Musings of a Dinosaur

A Family Doctor in solo private practice; I may be going the way of the dinosaur, but I'm not dead yet.

Tuesday, June 03, 2008

What Will Happen

My Take on Reforming Health Care - Part 2

As an independent, solo physician, I am in business for myself. I make decisions about payment policies -- including insurance participation -- based on a number of variables. I have to pay my overhead and make a profit while keeping my patients (customers) satisfied, without running afoul of the law; just like any other business. At this particular time and place, my customers (patients) expect that I will participate with their medical insurance plan. Some, in fact, have chosen to utilize my services for that specific reason.

But my relationships with insurers -- including the government -- are deteriorating. The promise of volume in exchange for fee discounts isn't working to my benefit the way it used to. As dealing with insurers becomes less rewarding monetarily and the hassle-factor continues to increase, the time will come when it will no longer be worth my while to contract with them. At that point, I will stop doing so. As it happens, I believe that many other physicians in situations similar to mine will come to the same conclusions as I, and will also choose to terminate those contracts. The eventual result will probably be that no outpatient primary care physicians will participate with insurance.

At that point, the insurance companies will almost certainly adjust their business model to take the new reality of non-participating physicians into account. With any luck, they will move towards something that looks like actual insurance (think home and auto; coverage only for catastrophic care) and will therefore be considerably less expensive. Who knows; they may even have to make do with less revenue. That's what capitalism is all about, isn't it?

Note what doesn't have to happen: no legislative changes; no change in insurance regulation; no vote; nothing but individuals making their own decisions for their own benefit, granted without taking the overall effect on society into account, but who cares? The essence of capitalistic decisions is accepting that what is good for me might not be good for someone else, and not allowing it to become my problem. After all, if I decided to continue participating with Medicare because "the elderly would be in big trouble if everybody did it" but I then cannot stay in business because of continuing pay cuts year after year, I wouldn't be much good to anybody, least of all myself.

Right now the idea of a cash only practice -- be it fee-for-service or prepaid; so-called retainer medicine -- is just beginning to take hold. I think it is a good idea, and I do believe I will move to it sooner or later. I also believe that many other physicians will come to the same conclusion and take the same action. I see the insurance companies' gradual demise, bleeding from a thousand tiny wounds as each of us divests ourselves of our servitude to them.

Certainly if we could manage to unite and do it in an organized manner, it would happen sooner. Then again, we doctors can never agree on anything, can we? Trying to organize doctors is like herding cats, right? Such a group of rugged individualists would never be able to come together for something like this. But that's ok. It will still happen as one by one, we each come to the same inevitable conclusion.


At Tue Jun 03, 05:36:00 AM, Blogger Steve_Roberts said...

Quote "I believe that many other physicians in situations similar to mine will come to the same conclusions as I, and will also choose to terminate those contracts."

It seems to me that the natural evolution is for doctors to offer their patients insurance plans which properly serve both doctors and patients - that is to upend the pyramid so that the insurance company works for you, not the other way round. Since you have the contact with the patient and can choose which plans to recommend to patients and which ones you will participate in, this is perfectly feasible, especially if you can get together with other like-minded doctors. Go to it !

At Tue Jun 03, 06:54:00 AM, Anonymous Anonymous said...

No. Third party payment, and its moral hazard, is the problem and insurance offered by the physician would be no better in that regard than that offered by BCBS or Medicare. Besides, why would physicians want to get into the insurance business just as its business model is dying?

At Tue Jun 03, 08:33:00 AM, Blogger Resident Anesthesiologist Guy (RAG) said...

It is an unfortunate reality that physicians continue to allow absurd payment cuts, ridiculous regulations from people with absolutely no medical training, and increased malpractice coverage (among a few) because they cannot unite. I don't understand the mentality that to suffer is proof of one's worth. Money is not evil - it’s a necessity in life and docs need to get that through their heads sooner than later if medicine is to survive.

I've been moved towards the retainer medicine front and fee-for-service model of primary care medicine for a couple years now - it makes sense for the doctor and patient - but understood well enough that it would take some time to get a clinic up and going before I could even consider it (so I opted out of primary care).

Many internists are moving into the hospitals and accepting salaried positions. Soon there won't be anyone to take care of patients unless they receive payment up front without insurance contracts (one of the reasons retail clinics seem to be popular right now). Patients absolutely need to wise up about the game their insurance is playing between them and their doctor and forget blaming physicians for healthcare's demise.

What we need is a union - not the AMA or other medical body that doesn't serve its members.

At Tue Jun 03, 10:30:00 AM, Anonymous Anonymous said...

Retainer medicine may work for office visits, but not for anything that involves hospital stays and tests or prescription drugs.

Bills for doctors' visits rarely cross 3-digits, so it is something many would be able to afford. But the cost of tests can easily add up to thousands, even for routine tests if you add numerous false positives; cost of hospital stays - tens of thousands. This is beyond what most families have in their savings -- check out American savings statistics as well as that of average credit card debt.

Even "routine" medical bills add up. Compare bills for even recommended preventive tests /prescription drugs for 50-something to the bills for the routine mantenance of a car. Also, with a car, one always has an option to just buy a new car as soon as the cost of repairs becomes too high.

Additionally, with home/auto insurance the actual incidents requiring insurance to pay even a high 3-digit amount are rare; with home insurance - very rare, so the insurance company doesn't pay that often. The moment something happens, you bill goes up. With medical insurance, stuff requiring one to pay high three digit amount or four digit amount happens a lot more often, especially when one gets older. If medical insurance is run like car insurance, most people over 50 will not be able to get any insurance, even catastrophic one; There'd be no reason at all for an insurance company to even offer catastrophic insurance to those over 50.

At Tue Jun 03, 11:02:00 AM, Anonymous Anonymous said...

The point here is that the comfortable solo or small group primary care practice that all of us would like to have as our "medical home" cannot survive in the current "system." In my opinion, the proposed plan for a Medicare or insurance company sponsored "medical home" makes it even worse. Those doctors who want to provide a "medical home" and those patients who want this type of "medical home" are going to have to leave the "system" very soon. When are our professional "leaders" going to finally realize this?

At Tue Jun 03, 11:38:00 AM, Anonymous Anonymous said...

Back in ancient times, people were expected to pay for their doctor visits themselves; insurance was for extreme situations. At that time, an office visit was much less than $100. At this point in time, office visits in my area are $200 and up. If doctors went cash only, would the price of an office visit go down? I somehow don't think so but I can dream, can't I?

At Tue Jun 03, 12:33:00 PM, Anonymous Anonymous said...

One of the problems with the current system is that (except for your health insurance premiums) the costs are hidden for most of us. I have only found out what things cost when the insurance co. refused a charge.
Unfortunately, I think many in the medical industry have become comfortable with this. Is transparency even possible? When a patient asks "How much?" are doctors willing to give an answer and not hide behind "Oh, don't you have insurance?"
Anyway, it is good that we are starting to talk through this. Maybe, a solution will become apparent.

At Tue Jun 03, 12:43:00 PM, Blogger Bookhorde said...

My dentist now makes me pay up front and lets insurance reimburse me (or, wriggle out of re-imbursing me, as also happens. Argh.)
So, what do you say to the firefighter analogy? (As in, people used to contract firefighters individually, but it really made more sense to have it socialized).
I'm a socialist at heart (can I say that online without getting arrested), so I like that model.

At Tue Jun 03, 12:53:00 PM, Blogger IVF-MD said...

The government took something that people USED to value a long time ago, namely quality medical care, and they persuaded people that it should be regarded as free. People tend to devalue things that are free, whether it be oxygen, public education, medical care or network TV. If more doctors have the courage to do what you are proposing, then there is hope that medical care might have value once more. Good luck!

At Tue Jun 03, 01:16:00 PM, Anonymous Anonymous said...

I think it's going to take time to educate the population of healthcare "consumers." I live in a rural community and there is one family doc who runs a cash-only practice. I think she's making it financially, but I've had a number of patients transfer from her practice because they did not grasp the pay-up-front concept.

It's hard for individuals to get on board with the cash-only practice at this point because they are already paying for their insurance premiums. Despite this, I believe you may be right about the cash-only trend taking hold.

At Tue Jun 03, 02:52:00 PM, Blogger IVF-MD said...

At first thought, one might be tempted to be pessimistic, thinking that if I am so strict with my cash-upfront-only policy, then patients will just go elsewhere where they are not so strict. But what if you can draw on your creativity to offer some quality or excellence of customer service that the others can't (or won't bother) to provide. THEN, patients will have a choice and enough of them will want what you offer so as to keep you happily running. The trick is in finding out what they want from you so badly that they are willing to pay you what you deserve.

At Tue Jun 03, 04:11:00 PM, Anonymous Anonymous said...

1. There are several models of cash practices. The retainer model is only one.

2. Whether straight cash for service or retainer, no one pretends this will cover catastrophic care. That's a proper role for insurance, a high deductible plan with an independent HSA.

3. Docs don't have to unite for this to happen. It'll happen because it makes sense for us and our businesses, not because of some united movement.

4. When this gets going, the smart practices will offer transparency in pricing to attract patients.

5. Some patients will go elsewhere, but with insurance pushing down pay to PA levels and Medicare's enormous unfunded mandate keeping it from improving generalist pay, the options elsewhere will be a PA, a NP, the ER or a long wait to see a physician. That and the chance for cost savings by removing the middleman will drive patients to HSAs and cash practices.

At Wed Jun 04, 12:28:00 PM, Anonymous Anonymous said...

That time is now. Make the change already. I'm a student and I will open my retainer practice fresh out of residency, even with my $200,000 in loans.

start here:

At Wed Jun 04, 11:23:00 PM, Anonymous Anonymous said...

Specialist’s are earning 2:1 over the primary care physician. On average, specialists are earning near $300K while the PCP earns roughly $150K, sometimes LESS! Do you know why?

It doesn't make any sense considering there are more ICD-9 and CPT codes available in the primary care setting. It's because the U.S. Healthcare System has changed… it has “moved” money away from office visits and therapy, and shifted it towards patient outcomes. Reimbursements are down, costs are rising! As a result, physicians who continue to operate as they have in the past are feeling “financially” squeezed! In attempts to offset their losses many are working longer hours seeing more patients, while earning less. They are also trying to reduce nonessential services and overhead by working with fewer people, in less space. Then there are some who are choosing to decline services due to capitation issues. None of this helps! Do you know why?

Because the Healthcare System knows most PCP are “flying under the radar” by operating in “waived” settings and avoiding the responsibilities that accompany providing quality care. The money has been moved to three main practice areas- diagnostics, imaging/radiology, and clinical lab. The idea behind the shift is to improve patient outcomes by placing money as an incentive for PCP to uncover asymptomatic illnesses before they become chronic and cause catastrophic costs to the overall system.

The trick is to align your practice within the changes that have taken place in the healthcare system. By align your practice, I mean according to your specific patient base and data requirements to ensure the additional revenues generated will greatly exceed the cost of change. (e.g. If you are seeing 3 elderly patients per week with dizziness symptoms, I can give you the Medicare issued ICD-9 code & CPT code that reimburses $450 per procedure. Buying the proper box costs $700 per mo. So figure an increase of $5200!) This is just one example of what I'm talking about. The problem is- every situation has specific needs! I can't say this is best for you, but I can tell you there are 100s of these. It's just a matter of knowing what to do for your specific patient base and volume requirements.

Trust me when I say this, almost every PCP practice seeing 25+ patients per day, including the solo practitioner can increase their income by $125,000.00. It's just a matter of OPTIMIZING their practice!

At Wed Jun 04, 11:38:00 PM, Anonymous Anonymous said...

After reading my little blog there, I don't see my url so if you'd like to discuss how to optimize your practice based on your specific patient base and volume requirements, it doesn't cost a dime! No fees, No gimmicks!

At Thu Jun 05, 11:04:00 AM, Blogger Bookhorde said...

I've been thinking about this more, and I realized that when I didn't have insurance, back in the old country, and had to pay up front, I didn't go to a doctor for preventative medicine. Never had a PAP smear, none of that. Just went in if I had been sick for at least a week.

At Thu Jun 05, 11:31:00 AM, Anonymous Anonymous said...


When some one starts peddling something and finishes with 'no fees, no gimmicks' it means the opposite. Being a physician is not about maximizing each patient complaint to the fullest you can bill, it is about them and getting them to their healthiest - even if it means billing less than you could have. Medicine is a business, but not that much of a business as you push.

You make me sick.

At Thu Jun 05, 04:19:00 PM, Anonymous Anonymous said...

I am a nurse(30 years)I worked for a hospital for 25 and sold out to work for an insurance company 5 yrs ago for the monday thru friday gig.This company has made 6-8 Million dollar proffits every year, we get a bonus tied to that and they have raised premiums by double digits every year.Dr Dino your idea will work and drive these Ba$t@rd$ out of business.Keep up the good work and ideas!

At Fri Jun 06, 04:38:00 PM, Blogger Doc said...

Your idea will work, unless socialized medicine is forced upon doctors. I will be leading the local call to unionize (illegally), or leaving the country at that point.

BTW, If you wish, I know a person, who knows a person who can help you make millions in the hot Florida Waterfront market....

At Sat Jun 07, 02:34:00 PM, Blogger Diane J Standiford said...

I paid into co. ins. plans every two weeks for almost twenty years and never saw a Dr. ONCE. Somebody got the use of that money. Not me. Healthy people are the forgotten variable and we just get screwed.

At Sun Jun 08, 12:08:00 AM, Anonymous Anonymous said...


I am totally with you, and treat medicine as a business. Afterall, you think your landlord will give you a "discount" or waive your rent because you could not make ends meet? I think we all need to live in reality, and not the idealized medicine that used to be.


What you propose is happening daily, including in my practice. How did I learn about it? I visited other practices and found that they have long dropped the crap insurers and take no new Medicare patients! Imagine that!

It's just a matter of survival.

This is truly the American way and quite Darwinian, I might add. The poorly run medical practices (those that don't collect their copays and deductibles up front, leave money on the table, don't learn how to code/bill, have no idea about patient demographics, etc.) go out of business, and those that remain run happy and profitable practices.

Sad to say, but physicians who are not good businessmen/women are been weeded out in our current medical economic model not because they are bad physicians, but because they are poor businessmen/women.

At Tue Jun 10, 12:35:00 AM, Anonymous Anonymous said...

I agree that insurance should only be used for catastrophic medical bills. It is not there to pay for 'routine' stuff, just as car insurance does not pay for oil change and 30K, 60K maintenance.

I think what we need is a single payor system and single electronic medical record system.

At Sat Jun 14, 08:22:00 PM, Blogger Joeymom said...

I grew up with a cash-only doctor. He didn't even take credit cards. Cash. He took walk-in patients, but if you had an appointment you were ALWAYS seen on time. Lots of folks around here cannot afford insurance (small business owners, self-employed, farmers, etc.) so his practice was a godsend. If he couldn't handle your case, he referred you to the best specialist in town, period. His idea was that most of these people would be paying cash, so why pay that money for less than the best. It wasn't like the not-so-great people were going to give you a discount.

At Tue Jun 17, 11:11:00 PM, Anonymous Anonymous said...

Why not just move to a civilised country? :-P


Post a Comment

<< Home