The other day I was going through the comments that had been submitted recently in response to various blog posts. This is actually one of the more enjoyable parts of maintaining this web site, because I often get to find out how people are finding affordable care options as self-pay patients, or respond to questions or comments they have. I also get to wade through a lot of spam (although if I ever need a mail-order-bride from Russia, I now know there are sites I can turn to).
Reviewing the comments that had been left on one of my recent posts about cash-only and cash-friendly doctors, I found one by Dr. Efrain Arroyave, a retired doctor in the Miami region. Dr. Arroyave in recent years has been very active in the self-pay healthcare world, helping to launch companies catering to self-pay patients like econoLABS, NextImage Direct, and opening in September, SelfPayMD, a chain of primary care practices in the Miami area that are cash-only.
I thought Dr. Arroyave’s comments were pretty interesting, and I thought they deserved a wider audience than whomever might stumble across them on that blog post. So, with his permission, I’ve re-posted his comments here as a stand-alone guest piece. It reads a little different than most pieces, because it was written in part to explain the ‘business case’ for SelfPayMd (or at least that’s how it reads to me), but it’s still a very informative commentary and I hope you all get as much out of his comments as I did!
Regardless of ObamaCare, “Self-Pay” Primary Care Practice Models Will Thrive!
Even before ObamaCare, as a direct result of diminishing reimbursements and rising overhead costs, many Primary Care Physicians (PCPs) retired early, abandoned their practice or joined primary care groups to share overhead. Some refused to accept government or private insurance, opting to change their insurance-based practice to a “direct-pay” business model (self-pay). Currently in the USA, direct-pay accounts for 4%-6% of primary care medical practices – and growing. Even in England, where they have had socialized medicine for several decades, it is growing at 5% per year.
Stressed Primary Care Physicians
Today PCPs typically get paid about 20% – 25% of their billed amount, while shouldering labor-intensive collections effort. Thus, by not accepting any form of health insurance, we eliminate unnecessary employees, which allows for a lower overhead, which in turn allows us [SelfPayMD] to charge only $75 per visit.
More Patients and Less Primary Care Physicians = Long wait-times for appointments
ObamaCare will add 32 million patients to the insurance rolls; and, by the government’s own admission, they expect a shortage of 52,000 PCPs by 2020. Even with the full implementation, they also predict that over 30 million people will remain uninsured (you read correctly)! This will lead to congestion: in Massachusetts, with its mini-ObamaCare, the wait time to see a PCP is about two months; and, if patient care in Veterans Hospitals is any indication of things to come, long wait-times to be seen by a physician will be the norm.
Gaming the System: Small Penalties vs High Premiums vs Lifestyle
Small penalties for not having health insurance will likely lead to people who will game our healthcare system, resulting in higher premiums for those who comply, e.g., a thirty year-old earning $30,000 per year will pay about $300 per month. At that age there is very little thought given to illness or accidents. So, knowing that – by law – hospitals must treat uninsured patients, it might be a good gamble to lease a new BMW instead of paying for mandatory health insurance.
A new congressional report estimates more than 25 million Americans without health insurance will not be made to pay a penalty in 2016 due to an exploding number of ObamaCare exemptions – serving as another loophole for not buying health insurance.
Growing Premiums with Deductibles of $5,000 to $9,000
Many insured patients with mandatory high deductibles may shop around for low prices, even if they have to pay out-of-pocket. Then, there are the middle-middle and some upper-middle class who cannot afford their monthly insurance premium, which can only continue to rise. The poor will receive free healthcare via Medicaid, and the lower-middle class will receive subsidies.
Fraud —> Higher Premiums —> More Uninsured Middle-Middle Class
By the Government’s own admission: although the IRS will play a key role in ObamaCare, there is no system in place to monitor income requirements for subsidies, they will rely on the honor system. This will lead to fraud and higher premiums from insurance companies. The poor will not be affected but many in the middle-middle class may not be able to afford higher premiums; and, they will also seek out affordable “Self-Pay” PCP and diagnostics proposed herein.
Questionable Legality of Federal Subsidies
Two US judicial panels recently issued conflicting rulings over the federal government’s ability to offer subsidies to 5 of the 8 million consumers who signed up for insurance this year. This will most likely require Supreme Court intervention; and, depending on their decision, many who now qualify for government subsidies will be unable to afford health insurance.
Small Employers Wanting to Give Workers Some Coverage
Small employers with less than 50 employees will be looking to offer their employees some form of primary care health coverage. A recent book by Ezekiel Emanuel, one of the architects of ObamaCare, admitted that only 20% of employer-based health insurance will exist within 10 years. This is not surprising considering that employers with over 50 employees will only be fined $2,000 per year per employee for whom they do not provide health insurance. Thus, anywhere from 50 million to 80 million employees will be shunted to the health insurance exchanges.
Flying Under the Radar
In as much as young, uninsured workers will still require an occasional visit to a PCPs; and, since our Direct-Pay model is not required to report to private or government insurance companies, the government will not be able to identify them – until they are forced to enter the governments’ healthcare data base, e.g., hospitalization or a hospital emergency room. These mostly young individuals are an obvious pool of potential patients to Direct-Pay models.
Privacy of Medical Records
Being that SelfPayMD will not accept any form of private or government insurance, we are not required to upload our patients’ medical records to the government’s data-hub. Thus, our patients’ medical records and personal information are safe from government scrutiny and possible hackers.
