It may seem like a radical step to take, but refusing to accept health insurance is a growing trend for doctors nationwide.
Fully 92% of doctors think insurance company incentives are not in the best interest of patients.
Others argue that the entire fee-for-service model is broken, pitting physicians, consumers, and purchasers against each other, with no clear winners.
Citing downward reimbursement pressures, obscene amounts of paperwork, and costly regulatory hurdles, more than 50% of physicians plan to reduce patient access to their services. Of these, nearly 7% are planning to switch to cash-only, or concierge payment models (with 5,500 such practices already existing nationwide).
So should you, too, consider taking the plunge with your practice? What are the risks and benefits to dropping insurance and what alternative payment methods could you adopt?
Below is a brief overview of each of the alternative models some physicians are pursuing, along with pros and cons, as well as case studies of those who have already implemented these methods in their own practices.
Concierge Care and Direct Primary Care
Sometimes denigrated as “luxury care for the wealthy,” concierge medicine actually operates at all levels on the cost spectrum, from $38 a month up to thousands.
This model involves charging patients a monthly “concierge” or membership fee, which guarantees them certain higher levels of access to doctors, including more time for appointments, and availability over phone, email, or through an EMR’s patient portal.
Sometimes the monthly fee covers all the costs of healthcare for the patient, but more often than not other services, like lab work, vaccinations, or x-rays, are paid for on an additional, a la carte basis.
Doctors can cut as much as 40% of their overhead expenses by eliminating the costs that come with processing insurance bills. Additionally, with this cost cutting, the total number of patients you need to see each day in order to stay solvent is reduced, allowing you to spend more time per patient, and provide better preventative care than if you were seeing one patient every 13 minutes (the current national average of a doctor’s office visit).
You’ll also have more flexibility in how you treat and interact with patients, since every decision and prescription you make won’t be subject to the strict scrutiny of far off actuaries.
That said, this model is ideal for primary care physicians, rather than specialists with advanced (and expensive) equipment, as the fees one would need to charge for specialized services may be outside the bounds of what patients can pay out-of-pocket.
5,500-some practices use this model in the U.S. Of these there are quite a few successful examples.
For instance, Dr. Stanford Owen, an internal medicine doctor in Mississippi, has a concierge practice where he charges his 1,000 patients just$38 a month. He was able to reduce his overhead and said, since the switch, his income is going up for the first time since the 1990s.
Dr. David Edelson, head of HealthBridge in New York, reduced his number of patients from 3,000 to 300 when he dropped insurance, and charges 250 of them $1,800 a year (around $150 a month) while being able to offer the other 50 scholarships. He says he’s bringing in the same number of fees as when he took insurance, but is reducing his overhead enough to make more money.
Some practices get rid of the monthly or annual membership fees and simply offer a direct menu of prices for individual visits and procedures. Many practices will do both, having a mix of concierge customers and direct-pay patients who forego the recurring fee and pay for everything on an as-needed, a la carte basis.
Revenue from this model can be more variable, but it also does away with all the overhead related to insurance processing, and gives you more flexibility to adjust pricing and offer a wider array of services.
Additionally you can use services like MediBid to bid for and find additional clients.
Dr. Brian R. Forrest runs a family practice with both a menu of a la carte services (going up to $59) and an optional membership option for $39 that includes lab work and a reduced per-visit cost. He says he’s able to save his uninsured patients up to 80% of their out-of-pocket costs.
Other facilities operating under this model include Regency Health, which performs surgeries and offers a comprehensive, transparent list of pricing for each procedure.
The Surgery Center of Oklahoma runs on similar principles, with surgery prices listed directly and openly on their website.
Refusing to take health insurance is not a decision to be taken lightly, and, often, if you’re a highly in-demand specialist with expensive equipment and procedures, it won’t make sense to do so. However, a whole host of other healthcare professionals, from family practices to surgeons, can and have benefitted from getting out of the paperwork and reimbursement game and switching to cash-only or concierge care.
If you find your patient load, regulatory burden, and shrinking reimbursement payments frustrating and draining, maybe you should consider dropping health insurance entirely.
Have you made the switch or know anyone who has? What has that experience been like? Add your thoughts in the comments!
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