$3 Labs Behind a $10,000 Deductible Sent a Duluth Doctor Out on His Own

$3.

That is what Dr. Jay Joseph Allen says the labs cost. The same labs his patients kept asking him not to order.

Allen is a family physician in Duluth, Minnesota. Starting in 2020 he worked at Essentia Health's Lakewalk Clinic and taught at the Duluth Family Medicine Clinic. Over the years he kept hearing the same thing. Patients couldn't come back for follow-up visits, because insurance wouldn't cover them until they hit a $10,000 deductible. Then they started asking him to skip the bloodwork too.

"These labs actually cost $3," he told a small-business panel in Duluth this month. "That was really the straw that broke the camel's back for me."

Sit with that. A test that costs less than a cup of coffee, and a patient talking their own doctor out of it. Not because the medicine was wrong. Because the price was a mystery and the deductible was a wall.

I am not shocked. Every primary care doctor has had this conversation. You know what the patient needs. The patient knows what the insurance card won't do. So you bargain your way down from good medicine to affordable guesswork, one skipped lab at a time. Nobody denied the test. The deductible just made the patient afraid to ask what it cost.

So Allen left. Last month he opened Palisade Direct Primary Care on East Superior Street. He put in about $30,000 of his own money, took out a home equity line as a safety net, and got a loan from the Duluth 1200 Fund. 2 weeks before opening day, the building caught fire. He saw patients out of a surgery center, then an outbuilding at an animal hospital, before landing in an old chiropractic office.

That is what it takes right now for one doctor to get out from between his patients and a $10,000 deductible.

His math is the part every tired doctor should read. A traditional family physician is expected to carry 2,000 to 3,000 patients. Allen plans to stop at 500 memberships, and he says he will earn the same income he made inside the system. Half his patients so far are uninsured. He is also offering memberships to small businesses that keep losing workers to bigger employers with better benefits.

Fewer patients. Same paycheck. Longer visits. Nobody asking which lab they can afford to skip.

I am not anti-insurance. Keep a policy for the wreck: the surgery, the specialist, the ER. But a $3 test should never sit behind a $10,000 door. In direct care it doesn't. You pay a flat monthly fee, and labs are typically billed at close to what they cost. Since January, a qualifying membership can even be paid with HSA money, up to $150 a month for an individual.

$3 is a price. $10,000 is a permission slip.

Source: Brielle Zywicki, Duluth News Tribune, Direct primary care industry grows in Northland as insurance premiums rise (Oct. 12, 2026): www.duluthnewstribune.com/health/direct-primary-care-industry-grows-in-northland-as-insurance-premiums-rise

$165 in the Office, $404 at the Hospital for the Same Mole

Same mole. Same procedure. Two prices.

MedPAC's 2024 comparison put a skin-lesion removal at about $165 total in a freestanding physician's office. In a hospital outpatient department, the same work ran $404: $97 for the professional piece and $307 through the hospital outpatient payment system.

I am not shocked. The hospital has a building to feed. The office has a room, a tray, and a doctor who finishes the visit before you leave.

What I am against is pretending those are the same product. High-deductible patients pay that facility fee themselves. Schedule the evaluation and the procedure on different days to dodge a proposed same-day cut, and the patient pays again with a second ride, a second afternoon off work, and another open slot that someone else needed.

Direct care does the small stuff in the office. Mole. Joint injection. Laceration. Posted price. One visit. No facility fee pretending to be medicine.

I am not anti-insurance. Keep a policy for the wreck. A mole is not a wreck. It is an oil change with a Band-Aid.

$165 is a price. $404 is a building.

Sources: The Rojas Report (Dutch Rojas), MedPAC June 2024 report Ch. 1: read.rojasreport.com/p/i-love-dr-oz

$28,000 for a 10-Minute Neck Injection

Jamie Estrada of Albuquerque got 2 lidocaine injections in his upper spine. 10 minutes each. The shots were a test: if the pain vanished, a permanent nerve ablation might help his chronic neck pain.

The pain vanished. For about 6 hours. Then it came back.

The real zinger was the bill. His insurer was billed $28,000 for each injection.

Elisabeth Rosenthal told the story for KFF Health News. The contracted rate his plan agreed to pay was $23,237.50 per shot. Estrada's coinsurance was $5,166.20. On a high-deductible plan, that meant he owed more than $5,000 for a brief visit.

I am not shocked. Look at what the same procedure costs in the same market. At the hospital where those surgery-center doctors admit patients, the same insurer's contracted rate for the same injection is $2,058.67. Other insurers pay that surgery center about $700 for the same shot, according to Turquoise Health data cited in the piece.

$28,000. $23,237. $2,058. $700. Same medicine. Same needle. Same town.

The surgery center is part of United Surgical Partners International, which owns more than 535 surgical facilities and sits under Tenet Healthcare. That is negotiating power wearing a local name on the door.

When Estrada challenged the bill, he said an administrator told him the charges came from a "legacy contract" with the insurer that was "advantageous" and "favorable" to the center. Advantageous to whom is the question.

He walked away from the ablation. While he was being prepped, he recalled, the physician said he had "heard he might sue" and chastised him. Estrada said he never threatened a lawsuit. He got off the table and put his shirt back on.

I am not anti-insurance. Keep a policy for the wreck. But a 10-minute diagnostic shot should not cost more than a used car, and a patient's coinsurance should not be five figures because somebody negotiated a "favorable" legacy rate and passed the slice to the deductible.

In direct care, the number on the door is the number you pay. No chargemaster. No legacy carve-out. No $5,000 surprise for a test that lasts 6 hours.

$28,000 is not a price. It is what happens when the invoice writes the medicine.

Sources: Elisabeth Rosenthal, KFF Health News: kffhealthnews.org/health-care-costs/insurers-pay-high-prices-premiums-coinsurance-cost-control-inflation-patients/

$300,000 in Legal Fees to Keep Seeing 200 Patients

Dr. Nyasha Spears has spent $300,000 on lawyers so she can keep taking care of about 200 patients in Duluth, Minnesota.

That is not a typo. That is the price of a noncompete.

She signed it in October 2013, when she joined St. Luke's P.S. Rudie Medical Clinic downtown. Standard language. No similar practice within 25 miles for up to 2 years after she left.

Then her employer closed the clinic. Aspirus St. Luke's gave the doctors 36 days of notice, according to court documents reported by the Duluth News Tribune. Their contracts required 180. The doctors asked to be released from the noncompete. Aspirus said no.

So Spears sued. In February, Judge Shawn Reed blocked Aspirus from enforcing the clause while the case goes on. He wrote that enforcing it would keep her from practicing in her own community and disrupt care for her patients. And in a state short on primary care doctors, it would "exacerbate an existing public health problem, in direct conflict with the public interest."

In April, she and Dr. Kristin Lusian opened Amity Creek Primary Care, a direct primary care practice in Duluth's Lakeside neighborhood. The prices are on the website. $40 a month for kids. $90 to $130 a month for adults, depending on age. Labs at wholesale. No insurance billed.

Spears told Star Tribune columnist Aaron Brown who walks in the door. Carpenters. Artists. Waitresses. Sandwich makers. People who own a welding company or a cleaning company. "These are people who are the backbone of America who cannot get health care."

Aspirus appealed. The appeals hearing was October 8. As I write this, I have not seen a ruling.

Here is the part that should bother everyone. Minnesota banned noncompetes in 2023. But the law only covers agreements signed on or after July 1, 2023. A doctor who signed in 2024 walks. A doctor who signed in 2013 litigates.

I am not shocked. A health system that closes the clinic is not protecting the clinic. It is protecting the territory. 200 patients is not a threat to a regional system. It is a neighborhood that finally has a doctor who answers.

A noncompete in medicine does not stop a doctor from competing. It stops patients from following the doctor they already trust. The patient never signed it. The patient pays for it anyway.

If you are an employed physician thinking about the jump, pull your contract tonight. Read the radius. Read the date. Read the notice clause. Then talk to a lawyer before you sign a lease.

In direct care, nobody owns the relationship but the patient and the doctor.

$300,000 is not the price of competition. It is the price of permission.

2.9 Million Forced Off Their Medicare Advantage Plan

One in ten.

A Johns Hopkins study in JAMA counted 2.9 million Medicare Advantage enrollees who lost their 2025 plan for 2026 because the plan quit their county or ended the contract. Another 25.8 million could keep theirs. From 2018 through 2024, that forced-exit rate averaged about 1%. It jumped to 6.9% in 2025. In 2026 it hit 10%.

Rural counties got hit harder. So did people on PPOs and on smaller carriers. In twelve states, more than 20% of Medicare Advantage members had to move. In Vermont it was 92%.

Medicare open enrollment starts October 15. Millions will shop again because the plan moved, not because they wanted a better one.

I am not shocked. A plan is a product a company can pull. A doctor is a person who either stays or does not. When the product leaves the county, the patient inherits the paperwork, the new network hunt, and the chance their doctor is gone with the plan.

I am not anti-insurance. Keep a policy for the wreck. I am against building everyday doctor access on a contract that can vanish between Octobers. Direct care keeps the relationship on a monthly fee you both agreed to. The number on the door is the number you pay. The plan can leave. The doctor does not have to.

2.9 million is not a benefit update. It is a forced move.

Source: JAMA, Meiselbach et al., Medicare Advantage plan exits, 2026: jamanetwork.com/journals/jama/fullarticle/2845237