Today I read an article on CNN Business regarding the small but growing change in physician practices from traditional insurance-accepting businesses to cash-only practices. Hooya! I love it when a person can run a business how they chose. The article highlighted two primary care doc’s and one general surgeon. It talked about how each came to adopt a business model that is a cash only practice from one that accepted insurance. Their reasons were everything you’d guess them to be, from insane hassles with insurance companies, lower payouts, higher overhead costs just to hire people who can siphon through all the paperwork required to file claims, etc. Each of the doc’s recommended their patients have a high-deductible insurance policy to help cover potential costs outside their scope of practice such as serious or catastrophic illness/injury. Ultimately the doc’s who switched get to spend more quality time with each patient, lower their overhead, eliminated the hassle of dealing with insurance, and were happier over all in both their practice and their personal lives. Win-win for everyone!
Then they interview this woman, Kathleen Stoll, who is the director of health policy at the consumer advocacy group Families U.S.A. This woman’s argument against this type of practice was, and I quote: “They cherry-pick among their patient population to serve only the wealthier ones.” THAT’S YOUR ARGUMENT? That’s what business is, moron! That’s what makes people who run businesses, medical or otherwise, successful! Do you think the company that sells Lamborghini’s or Maserati’s are marketing their product to the average “Joe”? Hello no! You have Ford, and Chevy to cover that market.
She then tries to make the argument that perhaps the patients are being put at some higher risk. Um, excuse me…being a cash-only practice doesn’t make a physician exempt from providing the standards of care set forth by the various certifying entities (OSHA, JHACO, etc.) any more than Lamborghini can manufacture a vehicle without seatbelts.
Whether the business is medicine, cars or even food, it's no different. Burger King has to follow the same rules set forth by the department of public health as Ruth’s Chris does, but you know what? Ruth’s Chris “cherry-picks” among the population to market their product to the ones who can afford to eat there. There’s nothing wrong with that. Ever.
Of course, I still can’t afford a Lambo…
6 comments:
Yes Yes Yes! I agree. A doctor should be able to choose to cater to people who can afford their services. He will decrease the number of patients he has but never has to worry about getting paid... and he has time to give his patients the attention they deserve and pay for!
Okay, I agree with the premise of your argument, but the comparison is off.
We accept both cash pay and insurance. We MUCH prefer cash and even offer a discount because we don't have to deal with billing. That said, if we offer too big a discount, insurance companies will pay us less in the future, assuming the lower price is closer to our true cost. The insurance company and the hospital is where the big scams are occurring. The hospital is bigger so they can negotiate with the insurance for higher reimbursement. We're small potatoes so we get what they give us. It costs about 1/3 to get an MRI with us than it does in the hospital, but we're not allowed to advertise our price. Same level of care - less money.
If we could go to a cash only business, we'd do it in a heartbeat. The problem is that most people can't afford the $500 fee for the MRI, but since they have insurance from work or the forthcoming ACA (Obamacare), that's the only way it will work.
-DrC
Furthermore, there is no way for us to cherrypick our patients. They either have insurance or can afford to pay cash. If we went to cash only we'd have to raise our rates because we'd have less patients, but you charge what the market will bear. We operate on margins as it is. A single MRI machine can cost $2 million plus as much as $10,000 per month for a service contract. And that equipment has a life span of about 5-7 years. You have to build a cash reserve for normal replacement. It's almost impossible to do that as is.
Thanks, Minge!
All valid points, Chuck. Admittedly the article was very short and I would have liked more detail. I think their practice(s)are a very different animal than a radiology practice. They did mention briefly that they work with radiology/lab firms to negotiate for their patients to get a better cost for tests, but again, they didn't talk to any radiology firms who were going that route.
My points were more about the ignorance of the woman who was arguing that they shouldn't be allowed to do it because the standard of care might be lower, and that they could pick who they market their business to, more than the plausability of a successful practice with a cash-only business model.
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