One doctor’s cutting-edge payment plan could cost him

Dr. Craig Gustafson informed about 250 patients of the new flat-fee plan from Appleton Clinics at Houston Hall on Colorado Mesa University’s campus on Thursday evening. Gustafson asks his patients to become members of his venture — in the same way they might join a gym — for $79 a month.

Dr. Craig Gustafson loves his patients and wants to continue treating their health care needs, but he’s quitting health insurance.

Gustafson regrets the inconvenience, but the change in business practice he proposes may force some patients to choose between their health insurance and a continuing doctor-
patient relationship with the well-established Grand Junction physician.

Gustafson and an associate, Alex Chaffetz, told an overflow crowd of about 250 patients in two lecture halls at Colorado Mesa University on Thursday that there will be a payoff. 

It will take the form of generous, personalized care, fewer unnecessary referrals to specialists, discounted lab tests, a convenient in-office pharmacy and, in some cases, significant savings in annual health care costs, they said.


Gustafson said he’s had it with the costly, redundant, adversarial battle that is the administration of health care through third parties, also known as health insurance companies.

He’s sick of seeing more than 30 percent of the claims he submits to health insurance companies denied for reimbursement because of alleged coding errors or bad faith insurance practices.

He’s tired of having to treat as many as 35 patients a day, racing through an average exam, sometimes in seven minutes or less, and letting paperwork — which may take up to 25 percent of his day — interfere with the doctor-patient relationships he wishes to nurture.

The present business model for health care is contrary to its quality practice, he said.

To free himself of the worst administrative burdens, Gustafson said he could join a large group medical practice or seek employment at a hospital.

In those settings, the cost of back office operations like record-keeping and billing can be spread across many physicians, which reduces the per-physician cost.

Large groups can happen in many ways, like when several individual practices merge into one mega-practice, as in the case of Primary Care Partners.

Freedom from administrative burden also results when hospitals like St. Mary’s Hospital directly employ primary care doctors. St. Mary’s employs more than 15 primary care doctors, many of whom sought employment for the same reasons as Gustafson, hospital administrators said.

Unfortunately, these less administratively burdensome arrangements could still require Gustafson to see a minimum number of patients each day or in the case of hospitals, force him to lose the long-term doctor-patient relationships he has spent decades fostering.

Gustafson said he believes he’s found another way, but it means he could lose one-third or more of his patients.

The plan is not designed to result in increased profits to the clinic. The goal is to maintain the status quo in terms of earnings, but change the practice so it is more beneficial to all involved, he said.

“This is about survival,” Gustafson said, meaning continuing under current conditions would soon force him from medical practice, as it has many others,


Gustafson studied the question for years, reviewed different examples of what is known as the “direct primary care model” in places like Denver and Seattle, and eventually synthesized a program he believes is superior to anything out there.

Gustafson asked his patients to become members of the new venture — called Appleton Clinics — in the same way they might join a gym.

The membership model Gustafson proposes requires patients to pay an initial registration fee and also a monthly membership fee. 

“Unlimited primary care, one low monthly fee,” the Appleton Clinics website boasts.

Patients would pay $99 to become a member, then $79 a month to use all the equipment in the gym, or in Gustafson’s case, to receive for free all of the primary care services offered by the clinic.

The long list of services contains dozens of the most common complaints — all eligible for free treatment. 

No cost treatment is available for annual exams, stitches, wart removal, EKG monitoring, pulmonary function tests, breathing treatments and much more, according to the clinic’s schedule of services, which can be viewed at

Under normal circumstances, co-
payments and deductibles would have to be paid for ailments on the list of office services. As a member of Appleton Clinics, those co-payment and deductibles are avoided, Gustafson said.

Appleton Clinics already negotiated cut-rate contracts with national lab companies so members pay a minimum for many kinds of tests and get results more quickly, he said.

Obviously, the arrangement does not relieve patients of the obligation to maintain catastrophic coverage — still needed whenever specialty care beyond Gustafson’s field of practice is required, said Randy Pifer, a Grand Junction insurance professional who answered questions at the conclusion of the presentation.

Gustafson said he must refer patients to specialists for treatment of illnesses like lung cancer, liver disease and arterial sclerosis, to name a few.

Co-payments and deductibles paid to others would be required for coverage in those cases, Pifer said.


“Let me put it to you this way,” said Jack Vigil, a patient of Gustafson for more than 10 years. “I trust the man.”

“We have questions,” said Vigil’s wife, Katy.

Both endure chronic health problems covered by their insurance and want to make sure they can continue to receive the health care they need from Appleton Clinics without significant additional cost.

“For a family that is healthy like ours, we don’t need an ER, we don’t need a specialist, we just need a good doctor,” said John Marshall, a CMU administrator. “I’m intrigued.”

Enrollment is ahead of projections so far, Gustafson said. The patient roster could be filled before it officially opens in October.

Gustafson hosts another public meeting to explain the plan from 6 to 7 p.m. Thursday in Room 138 at Colorado Mesa University’s Houston Hall.


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