3/16/2013

More Physicians Abandoning Insurance And Going Cash-Only

It's been no secret that medical professionals have nothing good to say about ObamaCare, knowing it for the inertia-laden anti-medical care bureaucracy that it is. Is it any wonder more doctors are abandoning medical practices that take insurance and switching over to cash-only direct primary care medical practices?

Direct primary care is part of a larger trend of physician-entrepreneurs all across the country fighting to bring transparent prices and market forces back to health care. This is happening just as the federal government is poised to interfere with the health care market in many new and profoundly destructive ways.

There are a number of advantages to such practices, the biggest being the elimination of all of the bureaucratic paperwork that adds tremendously to the cost providing care and tends to make it nearly impossible to know the actual cost of providing care. Without that kind of information there's no 'market' feedback and costs spiral. Even routine care costs are far above the actual cost to provide that care. It also tends to drive practices to push physicians to see as many patients as is possible in the shortest amount of time, meaning doctors can't take the time to spend with patients needed to properly diagnose and treat illnesses. It all become about process, not unlike a factory. This is no way to practice medicine.

Dr. Lisa Davidson had 8 years of frustration while running a successful traditional practice in Denver, Colorado. She had 6,000 patients when she decided to stop taking insurance and adopt the same business model as [other cash-only practices]. Her patient list has dropped to about 2,000. She used to spend about 15 minutes with each patient and now it's more like 45 minutes. "We're on track to make more money and take better care of our patients," says Davidson. "It's a win-win all around."

Before adopting direct primary care, Davidson was unhappy working at the practice she had built because the insurance system imposed a way of doing business that resembled an assembly line. "It's true that in 2014, many more people will have insurance, so there will be a profound need for primary care doctors," says Davidson. "You might say I've done a disservice by dramatically cutting the size of my practice. However, if we make it desirable again to be a primary care physician more people will want to do it."

If we need any any proof that cash-only practices are less expensive than traditional practices that take insurance, there are two specialties that aren't usually covered by medical insurance because almost all of the procedures they perform are elective: cosmetic surgery and LASIK.

Cosmetic surgery is almost always elective, the exception being post-trauma or post-cancer reconstructive surgery. Because plastic surgeons must compete for patients they try to keep their costs as low as is practical, otherwise they can price themselves right out of the market.

LASIK is also elective, a surgical procedure used to correct vision and eliminate or reduce the need for wearing glasses or contact lenses. Again, surgeons performing this procedure must keep their costs in line otherwise they will lose patients to other less expensive practices.

If you need proof that they are market driven, consider the fact that the costs of both have been dropping while costs of other medical specialties have skyrocketed.

And then, there's this:


It goes to show that unlike many other industries, there is no incentive for hospitals and large medical practices to be efficient because they can jack up the price of what they'll charge to the insurance companies. ObamaCare will only make this worse.