Contain Health Care Costs, Pay Cash

Dr. Sanity pointed me to a piece by John Stossel about controlling health care costs by putting the consumer and the service provider in contact. In essence, by paying cash, patients cut out the big, bloated, fat, obnoxious middle man--the insurance company.

Over the years, our practice has morphed from 80% insurance to now about 5%, and I'm eager to get rid of that 5%. Insurance companies' reason for existence is not to facilitate a patient's health. Their existence is to make money. And do they ever! I've written about this before as you all know. This is what a cash-based doctor must do:

He has to compete for his patients' business. One result of that is lower prices. And while the procedure got cheaper, it also got better. Today's lasers are faster and more precise.

Prices have fallen and quality has risen in other medical fields where most people pay for care themselves, like cosmetic surgery. Consumer power works -- even in medicine.

Here's another thing: cash offices aren't always the cheapest. Ours isn't. In fact, those with insurance can go to a myriad of doctors offices and receive cheaper services. More power to them! But they can't get the services we provide at our office. So while some doctors are being assaulted by the insurance company--trapped in a situation where reimbursement is embarrassingly inadequate but fearful the patients will bail if they give up that company--we are charging fair fees. The fees may make some people decide not to come in, but that's okay with us. Our patients chose our care, get better faster, and ultimately spend less money. And, we don't feel taken advantage of because we're being paid less than a Value Meal at McDonalds for our care. (One company reimbursed $5 of the fee with the patient paying a $5 co-pay. It cost more to bill the insurance company.)

If the medical profession were more cash-based, paying attention to the doctor's track record would matter a lot more. The guys who are bad surgeons or physicians would be more exposed. They wouldn't be able to hide in group practices and bury their dismal statistics. Likewise, excellent doctors, doctors who seem to have the magic touch could charge higher fees. And why not? They have better outcomes and are better skilled.

Many professions where the care seems voluntary like dental, chiropractic, cosmetic, eye surgery have changed to be primarily cash. It's a win-win for patients and doctors. The relationship is more pure. Doctors are more responsive. (Yes, we get calls at night and on weekends at times.) Patients heal faster. They are an active participant in their own healing. The stakes are high--they pay more if they don't follow the doc's instructions. When it's out-of-pocket, people are very motivated.

What about the poor people, you ask. Well, we've never turned anyone away for financial reasons. We have a specific percentage of our practice that is charity. Most doctors do the same. In addition, old-fashioned bartering can fill the bill, too. I know doctors who've been paid in blueberry pies. There's worse ways to be paid.

Stossel concludes:

When consumers pay for medicine themselves, saving insurance for the big things, and doctors deal directly with consumers, doctors begin to compete. They start posting prices and work to keep them low.

And consumers gain more control of their health care. Instead of governments and insurance companies deciding for patients, patients decide.

Competition gives consumers more choices. And choice gives them power. Remember that when you hear a politician promise to make health case accessible and affordable through the force of government.

Absolutely. Getting cash back into the whole endeavor would create a cheaper, more honest system. When my son burned his hand and we took a trip to the hospital, since our insurance is high-deductible, it was all out of pocket. The hospital and doctor over-billed. With insurance, it would never have been questioned. Why would the consumer care? They're not paying (oh, but they are, just not right then). But my husband talked with both offices and got the bill re-coded. He has a great motivation to keep the institution and doctor honest: it's his money. Every patient would do well to hold their health care providers accountable--insured or not.

Dr. Sanity said, "The free market? What a concept!" In medicine, it's a foreign one, but one that doctors and patients should become reacquainted with. The alternatives are frightening.