points out that by 2036 the US is estimated to face a shortage of 68,020 primary care physicians, which is a direct consequence of burnout driving doctors out of the field. For patients, especially kids in Medicaid dependent communities like Brighton Beach, that shortage is not an abstract statistic. It means longer wait times, fewer options, and in some cases no doctor at all.
But what I think gets overlooked in this conversation is how early the burnout actually starts. Before a doctor even sees their first patient, they have already been grinding for years. To be competitive for medical school today, students need near perfect GPAs, strong MCAT scores, hundreds of hours of volunteering, hundreds of hours of clinical shadowing, and research experience on top of all of that. According to the Association of American Medical Colleges (AAMC), in the 2024-25 cycle, 51,946 people applied to medical school and only 23,048 actually got in (Boyle, 2025). That means more than half of all applicants, after years of preparing, still did not get a seat. The average accepted student had a GPA of 3.86 and an MCAT score of 512, and cumulatively performed over 709 hours of community service. And that is just to get in. The competition only intensifies during residency in the US, where according to the AAMC's 2025 Survey of Resident/Fellow Stipends, first year residents earn an average of only $67,899 per year despite regularly working 60 to 80 hours per week. Add in hundreds of thousands of dollars in medical school debt, with the most expensive programs now exceeding $100,000 a year in tuition alone according to the Education Data Initiative, and it starts to become clear why so many doctors hit a wall.
The financial structure of how we pay doctors is not just a business problem. It is a patient access problem, and it starts much earlier than most people realize.
Thanks for reading, see you in the next one!
Horstman, C. (2024). A Poor Prognosis: More Than One-Third of Burned-Out U.S. Primary Care Physicians Plan to Stop Seeing Patients. Commonwealthfund.org. https://doi.org/10.26099/EVWB-8T35
Boyle, P. (2025). Medical school enrollment reaches a new high. AAMC. https://www.aamc.org/news/medical-school-enrollment-reaches-new-high
Week 9: The Business Behind the Bill
This week I continued working at the office and shifted my research focus to something that has been sitting in the background of this entire project since week one. Every time I talk about administrative burden, insurance paperwork, and the cost of billing, there is an entire industry operating behind the scenes that most people never think about. This week I dove into the world of medical billing companies, what they are, how they work, how much they cost, and why their industry is growing faster than almost anything else in healthcare.
To give some context, a medical billing company is a third party business that a practice hires to handle all of its insurance claims, coding, and payment collection on their behalf. Instead of employing a full in-house billing team, practices outsource this work to specialized companies that do nothing but manage the financial side of healthcare. Dr. Levi mentioned back in Week 2 that she outsources her billing, and at the time I noted it without fully understanding the scope of what that meant. This week I finally dug into it.
The first article I looked at was a market research report from Grand View Research on the US medical billing outsourcing market. The numbers were honestly staggering. The US medical billing outsourcing market was valued at $6.95 billion in 2025 and is projected to reach $17.69 billion by 2033, growing at a rate of 12.56% per year (Grand View Research, 2025). To put that in perspective, this is one of the fastest growing sectors in the entire healthcare industry. The main drivers of this growth are the increasing complexity of insurance codes and regulations, the rising rate of claim denials, and the pressure on practices to reduce administrative burden so staff can focus on patient care (Grand View Research, 2025). The fact that an entire multi-billion dollar industry exists purely to handle the paperwork side of getting doctors paid says everything about how broken and complicated the current system is. It is not just an inconvenience. It is a structural problem that has spawned its own economy.
The second article I read was a detailed breakdown of medical billing costs from Viaante, published in 2026. This one put real numbers on what outsourcing actually costs a practice. Billing companies typically charge between 4% and 10% of a practice's gross collections (Viaante, 2026). To make that concrete, for a practice collecting $85,000 per month, a 7% billing fee means paying $5,950 every single month just for billing services alone (Viaante, 2026). For a small independent pediatric practice like Dr. Levi's or Dr. Abramov's, that is a significant chunk of already thin profit margins. The article also cited data from the American Medical Association showing that physicians and staff spend an average of 14.5 hours per week on prior authorizations alone, and data from the Healthcare Financial Management Association showing that reworking a single denied claim costs between $25 and $117 (Viaante, 2026). Perhaps most telling, nearly 60% of practices with under 10 physicians are now considering outsourcing at least part of their billing operations, which shows just how widespread this problem has become (Viaante, 2026).
Putting all of this together, what becomes clear is that the billing burden is not just a cost, it is a symptom of a broken reimbursement system that has grown too complex for independent practices to manage on their own. The insurance system has become so complex that an entirely separate industry worth nearly $7 billion has emerged just to manage it. And the practices paying for that industry, particularly small independent ones serving Medicaid dependent communities, are the ones who can least afford it. When Dr. Levi said that 20% of her operational focus goes toward billing, she was not exaggerating. She was describing a reality that tens of thousands of independent practices across the country are living every single day.
Thanks for reading, see you in the next one!
Works Cited:
Welcome To Zscaler Directory Authentication. (2026). Viaante.com. https://www.viaante.com/resource-center/blogs/medical-billing-cost-usa-2026/
U.S. Medical Billing Outsourcing Market Size Report, 2030. (2023). Grandviewresearch.com. https://www.grandviewresearch.com/industry-analysis/us-medical-billing-outsourcing-market
Week 10: End of an era
This week looked a little different from the rest. I continued my full shift at the Brighton Beach practice, but outside of the office I spent most of my time consolidating everything I have learned and preparing to present it.
The bulk of my time went toward working on my final research paper, which will be between five and ten pages and will synthesize everything I have gathered across all nine previous weeks of research, interviews, and first-hand office experience. Going back through my previous blog entries to retrace my thinking was really valuable. I could see how my understanding evolved from week to week, starting with a broad question about payment models and gradually building toward a much more nuanced picture of what financial sustainability actually looks like for an independent pediatric practice in New York City.
I also spent time preparing my final presentation, creating slide drafts, thinking through my key talking points, and practicing how I want to deliver everything. After spending weeks reading studies, conducting interviews, and working firsthand in a pediatric practice, I have a lot to say and the challenge now is saying it clearly and concisely. This project has genuinely been one of the most valuable experiences of my senior year, and I am proud of what it became.
Thanks for reading.
Post 12: Conclusion
This project has been one of the most meaningful things I have done in my academic career. What began as a question about payment models and operating costs turned into something I did not expect: a deep dive into the human consequences of a broken financial system. The answer to my research question is that financial sustainability depends heavily on location and patient population. Under ideal circumstances the concierge model is by far the most financially sustainable, but for practices serving low-income Medicaid-dependent communities like Brighton Beach, it is simply not accessible.
Through two summers at the practice, two interviews with independent pediatricians, and weeks of reading peer-reviewed literature, I learned more about the business of medicine than I ever expected to going into this. One of the biggest takeaways from this project is something I wish more students knew going in: healthcare is not just biology and chemistry. It is business and entrepreneurship. The doctors who survive in this field are not just clinicians, they are operators, negotiators, and decision makers navigating one of the most complex financial systems in the world. Understanding that early makes a real difference.
I plan to continue exploring this intersection of medicine and business in college, and this project gave me the foundation to do that. I want to thank Dr. James for her guidance throughout this process, Dr. Frankel for welcoming me into the practice, and Dr. Levi and Dr. Abramov for their time and honesty. This project would not have been possible without any of them.
You can view my final presentation slides here: https://docs.google.com/presentation/d/1nReiNKXLqavsUwSJn0tXrlXgbnT8eyQt/edit?usp=sharing