Health insurance is a great thing in the event of a catastrophic accident, or even one trip to the ER. Health insurance is a great thing if you can afford it, and it actually does something for you. I have been so fortunate all my life to have been fully covered by insurance, under my parents and then as a spouse to a federal employee. But this is not the case for millions of people. Many people have insurance, but with a high deductible, so it doesn’t really pay for anything until that deductible is met. It could be a $3000, $5000, or $10,000 deductible, with monthly premiums of $600+! Many high deductible plans will cover one preventative wellness screening by a Primary Care Provider, but that’s about it.
In the world of Dermatology, private health insurance doesn’t pay for much unless 1: Deductible is met, and 2: It is medically necessary (bleeding, painful, extremely itchy). When people come in for a full body skin exam, that is not a covered preventative screening. When a person comes in to have a wart frozen or a mole removed, that will not be covered unless the deductible is met. So much in dermatology is not covered, and patients don’t know that this is the case until they receive their bill 3 months later. Then, enough time has passed that they have forgotten why they even went to the dermatologist, and were charged for every single complaint they brought up and every single treatment they received. Surprise! Your insurance didn’t pay for any of it, and now you owe the clinic $300+ dollars, which will go toward your deductible. Because the clinic billed your insurance first, you will be charged at the highest rate. Does this sound familiar?
Because of the current state of medical law in this country, medical offices have to charge top dollar for everything, just to cover the costs of overhead (supplies, billers, coders, administration, support staff, receptionists, etc), because reimbursement is actually fairly low for providers. I’ll repeat…reimbursement for all the work your favorite provider does on your behalf, they collect maybe 40%! I had an epiphany one day when I learned my that window cleaner makes more than I do! And I have three college degrees! The business of medicine is so strange. No where else in business is someone asked to perform a service, not be paid for it for 3 months, has to negotiate how much they will get paid, and is not being reimbursed fully! But medical providers are hamstrung into doing this as practice model. And it’s unsustainable for the small, independent practices.
Enter a different way of doing medicine (or an old fashioned way, however you want to look at it)…The Direct Care Model. With this model, the provider is not contracting with insurance companies, and is considered “out of network”. Prices are set as a Cash Price, which is a discounted rate in most medical offices. This creates a relationship between the patient and provider that is much like any other service industry. You have direct access to your provider, you receive a service, and then you pay at the time of service. It’s like getting your hair trimmed, or your nails done, you then pay your beautician, and go on your merry way. You know how much you’ll pay up front, with no surprises three months later. This is a more transparent way to do medicine, without all the back and forth negotiating with insurance companies to be paid.
Is it a hassle for some people? Yes, especially when they are used to the traditional medical model and want to use their insurance. Will it save you money in the long run? Yes, because I charge a flat discounted rate. This model is ideal for uninsured patient, high deductible patients, and those with flex spending accounts/health saving accounts. Plus I’m not out to nickel and dime every single problem you bring up. There are less expensive ways to do medicine, and that’s how I practice. Now, I will probably get flack from my peers about that. But to me, it comes down to ethics, and I believe with this model, I’ll be a part of the solution of health care, and less of the problem.
If you want to learn more about health insurance over the course of about 50 years, and the introduction of 3rd party payers, watch this video from CNBC. It’s very informative and unbiased.