July 25, 2017

GOD BLESS HIGH DEDUCTIBLES...:

What Happens When Doctors Only Take Cash (Haley Sweetland Edwards, Jan 26, 2017, TIME)

The catch is that the whole facility is cash-based. It doesn't take insurance of any kind. Not Aetna. Not Cigna. Not Medicare or Medicaid. Patients or their employers pay whatever price is listed online, period. There are no negotiated rates, no third-party reimbursements and almost no paperwork. "We say, 'Here's the price. Here's what you're getting. Here's your bill,'" says Keith Smith, who co-founded the Surgery Center in 1997 with fellow anesthesiologist Steven Lantier. "It's as simple as that."

To Villa, the model seemed refreshingly subversive. The Surgery Center would charge $19,000 for his whole-knee replacement, a discount of nearly 50% on what Villa expected to be charged at his local hospital. And that price would include everything from airfare to the organization's only facility, in Oklahoma City, to medications and physical therapy. If unforeseen complications arose during or after the procedure, the Surgery Center would cover those costs. Villa wouldn't see another bill.

Sometimes called direct pay, and closely related to concierge care, this sort of business model was once seen as the perquisite of rich folks and medical tourists from foreign lands. But nowadays many of the people seeking cash-based care are middle-class Americans with high-deductible insurance plans. For a patient with an $11,000 family deductible, for example, it might make more sense to seek out a cash-based center like the Premier Medical Imaging facility in Minneapolis, which offers a basic MRI for $499, than to cough up the several thousand dollars that the same procedure generally costs at a traditional hospital. Cash payments don't count toward a patient's deductible, but for some it's worth the gamble.

Self-insured companies, like the trucking and storage firm where Villa is the chief administrative officer, are also fueling the trend. Because such companies pay their employees' medical bills out of their operating budget, it's in their interest to steer everybody to the cheapest option. Villa, for example, says his decision to go to the Surgery Center saved his company money, since his $19,000 bill is less than it would have been charged, even with a negotiated discount, by a traditional hospital. The Oklahoma state public employees' insurance fund, which covers 183,000 people, recently did similar math. In 2015 it announced a new rule: If patients go to a traditional hospital, they pay their deductible and co-payment. If they go to a cash-based provider that meets the fund's criteria, including the Surgery Center of Oklahoma, they pay nothing at all.

While no organization keeps track of how many cash-based medical centers have cropped up nationwide in recent years, Smith and Lantier say they've witnessed an explosion. In Oklahoma City alone there are roughly three dozen centers that are all or partly cash based, specializing in everything from radiology to oncology. Texas has two dozen such facilities, and in Torrance, Calif., the Ocean Surgery Center posts many of its prices online. Thousands of cash-based primary-care practices have also sprung up across the country. [...]

[E]ven without a new Republican system, cash-based care has been growing under Obamacare, which required insurers to provide more-comprehensive coverage and to offer plans to anyone who wanted one. Insurers made up for having to cover a more expensive patient population by getting customers to contribute more out of pocket with higher deductibles, co-payments and co-insurance. While Obamacare imposed limits on how high deductibles could be--$7,150 for an individual and $14,300 for a family--the out-of-pocket contributions rose for many Americans, turning more patients into price hounds. If you're paying cash for that mole removal anyway, why not find the cheapest dermatologist in town? The Surgery Center of Oklahoma, among the first in the country to post its prices online in 2008, saw an uptick in business after Obamacare. "I guess it's ironic that Obamacare created this market for us," Smith says, with a laugh.

Posted by at July 25, 2017 1:20 PM

  

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