Cash Money Medical Care

Every pundit in the land has his own diagnosis for the health care crisis du jour (pardon the French). Very often the diagnosis is a lack of adequate health insurance and the solution is more health insurance.

Perhaps this health insurance fever is the wrong diagnosis and what we really need is less insurance – not more!

Vern Cherewatenko, M.D., has reinvented this wheel. For which we should all be grateful. For this particular wheel – the quaint notion that patients might pay their doctors directly in exchange for the best service at the best price – has been sorely in need of reinvention.

Dr. Vern, a Seattle physician who once owned five paperwork-smothered family clinics and who ended up in professional and personal bankruptcy, calls this new wheel "SimpleCare" ( http://www.simplecare.com). It saved his career.

Patients love it.

And the success illustrates a fact of health care life that the HMOs, insurance companies and bureaucrats don't want you to discover: A lot more wheels can be reinvented ... once we break the "Big Business and Big Government and Brainy Experts Are the Only Answers" mindset.

Four years ago, Dr. Vern's clinics were treating 75,000 patients a year. They were also losing nearly a million dollars a year. Inadequate reimbursements from insurance companies, rising overhead and – most of all – the escalating administrative and paperwork costs were destroying his life's work.

Then Dr. Vern and his partner, Dr. David MacDonald, had their epiphany. Make the patient, not the insurance company, the real customer again. So they set out to design and implement a system that would eliminate the cost and hassle of dealing with these bureaucratic sludge factories.

Under most present medical "insurance," the doctor and his staff spend seven minutes of administrative time to make proper records, code and bill for every minute of patient care (not even counting additional time when the insurance company denies or delays payment). Under the SimpleCare approach, there's no billing, only payment at time of service, and this ratio is reversed.

Most patients have never heard about "coding" or the thousands of CPT (Current Procedural Terminology) billing codes describing different medical services which the doctor has to put down on the insurance company paperwork. Insurance companies like these numbers because a clerk can punch them into a computer and identify what the company pays for the service.

There are also thousands of ICD-9-CM diagnosis codes to describe the diagnosis. Plus MDC, DRG, CMS, DSM, GMLOS, AMLOS and RW numbers.

This alphanumeric zoo has caused creation of a new administrative medical subspecialty profession, the "coder," a person dedicated to digging up and writing down the Gestapo-correct code.

Few remember the times before World War II when fewer than 1 out of 10 Americans had ANY health insurance or medical plan other than cash. Some few remember when health insurance benefits became exempt from corporate income tax in the 1940s, meaning that a company could purchase health benefits for employees with before-tax dollars.

Both labor and management loved the idea of income-tax-free benefits, partly because income tax rates went up to 91 percent at the time. Today, about 85 percent of Americans now have some form of this "insurance."

But what we have come to call medical "insurance" isn't traditional insurance at all. It's actually pre-payment for a potentially limitless array of medical services, depending on need. Which means that those who get paid in advance to do nothing have every incentive to do exactly that and to deny or minimize care whenever possible.

When he started using the SimpleCare approach, Dr. Vern had three codes, Short, Medium and Long, for the length of the visit (10, 20 or 30 minutes, $35, $65 and $95), plus reasonable fees for specific procedures. Patients with insurance can then get reimbursement from their own insurance company.

Cash works because the patient has the incentive to get the best value for the money. And the doctor knows he has to provide the best value or he won't see that patient again.

"Ah yes," we can hear you saying, "all very fine for routine care or minor scrapes. But what about the big stuff?" To quote the president who supported and signed the original HMO Act of 1970: "I'm glad you asked me that question."

SimpleCare, or any of the variants now spreading across the country, does not take the place of all medical insurance, especially high-deductible medical insurance, as Dr. Vern preaches. This insurance starts paying when your medical spending gets over the deductible limit, typically several thousand dollars.

So tend to your high-deductible insurance, by all means. SimpleCare does not replace it. However, SimpleCare points toward further "unbundling" of health care services.

As most individuals and families have only routine medical care in any one year, they average saving hundreds and thousands each year when they buy high-deductible medical insurance and pay cash for routine services. Millions of Americans rediscover this truth for themselves when they start their own businesses and pay for their medical insurance and care themselves.

You can use the SimpleCare approach whenever you want to pay cash for a service, even if the doctor doesn't know about SimpleCare. We recommend you tell your doctor that you want to pay cash and that you do not want any insurance billing. Then ask the doctor for his "best price" for his medical services only, not including insurance or delayed billing services.

Remind the doctor that he won't have to wait months for payment or go through hassles with an insurance company. Many doctors respond with fees 20 percent to 50 percent lower than they charge for a combination of medical and billing services.

In the meantime, when you're frustrated with the excessive bureaucracy of medical care, think "Cash And Carry."

For most families – in sickness and in health – less insurance is better than more!

Michael Arnold Glueck, M.D., is a multiple-award-winning writer who comments on medical-legal issues. Robert J. Cihak, M.D., is a past president of the Association of American Physicians and Surgeons.

Contact Drs. Glueck and Cihak by e-mail.