Cash Pay Physicians – Alive and Well

A physician recently approached me to help him provision his new practice.  To better understand his objectives and business model, we sat down to discuss the practice and a whole lot more.  Medication dispensing was one element, but even more interesting was his decision to start on a cash-pay basis.  As our conversation progressed, a very interesting story emerged.

This man is an orthopedic surgeon and an immigrant.  He moved his family to the United States from Colombia four years ago.  Since coming to the states, he has focused on general medicine and came to believe that he could build a practice by serving the uninsured and patients focused on market-based options for care.  As we discussed medical supplies, pharmaceuticals and his experiences in Colombia, I realized that there are lessons for all of us in his story.

He characterized the Colombian health system as “socialized managed care”.  The Colombian system privatized to a few health insurance companies a number of years ago.  Through a bid process, the government basically outsourced the health care reimbursement system to a couple of payers.   The resulting system put severe downward pressure on physician incomes and very tight controls on how physicians practiced medicine.  He watched as his practice became less and less profitable. Eventually, he was forced to close because reimbursements dropped below the overhead required to manage the practice – he could no longer stay independent and staff physician pay was very low.  He says Colombian health care is now burdened with long waits; in many cases outlasting the patients waiting for life-extending procedures.  After nearly 20 years of practicing in Colombia, he made the decision to uproot his family to make a fresh start in the United States.

His view now?  We have our challenges with our system but it is nothing like what he left.  His hope is that a balance will be reached between care and capitalism that will allow patients and providers to get what they need from the health care system.  As for his new practice due to open next week, he plans to focus on the under-served and offer below market rates to uninsured patients.  He feels he can charge far less than a managed care procedure because he is not burdened with the incredible overhead of payers and large health systems.

As we work to set up his office, I wonder about the future of American health care.  Is this the future?  A return to a past that allowed patients to choose their doctor regardless of health plans and to pay for services as they used them.  As a market-driven practitioner, he is providing pharmaceutical dispensing services, a wide-variety of procedures as well as tests and products.  His practice will be “full service” in a variety of ways and make it possible for patients to receive one-stop health services.

As for me, a denizen of a hospital-managed health program, I think the next time I need a procedure, I will pay a visit to my new friend and see what the market says I should pay for it.  Perhaps I’ll find that the complex web of co-pays, deductibles, monthly premiums and exclusions will make his model the better deal. 

For more thoughts on cash-pay practices, take a look at this link on Ezine @rticles.

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