How Docs Will Get Paid in the Future: A "Cash-Only" Primer

"Will the current economic climate continue to increase the number of physician who go cash-only?

Seven out of 10 respondents to a MedPage Today online spotcheck think so."

Sitting with Dr. Jay Parkinson of Hello Health (@jayparkinson) and Jonathan Sheffi (@sheffi) munching tortillas in the sun last week at #sxsw, the three of us engaged in some verbal wrestling about how docs will be paid in the future.

My vote for reimbursement (one of them anyway) is to create a new class of DRGs (or ICTs on the WHO stage) and CPTs that pays docs for emedicine, telemedicine, and mHealth interactions.

Jay shot me down, saying cash payment is the way to move forward. Jay would know, since this is the model Hello Health is using.

While I agree with Jay that cash-only will be a primary restructuring tool for rebuilding the US healthcare system, I also haven't completely given up on the fact that we'll need to integrate BOTH revolutionary (cash only) + traditional (coding) methods of payment to ensure BOTH types of docs (revolutionary) + (traditional) are paid to interact with me as a patient where I live and work and play (online, in the cloud, on my mobile). 

For now though, let's focus on some of the basic aspects of cash-only practices. Rejoice! After reading this Posterous you too will be able include this kind of commentary in your stunningly interesting cocktail-party healthcare reform banter.

Just don't be surprised if your companions retreat to nebulous talk about environmental issues or how much the economy stinks...

All items in quotes below are from a MedPage Today article:http://www.medpagetoday.com/PracticeManagement/PracticeManagement/13347?utm_source=mSpoke&utm_medium=email&utm_campaign=DailyHeadlines&utm_content=GroupB&userid=172629&impressionId=1237516300840

How many cash-only physicians are there? Good question.

according to the CDC, in 2005-06, 11% of physicians had no managed care contracts."

Are cash-only physicians concierge practices?

Good question. Not necessarily, although cash-only physicians may ALSO operate a concierge like service...

Cash-only physicians don't operate like concierge practices, said Jeffrey J. Denning, a practice management consultant in La Jolla, Calif. "Concierge practices charge an annual membership fee of $1,000 or so for increased access to the physician in an upscale office environment, then bill insurance companies or Medicare for services. Nothing much changes in a cash-only practice except getting out of the insurance billing business."

How do docs get paid in a cash-only practice?

At the point of service, via cash, although many will also accept checks and credit cards (MedPage recommends having staffers who handle the moolah 'bonded.' Funny. Do we bond retail store cashiers? Why would staffers at a medical practice be MORE likely to embezzle just because they haven't handled large amounts of cash at a docs practice?)

Many things in medicine are NOT simple. This is one thing that IS. Hope we see more cash-only practices.

How do docs figure out how much to charge in a cash-only practice?

Like any other small business. No, seriously...

"Like most small-business operators, cash-only physicians look at what competitors are charging, calculate the cost of doing business, then tack on enough to make a profit. Dr. Berry said he strives to keep fees "between the cost of an oil change and a brake job."

Starting a cash-only practice forces docs to operate in a more business-like manner in other ways: "Physicians who drop third-party contracts typically have to advertise their practices until word-of-mouth kicks in. "

Why would docs want to operate a cash-only practice?

"Because cash-only physicians have lighter workloads than their peers, noted Judy Capko, a consultant in Thousand Oaks, Calif., they're better able to build strong healthcare partnerships with patients.

Patients, in turn, have easier access to care and are less likely to experience the rushed appointments that result when physicians see large numbers of patients to compensate for managed care's low reimbursement rates."

As a matter of fact, the cash-only practice model is so simple and intuitive I'm surprised it hasn't yet come under fire by the AMA or others looking to protect the current reimbursement way of life.

Doc-run and specialty hospitals (operating as, say, cardiac specialty centers) have been slammed by organizations (with big lobbying budgets) looking to protect the status quo. Accusations that these specialty hospitals get to 'cherry pick' the best patients abound.

I can definitely see the potential for cash-only docs getting whacked with the same sideways argument - "Cash-only docs can pick the 'healthiest' or 'best' patients, those who have cash out of pocket to spare, either because they're healthy or wealthy, leaving the 'sickest' patients covered by insurance to seek care elsewhere."

Even the MedPage article falls for this one: "
The flip side of this, of course, is that cash-only patients must dig deeper into their pockets than patients who only need to fork over a copayment. "

First of all, who keeps cash in a pocket anymore? Second, cash-only docs aren't picking the healthiest patients, but the healthiest patients may indeed begin to pick cash-only docs. Wrap your mind around that one for a few...

Posted via email from Jen's posterous

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