3 Reasons Doctors Are Ditching Insurance And Offering Care For Cash

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Moving away from public healthcare and towards private models

[By Jessica Socheski]

jsWith the new healthcare system in effect, many doctors are moving away from public healthcare and towards private models. Instead of taking insurance, programs like the corporate wellness plans from MDVIP and other direct primary care doctors are choosing to deal in cash only with their patients. And in essence, they are cutting out the expense of a middleman insurance company.

Many doctors have taken it upon themselves to create a model that helps more than it hinders. Here are three reasons why doctors are choosing private healthcare over public.

1. The Patient Comes First

For many people, the new healthcare insurance price has skyrocketed, making it difficult to pay for healthcare let alone use it when needing a doctor. Direct primary care doctors provide their basic or preventative care that their patients can afford without using their insurance and meeting high deductibles.

Doctors who have embraced this model find they are able to offer their patients a variety of services for less money. This offers people the chance to receive quality care without paying an exorbitant amount. Without this model, many people would avoid the doctor all together, which could lead to serious undiscovered health problems.

2. Waiting Game

Since the Affordable Care Act, hospitals, urgent care, and public healthcare offices have noticed an increase in patients, leaving both waiting rooms and doctors inundated with patients. Unfortunately, this leaves doctors and nurses trying to juggle too many patients without enough help to accommodate them. Doctors are overworked and rushed, unable to spend a proper amount of time with a patient.

Consequently, the current healthcare model has pushed many public healthcare doctors towards privatized hair, leaving an even larger doctor deficit and nurse shortage in the public sector. But since these doctors have turned to private healthcare as their new business model, doctors have the time and availability to meet with their patients and build a relationship with them.

Under private healthcare, patients can schedule appointments with their doctors to have a proper visit where both the physician and patient feels they been given an adequate amount of time—the doctor for diagnosing and the patient for quality care.

3. Doctor Freedom

The direct primary healthcare model is not something entirely new. But it is just now growing in popularity as doctors and patients search for relief from a problematic system. Before congress passed legislation in 1973 that led to the expansion of prepaid health plans, the majority of physicians operated in a fee-for-service model.

Under insured health plans, physicians had little flexibility in determining what services they could provide and how to cut costs for their practices. Some insurance companies even dictate the hours during which doctors can be paid.

 Three Reasons Doctors Are Ditching Insurance And Offering Care For Cash

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Assessment

By moving away from insured health, doctors are able to remove the shackles and dictate how they believe their patients should be cared for. Dr. Villarreal, a doctor in Laredo, Texas, states in regards to his direct primary business model, “To me, there’s no other way I would practice medicine. You feel like you’re a doctor again.”

Conclusion

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More on the Doctor Salary “WARS” – er! ah! … CONUNDRUM!

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Compensation Trend Data Sources

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By Dr. David Edward Marcinko MBA

[Editor-in-Chief] www.BusinessofMedicalPractice.com

Related chapters: Chapter 27: Salary Compensation and Chapter 29: Concierge Medicine and Chapter 30: Practice Value-Worth

 

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PERSONAL PREAMBLE

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Physician compensation is a contentious issue and often much fodder for public scrutiny. Throw modern pay for performance [P4P], and related metrics, into the mix and few situations produce the same level of emotion as doctors fighting over wages, salary and other forms of reimbursement.

This situation often springs from a failure of both sides to understand mutual compensation terms-of-art when the remuneration deal was first negotiated. This physician salary and compensation information is thus offered as a reference point for further investigations.

Introduction 

More than a decade ago, Fortune magazine carried the headline “When Six Figured Incomes Aren’t Enough. Now Doctors Want a Union.” To the man in the street, it was just a matter of the rich getting richer. The sentiment was quantified in the March 31, 2005 issue of Physician’s Money Digest when Greg Kelly and I reported that a 47-y.o. doctor with 184,000 dollars in annual income would need about 5.5 million dollars for retirement at age.

Of course, physicians were not complaining back then under the traditional fee-for-service system; the imbroglio only began when managed care adversely impacted income and the stock market crashed in 2008.

Today, the situation is vastly different as medical professionals struggle to maintain adequate income levels. Rightly or wrongly, the public has little sympathy for affluent doctors following healthcare reform. While a few specialties flourish, others, such as primary care, barely move.

In the words of colleague Atul Gawande, MD, a surgeon and author from Brigham and Women’s Hospital in Boston, “Doctors quickly learn that how much they make has little to do with how good they are. It largely depends on how they handle the business side of practice.”  And so, it is critical to understand contemporary thoughts on physician compensation and related trends.

Compensation Trend Data Sources

A growing number of surveys measure physician compensation, encompassing a varying depth of analysis. Physician compensation data, divided by specialty and subspecialty, is central to a range of consulting activities including practice assessments and valuations of medical entities. It may be used as a benchmarking tool, allowing the physician executive or consultant to compare a practitioner’s earnings with national and local averages.

The Medical Group Management Association’s (MGMA’s) annual Physician Compensation and Production Correlations Survey is a particularly well-known source of this data in the valuation community. Other information sources include Merritt Hawkins and Associates; and the annual the Health Care Group’s, [www.theHealthCareGroup.com] Goodwill Registry.

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Portfolio analysis

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Assessment

However, all sources are fluid and should be taken with a grain of statistical skepticism, and users are urged to seek out as much data as possible and assess all available information in order to determine a compensation amount that may be reasonably expected for a comparable specialty situation. And, realize that net income is defined as salary after practice expenses but before payment of personal income taxes.

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™ Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™

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