Now this is the type of innovation that excites me. These cash-only doctors have moved to a membership-based model that allows them to provide higher quality care at much lower costs and they don’t have to deal with insurance companies any longer. This sounds fantastic:
FOX 8 – Fed up with declining payments and rising red tape, a small but growing number of doctors are opting out of the insurance system completely. They’re expecting patients to pony up with cash.
Some doctors who have gone that route love it, saying they can spend more time with and provide higher-quality care to their patients. Health advocates are skeptical, worrying that only the wealthy will benefit from this system.
In Wichita, Kansas, 32-year old family physician Doug Nunamaker switched to a cash-only basis in 2010 after taking insurance for five years. (“Cash-only” is a loose description. Nunamaker accepts payment by debit or credit card too.)
Under the traditional health insurance system, a large staff was required just to navigate all the paperwork, he said. That resulted in high overhead, forcing doctors like Nunamaker to take on more patients to cover costs. Plus, the amount insurance companies were willing to pay for procedures was declining, leading to a vicious cycle.
“The paperwork, the hassles, it just got to be overwhelming,” Nunamaker said. “We knew that we had to find a better way to practice.”
So Nunamaker and his partner set up a membership-based practice called Atlas M.D. — a nod to free-market champion Ayn Rand’s book Atlas Shrugged. Under the membership plan — also known as “concierge” medicine — each patient pays a flat monthly fee to have unlimited access to the doctors and any service they can provide in the office, such as EKGs or stitches.
The fee varies depending on age. For kids, it’s $10 a month. For adults up to age 44, it’s $50 a month. Senior citizens pay $100.
The office has negotiated deals for services outside the office. By cutting out the middleman, Nunamaker said he can get a cholesterol test done for $3, versus the $90 the lab company he works with once billed to insurance carriers. An MRI can be had for $400, compared to a typical billed rate of $2,000 or more.
Nunamaker encourages his patients to carry some type of high-deductible health insurance plan in case of an emergency or serious illness. But for the everyday stuff, he said his plan works better for both doctor and patient.
Nunamaker now has a patient list totaling 400 to 600, compared to the 2,500 to 4,000 he said a typical family physician usually maintains. He’s quite happy with his annual salary of around $200,000.
“My professional life is better than expected, my family life and personal time is better than expected,” he said. “This is everything I wanted out of family medicine.”
It’s believed that only a small number of doctors have switched to a cash-only model. The American Academy of Family Physicians said about 4% of respondents to a 2012 survey reported taking only cash, up from 3% in 2010. A Medscape survey found 6% of physicians in the cash-only business in 2013, up from 4% in 2012.
Most are primary care doctors, though not all.