An estimated 50 million Americans pay cash for physician visits. Many are uninsured or have health insurance policies with high deductibles. Largely as a result of excessive administrative costs associated with processing insurance claims, specialised medical services have also sprung up to meet the needs of these patients.
Analysis of a large, high volume, multi-location physicians’ practice highlighted a common problem found in many practices. Insurance companies’ average reimbursement for an office visit was just over half of listed prices. Nonetheless, extensive paperwork was required to process claims from patients visits resulting in enormous overhead expense. As a result, a team of physicians decided to streamline a bureaucratic, unprofitable practice to accept reduced cash payments rather than bill a myriad of insurance companies. The physicians called their programme SimpleCare and the results have been impressive:
Patient billing is much easier, requiring none of the verification of insurance plan conditions and coding under managed care. This allowed the practice to reduce the base price of a physician visit to less than average insurance reimbursement. Patient visits are as long in duration as needed and fees are based upon the amount of time spent with the physician.
Source: Vern S. Cherewatenko, The SimpleCare Story, Health Care News, February 2002, Heartland Institute, 19 South LaSalle No. 903, Chicago, Ill. 60603, (312) 377-4000.
For text http://www.heartland.org/health/feb02/simple.htm
For more on Health Care Administrative Costs http://www.ncpa.org/iss/hea
FMF Policy Bulletin\26 February 2002
