Why we need
For years insurance companies have obtained significant discounts
on physician fees that are not available to patients. This means that when
you, the cash paying patient, have services you are paying the full
charge. Thus the individual patient with limited resources, pays more than
the big insurance plan. It is not a fair system.
Doctors don't like the current system either. The
insurance plans determine payment levels for doctors. Looking out for
doctors is not in their interest. The insurance plans have to serve the
needs of their paying customers - typically employers. When they set fees and
payment rules they have to be very restrictive. Physician services are
like a commodity where the market has determined some minimum payment that every
doctor must accept - via insurance payments.
For a doctor who wants to spend more time with patients, or to
provide better service through increased staff (faster phone answering, Nursing
care over the phone, personalized letters to you, etc) or with a nicer space for
you to be treated in, or any number of other improvements, they find that the
economics work against them. The insurance-based reimbursement system
today limits their ability to provide a better service and command a better
price for those of you who desire something better.
Staffing and other expenses to deal with payment processes,
computers, insurance companies, and regulations eat up 15% of the revenues of a
primary care office. This is a source of frustration for all
Cash paying patients eliminate most of this cost.
When an employer pays for health insurance for their employee
about 15% of their bill is absorbed by the overhead required to simply run the
insurance plan, the employer benefits administration, etc. Add that to the
15% spent by the primary care doctor and we see that there is a huge opportunity
to reduce the total cost of health care. Much of that cost has probably
been well-spent. Insurance plans secure a better charge structure, work to
limit utilization, and verify that an individual is covered. Eventually
these elements should be worked into the cash paying structure. Medical
Savings Accounts may be part of that answer.