Some Doctors Turn to Cash-only Policies (Traditional Medicine; No Insurance)

Baltimore Sun ^ | 4/4/04 | Rebecca Cook, AP

[mountaineer]

RENTON, Wash. -- When Chuck O'Brien visits his doctor, they talk about his aches and pains, his heart problems and his diet, but never about his health insurance. That's because his doctor only accepts cash.

Dr. Vern Cherewatenko is one of a small but growing number of physicians across the country who are dumping complicated insurance contracts in favor of simple cash payments.

When O'Brien leaves the exam room, he writes a check for $50 and he's done -- no forms, no ID numbers, no copayments.

"This is traditional medicine. This is what America was like 30 years ago," said O'Brien, 55 and self-employed, who believes he has saved thousands of dollars by dropping his expensive insurance policy and paying cash. "It's a whole world of difference."

Is this the health care wave of the future? Probably not, experts say. Most people are content with monthly premiums and $10 copays; nine out of 10 doctors contract with managed-care companies.

But cash-only medicine is becoming an increasingly attractive option for doctors frustrated by red tape and for the 43 million Americans who lack health insurance.

"It's a terrible indictment of the collapsing health care system," said Arthur Caplan, chairman of the medical ethics department at the University of Pennsylvania Medical School. "Insurance and managed care were supposed to streamline -- instead what they've done is add so much paperwork and bureaucracy they're driving some doctors out."

[hometoroost]

"Just how popular the new accounts will become remains unclear. But their cost-saving features and likely promotion by big employers could make them huge. (Related chart: Health costs and the income tax)"

Small employers are hopping on board and the IRS said that 75% of the people buying MSAs were previously uninsured (most of them worked for small businesses). NFIB.com has a lot of information about HSAs if you are interested in finding out more about them.

[Graybeard58]

A 9 day hospital stay will cost about $12,000.00

My wife recently had a four day stay in a hospital and the charge was $57,000 and that did not include room and board ($2700) the surgeons fee, anesthesiest or radiology charges. Molded plastic back brace cost an extra $2,000.

[ffusco]

MSA's only work for young people in good health who can afford to save for some far off catastrophy. What about the working poor and the retired?

[McGavin999]

That's why you purchase a catistrophic policy that picks up after $2,000 or $5,000. The higher the deductable, the cheaper the premium.

The good thing about medical savings accounts is that if you don't use the money you set aside, you can roll it into your retirement plan and it remains deductable.

[stylin_geek]

I wonder what would happen to the currently overloaded system if everyone had to pay cash? Think fewer people would run to the doctor for every little ache and pain? Think it would relieve some of the burden?

[Eric in the Ozarks]

Just visit the local Blue Cross/Blue shield office in your state sometime. Fatass bureaucrats and fatass clerks enjoying fatass meetings, on your dime.

[antti tuuri]

Maybee we can work up a nice nanny state to take care of them or they can just move to Cuba were Fidel just takes care of these things.

[PGalt]

Thanks for the post. Competition (vs. the entrenched bureaucracy) will always give you the best possible product at the lowest possible cost.

[Captain Peter Blood]

What they also should do is give you say 5 or 10% off for paying cash. Think of all the money involved in processing
every charge through an insurance company and the Doctor's office.

[redhead]

"My mother has kept the cancelled check from the hospital bill for my birth - paid in full at a little over $300. Compare and contrast to modern times!"

My first two babies cost $100 each (Early Sixties). The second two were $300 apiece (mid Sixties, early Seventies). This, of course, was for normal, uncomplicated, non-surgical deliveries, and 4 day stays. Nowadays, the costs are well over $1,000 for the same service, and the stay is only for one day.

[redhead]

"How many people have 50 thousand dollras for a liver transplant?"

This is why there is "catastrophic coverage." Get a policy with a $1-$2,000 deductible (most people can pay a $1-2,000 fee off in time with little struggle). But the catastrophic coverage is for such services as liver transplants, cancer treatment, joint replacement, etc. The premiums on high-deductible insurance policies are much lower than low-deductible.

[Polybius]

What they also should do is give you say 5 or 10% off for paying cash.

I would love to. My billing service costs me 7% of every dollar collected. However, giving a discount is illegal. You are not allowed to charge Medicare a higher rate than you charge a private patient for the same service or something along those lines.

[CrashCole]

My Doctor and Dentist both give a cash discount - 20% to 25%. I made this agreement with each as part of my initial visit. I will pay cash as I walk out the door and get a discount for doing so. Just ask, you might be surprised how many will give substantial discounts.

I have also asked for outpatient surgery twice - about 1/3rd the cost of inpatient. Same rules - I pay as I leave.

[Cboldt]

O'Brien, a freelance marketing specialist, switched from a comprehensive health plan with $300 monthly premiums to a catastrophic plan that costs $75 a month, with a $2,000 deductible. He pays out-of-pocket for routine checkups, and his insurance will kick in if he ever needs expensive care.

What state? I pay over $400 a month for coverage that has a $10,000 deductable, and excludes all routine maternity care. Maine, the sate that promises universal health care in the near future.

[CrashCole]

My doctor and dentist have never mentioned that it is illegal to give a discount for cash. Perhaps they don't do medicare.

[Polybius]

However, giving a discount is illegal. You are not allowed to charge Medicare a higher rate than you charge a private patient for the same service or something along those lines......Polybius

Yep. Here it is. This is in a chiropractor's link but the same law applies to doctors.

The bottom line is yes, they ARE illegal. Why they are illegal I will go into later. The problem started with one phrase: "dual fee schedules." Insurance companies learned that chiropractors charge a higher fee to insurance patients than they do to cash patients. This is against the law, it's insurance fraud

[Bigg Red]

mark

[zeaal]

I know of a doctor that practices the cash policy for services rendered. If a patient wishes to turn into their insurance company for out-of-network reimbursement, then they can do so ... but her office does not mess with any of it. She is a GREAT doctor too.

[Polybius]

My doctor and dentist have never mentioned that it is illegal to give a discount for cash. Perhaps they don't do medicare.

I found a reference in my Post 36 on a chiropractor's web page. It seems the law applies to commercial insurance too.

My dentist also gives a 10% discount for paying cash but I don't know if he accepts dental insurance.

As for me, I pay my lawyer, my CPA and my medical billing service a lot of money to keep track of stupid laws and regulations and to keep me out of trouble so I just shut up and do what they tell me to do. ;-)

[Xenalyte]

This is amazing. If any FReeper knows of a Houston doctor who does this, I would much appreciate the name.