“I thought, ‘There is no way I am paying this money,’” she said.
When Maya Mackrandilal opened up an email from her primary care physician in 2021, she laughed. She had recently switched to the practice, and the letter informed her that, starting in just a few months, it would institute a fee of $250 per year, in addition to whatever she paid for insurance. Her husband also saw that doctor, so as a family, it would cost them $500 more each year.
Mackrandilal decided to find a new physician in Los Angeles who didn’t charge a fee, an arduous process that she ultimately decided was worth it, because she said she likes her new physician better. Still, the experience made her wary and on edge, waiting for the next fee to drop. Her child’s pediatrician doesn’t charge one yet, but she’s heard many do, and she said they’d change doctors if it happened.
These annual fees are becoming more common among health care providers in California’s major metros. There isn’t a standard for what these fees cover, let alone what they cost, creating a new “wild west” that many patients don’t even realize exists until after they’ve scheduled an appointment. For some, a few hundred dollars every year may be a nominal amount to pay for access to quality health care, but for others, it’s widening the disparity in an already fragmented and costly medical system.
Reinventing the system
Hybrid primary care — the combination of traditional insurance-based billing and a membership fee — has been around for nearly two decades. When it debuted, an emphasis on a high-touch, tech-focused approach to preventive medicine seemed revolutionary, for those who could afford it. Gone were the days of struggling to get in to see a doctor when an ailment arrived; instead, members could get a same-day appointment, often using digital technology in a new way.
The most well-known pioneer in the space, San Francisco-founded One Medical, opened up in 2007. Membership started at $100 a year and often came fully covered by big tech companies, helping supercharge its rapid expansion. Ultimately, Amazon acquired One Medical in 2023. Today, it has around 240 offices across the U.S. and more than 800,000 members, as of 2022.
Since then, many copycats have emerged, especially in California, including biometrics-focused Forward and women’s health-focused companies like Tia. But now, more traditional practices are adopting the model, instituting their own annual fees, frequently stating they need them to stay afloat. Doctors cite a number of reasons for why this additional revenue is necessary, most often noting increasingly low insurance reimbursements, the need for more administrative staff to run a practice and overall physician burnout.
And it’s not just hybrid primary care that’s increasing in popularity. Concierge medicine — which typically commands a higher annual fee — is also on the rise. Some medical practices are choosing to opt out of insurance altogether, offering their services for cash instead, often promising enhanced or “luxury” health care. In a study that looked at the number of direct primary care and concierge practices from 2018 to 2023, the number grew by 83.1%, from 1,658 practices to 3,036, the analysis from Johns Hopkins, Oregon Health & Science University, and Harvard Medical School found.
These providers can have memberships ranging from $1,000 to as much as $20,000 or more a year, which may include some, but rarely all, services. And some still recommend having insurance.
“The growth of these models may benefit participating patients and clinicians, but it’s important everyone understands the potential impact these practices have on the health care system at large,” Dan Polsky, co-author of the study, told Johns Hopkins. “We have to consider how the growth of these models may affect access to primary care for the vast majority who can only afford the care covered by their insurance plan.”
‘Can’t keep your doors open without it’
Dr. Sarah Yamaguchi, a gynecologist in Los Angeles, started charging what she calls an administrative fee in July 2025. For her, the pressures had been mounting for years, as insurance reimbursements cratered, her rent kept rising and she was dedicated to paying her employees fairly.
Yamaguchi tried fitting in more patients when her insurance reimbursements went down, but she soon found herself “running around like a crazy person,” she said, and not enjoying her work. Meanwhile, as insurance plans have gotten more complicated and numerous over the years, it has required more staff to facilitate prior authorizations and reimbursements. She said she sees around 2,500 patients per year, and even if each patient visit requires an extra five minutes from the staff to coordinate insurance needs, something they can’t bill for, she estimates that’s an extra 208 hours of work a year.
Yamaguchi decided her options were either to drop insurance altogether — which would mean she could eliminate several employees’ positions — or give up on many of the amenities that were crucial to her practice, like having a patient portal and reasonable response times to electronic messaging. She ran the numbers, and ultimately, when she looked at pricing without insurance, “I felt like I was blackmailing my patients,” she said, since for healthy young patients, payments seemed reasonable, but if something went wrong, it would be astronomical.
She had considered opting out of insurance before but finally decided she’d “have way too much guilt” if she did that. “I like my patients too much, so I need to take insurance,” Yamaguchi said.
She settled on $250 per year, which would cover messaging her via the patient portal without an appointment and include filling out any needed paperwork. “If I wanted to do it to be a millionaire, I would not be doing $250 a year … If I wanted to make money, I would just drop all insurance, but I don’t want to do that to my patients,” Yamaguchi said.
She said she tried to keep that number as low as possible, knowing she’d likely lose some patients over it. Yamaguchi said she actually got less blowback than she thought when she sent out a letter informing patients of the change. She was even surprised by how many patients messaged her supportively, saying they’re happy to pay it for the care they receive. She said she believes more people are becoming aware of the problems with the health care system.
“They’re becoming more common, because if you’re not a large group, you can’t keep your doors open without it,” Yamaguchi said.
The rise of telehealth
Demands on doctors have also rapidly changed in the past decade. Once only accessible on the phone, the COVID-19 pandemic supercharged the adoption of telehealth, and digital advances made messaging a doctor easy. But with those advances came expectations that a doctor would answer inquiries in a timely and thorough manner, something that’s not necessarily covered by insurance.
Both Medicare and private health insurers have adopted new rules since around 2019 to accommodate the increase in telehealth, allowing for a range of billing for these types of “appointments.” But one study found that messages increased 157% from a pre-pandemic average, and assessing what counts as a “visit” can be nebulous.
After the number of portal messages nearly doubled during and after the pandemic, a UC San Francisco study found that even instituting a fee did not significantly decrease the frequency of these messages. Even as patients were more frequently billed for these messages, in the study from Nov. 1, 2020, through Oct. 22, 2022, the volume of messages declined only slightly. So while the practices may get paid more for their time, the overall workload stayed elevated.
California law doesn’t prohibit these fees, but they can cover administrative tasks only, not anything that can be billed to insurance.
To pay or not to pay
For people like Mackrandilal, it just doesn’t make sense to pay a fee when she could access health care without paying one. “The idea of paying an extra fee when we already pay so much for health insurance, I just wouldn’t be able to do it,” Mackrandilal said.
Still, it’s a larger symptom of the problems within the health care system, she said, and she knows that for most doctors, it’s unlikely they’d institute these fees unless they needed them.
“There’s so much administrative bloat now, we’re having to pay extra staff to do all these things for us,” Dr. Sera Ramadan, a primary care physician in Los Angeles, said.
For her private practice, she employs a physician’s assistant, two full-time in-office staff and seven people in the Philippines to keep her practice running smoothly, with most employees focused on arduous administrative tasks. Ramadan said most people don’t understand how burnt out providers are and how the insurance system really works. Doctors’ offices and medical groups have contracts with insurance companies that set reimbursements for different services, and those reimbursements can vary wildly between providers. For large health care groups, they can command a higher fee, while “as a small practice, you have zero negotiating power,” she said.
It’s gotten so difficult to get a hold of insurance companies, Ramadan said, that for complicated cases, she recommends patients do a three-way call with the insurance company so they can get an authorization faster. As a bonus, her patients then better understand that she’s going to bat for them and all the “bloat” isn’t the doctor’s fault.
Ramadan’s practice doesn’t charge a fee right now, and doesn’t plan to charge one anytime soon, but she’s considered it in the past. She said she pays a fee for her child’s pediatrician’s office, and she’s happy to pay it, knowing what goes into running a practice, especially a pediatrician who has to deal with so many forms and patients who get sick frequently. She’d rather pay a fee for her child to see a doctor who isn’t burnt out.
“For me, it’s worth it,” Ramadan said.
She makes up some of her lost income in other ways, like contracting with companies to give executive physicals, which are more in-depth exams that don’t involve insurance. She said she also does immigration exams — mandatory for permanent residence status — which are cash payments.
It’s unlikely the industry will change anytime soon, Ramadan said, unless the direct-to-consumer companies create enough competition for insurance companies to make changes.
“If it keeps going the way it’s going … I probably will have to charge a fee eventually, but I’m trying not to do that right now,” Ramadan said.
Tessa McLean
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