I often post on Sermo, an online physicians community. I have been asked to comment on parts of my transition to a cash practice:
Why did I choose to take the risk of alienating patients by refusing to work with insurance?
Look closely at the question.
Risk? I look at it as being more risky to my patients, my practice and my profession if I continued to participate with insurers. My job, first and foremost is to my patients. I have mentioned in previous posts and blogs that my father was a family doc. He always put his patients first. “Treat your patients like you would want to be treated, or how you would want your family member treated. Always remember without patients, you have no practice and no career.” I have always practiced by these values. I do not worry about the finances of my practice when I am with a patient. If I do right by my patients and have their trust, there is no need to worry. The practice will do fine!
Alienating patients? I treat patients not their insurance. Every patient I have is an individual, not an insured member, and not a capitated life. If patients choose to leave my practice, it is their choice to leave. I have not discharged one patient from my practice. The patients who have chosen to remain value my practice and the care they receive. Those that do not value my services will go elsewhere. What is the old adage, “You get what you pay for?”
Refusing to work with insurance? I have never worked for insurance. I always work for my patients. Insurance just gets in the way. In the past , how did insurance help me to care for my patients?Oh yea, I remember how! With managing referrrals , preauths, precerts formularies, etc. All of those office tasks were very helpful to my patients and my practice. And the insurance premiums kept going lower and lower, right?????
Saturday, April 12, 2008
Saturday, April 5, 2008
1st quarter 2008 transition to cash practice
January-March 2008 transition to Cash Only + Medicare Solo physician, suburban practice, large HMO penetration. Conversion to cash practice, Medicare, and Wellness-Retainer model at affordable market based prices. January and February’s numbers contained some old insurance money and is included in percentages given. Also 2 insurers remained thru part of January due to their contractual terms that I chose not to fight as it only set me back a few weeks. But February and March had little if any old insurance money and was very low compared to January.
------------------------------------------------------------------------------------------------- Comparisons given below are percentages comparing Jan-March 2008 to January-March 2007.
Patient Volume decreased by 40%
New patients seen decreased by 50%
$ per patient seen DOUBLED
Revenues increased by 18%
------------------------------------------------------------------------------------------------ More Analysis:
$ per patient visit for 1st quarter 2007 was $63.40
$ per patient visit for 1st quarter 2008 was $128.00
My practice has multiple payment options for patients. These range from selfpay, to Medicare, to Wellness and retainer options. More info on how these options differ can be found by clicking here.
The breakdown is patient visits is as follows:
Selfpay 40%
Wellness 20%
Medicare 20%
Old Insurance-Ancillary 18% and dropping
Retainer 2%
The breakdown in % revenues per patient visits is as follows:
Wellness 35%
Selfpay 29%
OldInsurance-Ancillary 25% and dropping
Medicare 8% and slightly rising as we wait for money to come in and deductibles to be paid.
Retainer 3%
$ per patient visit is as follows:
Wellness $289
Retainer $244
Selfpay $95
Medicare $40 - but waiting on billing-collections-deductibles
Other-ancillary $38 - these are quick 5 minutes visits overseeing a Naturopathic doc.
------------------------------------------------------------------------------------------------ Further analysis: A good percentage of revenues came in from Wellness Plan fees, which is upfront money. This may skew the numbers at the beginning of the year. My job is to market my office to new Wellness patients throughout the year. If I do not get these new Wellness patients, the revenues will slow.
Selfpay averaging $95 per visit. That is $32 more per visit than I received last year, or a relative increase of 33%. Also I have more time open in my schedule to fit in these patients, as I am not seeing the $10 copays or capitated patients.
Medicare averaging $40 per visit. This is skewed as I am waiting for payments to come in. But why should I have to wait? And why should I have to pay a billing specialist to get the money that I earned? Even if this number goes up to $65 per visit , it is still much lower than the selfpay, and a pittance compared to Wellness and Retainer.
-----------------------------------------------------------------------------------------------
I have had a good number of patients leave my practice due to the dropping of insurance. Some have been nice about it and understanding, and some have been downright rude and insulting. So be it, i do not take it personally. Each patient may make their own decision. I am still available to anyone who wants my services, they just have to be willing to pay me directly for my services, which are priced at an extremely reasonable rate.
The feedback I have received from the patients who have remained has been terrific. While they wish they could pay me less, they have all been happy with the type of non-hurried care they recieve. They can get appointments same day. We have time to help them coordinate their care with specialists. All things that were difficult in the old-insurance driven model.
------------------------------------------------------------------------------------------------ Other Good Effects: Expenses have gone down. My medical billing expenses have been slashed by at least 75%. I have eliminated one medical assistant during my day hours, and went from two to one medical assistants during evening hours. I anticipate my payroll expenses to be slashed by about 25-30%. For other good effects for my patients please see my blog post of 2-20-2008.
------------------------------------------------------------------------------------------------ My goal is to get to about 1000 patients in my practice, instead of the average of 2500 in my community. If I can get 50% and up in the wellness and retainer plans, my revenues will be higher, and patient care will be much improved.
I call that a Win-Win!!!!
------------------------------------------------------------------------------------------------- Comparisons given below are percentages comparing Jan-March 2008 to January-March 2007.
Patient Volume decreased by 40%
New patients seen decreased by 50%
$ per patient seen DOUBLED
Revenues increased by 18%
------------------------------------------------------------------------------------------------ More Analysis:
$ per patient visit for 1st quarter 2007 was $63.40
$ per patient visit for 1st quarter 2008 was $128.00
My practice has multiple payment options for patients. These range from selfpay, to Medicare, to Wellness and retainer options. More info on how these options differ can be found by clicking here.
The breakdown is patient visits is as follows:
Selfpay 40%
Wellness 20%
Medicare 20%
Old Insurance-Ancillary 18% and dropping
Retainer 2%
The breakdown in % revenues per patient visits is as follows:
Wellness 35%
Selfpay 29%
OldInsurance-Ancillary 25% and dropping
Medicare 8% and slightly rising as we wait for money to come in and deductibles to be paid.
Retainer 3%
$ per patient visit is as follows:
Wellness $289
Retainer $244
Selfpay $95
Medicare $40 - but waiting on billing-collections-deductibles
Other-ancillary $38 - these are quick 5 minutes visits overseeing a Naturopathic doc.
------------------------------------------------------------------------------------------------ Further analysis: A good percentage of revenues came in from Wellness Plan fees, which is upfront money. This may skew the numbers at the beginning of the year. My job is to market my office to new Wellness patients throughout the year. If I do not get these new Wellness patients, the revenues will slow.
Selfpay averaging $95 per visit. That is $32 more per visit than I received last year, or a relative increase of 33%. Also I have more time open in my schedule to fit in these patients, as I am not seeing the $10 copays or capitated patients.
Medicare averaging $40 per visit. This is skewed as I am waiting for payments to come in. But why should I have to wait? And why should I have to pay a billing specialist to get the money that I earned? Even if this number goes up to $65 per visit , it is still much lower than the selfpay, and a pittance compared to Wellness and Retainer.
-----------------------------------------------------------------------------------------------
I have had a good number of patients leave my practice due to the dropping of insurance. Some have been nice about it and understanding, and some have been downright rude and insulting. So be it, i do not take it personally. Each patient may make their own decision. I am still available to anyone who wants my services, they just have to be willing to pay me directly for my services, which are priced at an extremely reasonable rate.
The feedback I have received from the patients who have remained has been terrific. While they wish they could pay me less, they have all been happy with the type of non-hurried care they recieve. They can get appointments same day. We have time to help them coordinate their care with specialists. All things that were difficult in the old-insurance driven model.
------------------------------------------------------------------------------------------------ Other Good Effects: Expenses have gone down. My medical billing expenses have been slashed by at least 75%. I have eliminated one medical assistant during my day hours, and went from two to one medical assistants during evening hours. I anticipate my payroll expenses to be slashed by about 25-30%. For other good effects for my patients please see my blog post of 2-20-2008.
------------------------------------------------------------------------------------------------ My goal is to get to about 1000 patients in my practice, instead of the average of 2500 in my community. If I can get 50% and up in the wellness and retainer plans, my revenues will be higher, and patient care will be much improved.
I call that a Win-Win!!!!
Sunday, March 16, 2008
Leveraged Healthcare
Healthcare in America is changing.
The past ten years the change has not been for the better.
Demand has increased.
Supply has shrunk.
Why is this?
Health insurance has given patients access to physicians for copayments as opposed to true market fees. This is leveraged care at its finest.
The demand for primary care has gone up exponentially. But the respect we receive as physicians has shrunk.
Could the low copays have anything to do with it?
Is this good for our system?
I say No!
The present system will fail soon.
A good analogy is todays housing market and the subprime mortgage debacle. Homeowners paid very little for homes they thought they could afford. But the housing bubble artificially inflated the value of their homes. When the bubble burst, and when interest rates went up, they could no longer afford payments on their mortgage.
Our present healthcare system. Patients pay copays (subprime mortgages) for their healthcare. Healthcare costs are artificially inflated due to large overhead caused by government and insurance mismanagement. Take away the large overhead and insurance intrusion and healthcare (mortgage payments) would again be affordable.
What will happen when the insurers and government can no longer keep up with the artificially high demand?
Will they continue on the present course of price fixing and burdensome regulations that only add to the cost of care?
We need an end to leveraged healthcare.
We need a system that brings the cost of healthcare down.
We need a system that would make health insurance once again insurance, and not prepaid leveraged healthplans.
Taking money out of the system, opening up the free markets, would once again make healthcare more affordable, and cost our patients and the government less. The uninsured would once again be able to afford insurance.
But we need to first remove leveraged payments from our system!
The past ten years the change has not been for the better.
Demand has increased.
Supply has shrunk.
Why is this?
Health insurance has given patients access to physicians for copayments as opposed to true market fees. This is leveraged care at its finest.
The demand for primary care has gone up exponentially. But the respect we receive as physicians has shrunk.
Could the low copays have anything to do with it?
Is this good for our system?
I say No!
The present system will fail soon.
A good analogy is todays housing market and the subprime mortgage debacle. Homeowners paid very little for homes they thought they could afford. But the housing bubble artificially inflated the value of their homes. When the bubble burst, and when interest rates went up, they could no longer afford payments on their mortgage.
Our present healthcare system. Patients pay copays (subprime mortgages) for their healthcare. Healthcare costs are artificially inflated due to large overhead caused by government and insurance mismanagement. Take away the large overhead and insurance intrusion and healthcare (mortgage payments) would again be affordable.
What will happen when the insurers and government can no longer keep up with the artificially high demand?
Will they continue on the present course of price fixing and burdensome regulations that only add to the cost of care?
We need an end to leveraged healthcare.
We need a system that brings the cost of healthcare down.
We need a system that would make health insurance once again insurance, and not prepaid leveraged healthplans.
Taking money out of the system, opening up the free markets, would once again make healthcare more affordable, and cost our patients and the government less. The uninsured would once again be able to afford insurance.
But we need to first remove leveraged payments from our system!
Sunday, March 9, 2008
Solutions for our healthcare system
March 9, 2008
For our follow-up to our initial open letter to America, we must continue with our patient focused concerns. We must also show that we can make changes to the present system that will increase affordable access to care for all, and cost our government less. It will also keep the present industries in business, but would necessitate a change in the way they do their business. We are the workforce in healthcare. We have the power to induce change if we remain united in our goals. This followup letter must show our continued unity with a focus on improving our healthcare system for all.
--------------------------------------------------------------------------------------------
We the Physicians of the United States of America, have taken an oath to serve the medical needs of you our patients. As written in our previous letter, the present system makes it more and more difficult. It is wasting billions of dollars a year, increases patient and doctor dissatisfaction, and ruins the needed trust in the doctor patient relationship.
It is time for a change. It is time our healthcare system returned to the principles of our founding fathers, of individual responsibility, where medical decisions are made solely by you and your doctor.
Here are my proposals:
Medicare:
Freeze spending at 2008 levels- this will help our federal government keep costs down and allow Medicare to continue for future generations, while taking up less of our nations GDP.
For our follow-up to our initial open letter to America, we must continue with our patient focused concerns. We must also show that we can make changes to the present system that will increase affordable access to care for all, and cost our government less. It will also keep the present industries in business, but would necessitate a change in the way they do their business. We are the workforce in healthcare. We have the power to induce change if we remain united in our goals. This followup letter must show our continued unity with a focus on improving our healthcare system for all.
--------------------------------------------------------------------------------------------
We the Physicians of the United States of America, have taken an oath to serve the medical needs of you our patients. As written in our previous letter, the present system makes it more and more difficult. It is wasting billions of dollars a year, increases patient and doctor dissatisfaction, and ruins the needed trust in the doctor patient relationship.
It is time for a change. It is time our healthcare system returned to the principles of our founding fathers, of individual responsibility, where medical decisions are made solely by you and your doctor.
Here are my proposals:
Medicare:
Freeze spending at 2008 levels- this will help our federal government keep costs down and allow Medicare to continue for future generations, while taking up less of our nations GDP.
- Allow doctors to balance bill patients above Medicare set rates. This allows doctors to keep up with their ever increasing overhead. This also allows doctors to remain open to treating Medicare patients. It also opens up Medicare to free market principles, which invariably will keep fees low and quality high.
- Allow secondary medicare insurances to pay more than Medicare if fees rise. These secondary insurers can compete in the free market, which they are very good at.
- End Medicare Advantage plans and the overregulation it causes.
- Means-test Medicare deductibles according to patients tax filings. Higher deductibles for wealthier patients, lower for poorer.
- Make preventative medical care for medicare recipients tax deductible.
Other Third Party Insurances:
- End Third party insurance meddling and determination of care. This third party intrusion into medical care has done the opposite of its intentions while producing profits in the billions. These profits drain the system of much needed resources for medical care. The profits based on ever increasing premiums have made health insurance so unaffordable to many, i.e. 47 million uninsured.
- End Insurance networks and give patients true choice in picking their doctors.
- End Referrals, preauthorizations, pre-certifications, etc.
- End insurance formularies, PBM’s which only serve to restrict and deny medications and increase profits for an unnecessary middleman.
- Stop P4P before it starts.
- Let the market decide the prices- lower cost alternatives will flourish!
End government mandates:
- all people should have equal access to care, but not all people need the same care. Equal care for all means mediocre care for all. One size does not fit all.
- Government should set up system of fair rules and then stay out of it. These rules should be enforced to go after the 1% of doctors, patients, and insurance companies breaking the rules, but leave the other 99% alone.
- Increase individual responsibility.
- Make healthcare insurance and payments tax deductible for individuals as well as employers. Employers should not be mandated to buy insurance for employees. But employers can compete for employees by joining co-ops for health insurance to allow their employees to purchase insurance policies based on individual needs. These policies become portable and individually owned regardless of employment status.
Increase availability of CDA’s and HSA’s.
- This increases individual responsibility while decreasing entitlement attitude towards healthcare. It may even encourage health savings for the future.
- Eliminate bankruptcies that allow discharge of medical debt. This increases individual responsibility and decreases use of our overcrowded emergency rooms. Primary care offices can provide cost effective care for non-emergent conditions.
- End lobbyists power over medical care and decision making. Medical decisions need to be made by doctors-patients PERIOD, and guided by free market principles.
Tort Reform: Defensive medicine cost billions. My local yellow pages has over 130 pages of lawyer ads, and under 40 pages of physician ads. Why the discrepancy?
- The present system allows for jackpot verdicts and is not sustainable. It is driving doctors out of business and into early retirement. A proper system is fair to all and does not increase the cost to all, for the benefit of the few who get jackpot verdicts.
- Propose a medical courts system where we are judged by our peers and not by public sentiment. This will allow for proper damages. It will also force change in the system to deal with medical errors as they occur. The present system does not.
Big Pharma: Your public perception is at the lowest it has ever been, and your stock prices are following. You need to change the way you do business. The free market will help your industry immensely. But todays back door deals with insurance companies and the medication-formulary system does not work for the greater good of our nation. For people without insurance to pay inflated costs to make up for the lower cost to insured patients does not work and is not fair. The system needs to have a level playing field.
- Immediately end DTC advertising.
- Have full transparency in medical studies. Publish all studies, not just those that support your products. No more manipulation of data. If you do, you will be called to task on it! You do not want a continuation of the Vioxx lawsuits.
- Stop dealing with third parties for pricing.
- End pharmaceutical formularies.
- With the cost savings, lower your prices to make your products affordable to all.
These are just my thoughts as a solo family physician. I am open to any and all options that we can add or subtract. But we need to focus on one common goal. What is best for our patients and sustainable for our nation.
Steven Horvitz, D.O.
Founder Institute for Medical Wellness
Sunday, March 2, 2008
February Analysis of Cash Transition
Results of first two months transition to Cash Only practice
February 2008:
1st two months – January-February 2008 transition to Cash Only + Medicare
Solo physician, suburban practice, large HMO penetration.
Conversion to cash practice, Medicare, and Wellness-Retainer model at affordable market based prices.
January and February’s numbers may not indicate future months as some old insurance money came in and is included in percentages given.
Also 2 insurers remained thru part of January due to their contractual terms that I chose not to fight as it only set me back a few weeks.
But February’s old insurance money was very low as compared to January.
---------------------------------------------------------------------------------------------------------
Comparisons given below are percentages comparing Jan-Feb 2007 to January-Feb 2008.
I will try to post further months and quarterly data as it comes in.
Patient Volume decreased by 33% for Jan-Feb 2008
New patients seen decreased by 63% for Jan-Feb 2008
$ per patient seen increased by 204% for Jan-Feb 2008
Revenues increased by 73% for Jan-Feb 2008
Old insurance money should not take me thru further than March 2008. Feb 2008 revenues are consistent with Januarys with much less in old insurance income.
Ok All, Lets here the questions and comments!!
------------------------------------------------------------------------------------
The numbers posted above reflect my suburban solo family practice in a highly penetrated managed care location.
The numbers so far are very encouraging. However they may not indicate the future.
A large part of the initial revenues have been from established patients enrolling in my practices Wellness plans. The enrollment fees start at $200 per year. For more info on the wellness options please click here. In order to sustain the revenues and the increase in $/patient I must continue to enroll patients both new and old in these plans. I hope that March 2008 has equal numbers to the first two months, but April and on need to bring in new patients to the practice. I do intend to start a marketing plan shortly to bring in these new patients. I have had a few so far, and I believe word of mouth will spread to bring in these new patients as it always has in the past.
Why the optimism? The patients who have enrolled so far in the wellness plans have stated to me they are very happy with the product and feel the fees are very fair and reasonable. Also the service we have been able to provide with same day appointments and improved patient advocacy has been very well appreciated by my patients.
What are the problems so far?
The biggest problem so far has been patient’s not understanding that health insurance networks do not dictate who they can see for their medical care. They feel they are breaking rules if they go out of network. They do not understand that they can pay directly for an office visit without using insurance.
Some believe that as an out-of-network physician that they will not have coverage for prescriptions, or other care accessed outside my office if I prescribe it. These are all issues that I have found need a lot of hand holding and teaching of how the system truly works. Once I explain how nothing changes other than my fee, a light goes on in their heads and it becomes a decision of a few extra dollars per visit to see me.
Another problem is all the other doctors in my area who still take their insurance and are thus cheaper per visit than I. But, I have already had half a dozen patients return to my office due to the inability of these other offices to accommodate same day appointments for sick visits.
Other Good Effects:
Expenses have gone down. My medical billing expenses have been slashed by at least 75%.
I have eliminated one medical assistant during my day hours, and went from two to one medical assistant during evening hours. I anticipate my payroll expenses to be slashed by about 25-30%.
For other good effects for my patients please see my blog post of 2-20-2008.
February 2008:
1st two months – January-February 2008 transition to Cash Only + Medicare
Solo physician, suburban practice, large HMO penetration.
Conversion to cash practice, Medicare, and Wellness-Retainer model at affordable market based prices.
January and February’s numbers may not indicate future months as some old insurance money came in and is included in percentages given.
Also 2 insurers remained thru part of January due to their contractual terms that I chose not to fight as it only set me back a few weeks.
But February’s old insurance money was very low as compared to January.
---------------------------------------------------------------------------------------------------------
Comparisons given below are percentages comparing Jan-Feb 2007 to January-Feb 2008.
I will try to post further months and quarterly data as it comes in.
Patient Volume decreased by 33% for Jan-Feb 2008
New patients seen decreased by 63% for Jan-Feb 2008
$ per patient seen increased by 204% for Jan-Feb 2008
Revenues increased by 73% for Jan-Feb 2008
Old insurance money should not take me thru further than March 2008. Feb 2008 revenues are consistent with Januarys with much less in old insurance income.
Ok All, Lets here the questions and comments!!
------------------------------------------------------------------------------------
The numbers posted above reflect my suburban solo family practice in a highly penetrated managed care location.
The numbers so far are very encouraging. However they may not indicate the future.
A large part of the initial revenues have been from established patients enrolling in my practices Wellness plans. The enrollment fees start at $200 per year. For more info on the wellness options please click here. In order to sustain the revenues and the increase in $/patient I must continue to enroll patients both new and old in these plans. I hope that March 2008 has equal numbers to the first two months, but April and on need to bring in new patients to the practice. I do intend to start a marketing plan shortly to bring in these new patients. I have had a few so far, and I believe word of mouth will spread to bring in these new patients as it always has in the past.
Why the optimism? The patients who have enrolled so far in the wellness plans have stated to me they are very happy with the product and feel the fees are very fair and reasonable. Also the service we have been able to provide with same day appointments and improved patient advocacy has been very well appreciated by my patients.
What are the problems so far?
The biggest problem so far has been patient’s not understanding that health insurance networks do not dictate who they can see for their medical care. They feel they are breaking rules if they go out of network. They do not understand that they can pay directly for an office visit without using insurance.
Some believe that as an out-of-network physician that they will not have coverage for prescriptions, or other care accessed outside my office if I prescribe it. These are all issues that I have found need a lot of hand holding and teaching of how the system truly works. Once I explain how nothing changes other than my fee, a light goes on in their heads and it becomes a decision of a few extra dollars per visit to see me.
Another problem is all the other doctors in my area who still take their insurance and are thus cheaper per visit than I. But, I have already had half a dozen patients return to my office due to the inability of these other offices to accommodate same day appointments for sick visits.
Other Good Effects:
Expenses have gone down. My medical billing expenses have been slashed by at least 75%.
I have eliminated one medical assistant during my day hours, and went from two to one medical assistant during evening hours. I anticipate my payroll expenses to be slashed by about 25-30%.
For other good effects for my patients please see my blog post of 2-20-2008.
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