| Cash-only system catches on as reimbursements lose favor |
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Puget Sound Business Journal (Seattle)
The white paper study by the Washington State Medical-Education and Research Foundation cite low reimbursement from Medicaid and Medicare as the biggest reason for financial losses, and the report concluded that the average medical practice in the state lost $296,801 in the prior financial year. The WSMA also reported that since 1998, the state's medical association has seen a 31 percent increase in the number of its physician members moving out of state, a problem compounded by hospitals and practices having serious difficulties recruiting new physicians to fill the voids. Or, as one Olympia-based emergency room physician quoted in the survey responses put it "the word is out around the country — Washington is a lousy place to practice medicine." None of these statistics came as a surprise to either Tom Curry, CEO of the WSMA, nor to Renton physician Vern Cherewatenko. Due in no small part to the bankruptcy that his own private practice experienced as a result of mounting financial losses, Cherewatenko and Dr. David MacDonald founded the American Association of Patients and Providers, a nonprofit that offers both parties a back-to-basics opportunity to give and receive affordable health care. The secret? Pay cash. The program is called SimpleCare and the key to its success, says Cherewatenko, is in cutting out the insurance company middleman. "A few years ago I thought to myself that I'd gladly offer my services to my patients for half the normal billing cost if they'd just pay cash at the time that I saw them. I'd save money, they'd save money and we could both stay healthy, physically and financially. So, I did just that. I charge my patients $5 a minute. With an average patient spending 10 minutes with me for a consultation, that's a $50 office visit charge … less than half of what I would have had to charge them under an insurance plan." "Physicians are often running their businesses at a financial loss," adds MacDonald. "No other business owner out there would try to stay in business where you regularly lost money on almost every client transaction (but) physicians and medical groups and many hospitals do. That's why we're seeing the closure of medical clinics and trauma centers and more doctors refusing to take new patients or patients covered by Medicaid. "Young physicians entering (the field) can't afford to stay in medicine, we're losing experienced physicians to early retirement or the loss of their practices (and) absolutely no one is winning in this scenario." But he said the members of the American Association of Patients and Providers are beginning to. AAPP, which is run out of Cherewatenko and MacDonald's HealthMax offices in Renton, charges participating health-care practitioners a nominal fee to be listed in the association's health-care directory and patients wishing to join SimpleCare pay $20. Since the program's inception, more than 500 practitioners — almost half of them from Washington state — and 4,000 patients have signed up for the "cash only" system and both parties are reporting more dollars in their respective pockets. The creation and success of the SimpleCare program, said Curry, is "symptomatic of the underlying frustration that comes with trying to work within the insurance system. I'm not surprised that patients and physicians are simply saying 'no'… no to taking Medicaid, no to taking private insurance and in some cases, no to running a practice in this state." "You know, in 2000 we asked our member physicians in a survey whether they would be willing to trade their insurance revenue stream for a system where their practice would look to their patients for payment," continues Curry, "and 56 percent said yes. I'm guessing that those numbers would be considerably higher today." Reach the Business Journal at 206-583-0701 or |
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