Gyroscopic Investing

WiseOne wrote: Regulatory nightmare. If you have a $6,000 deductible, that $6,000 has to be accepted by the insurance company. Cash payments for visits wouldn't count. So if you have insurance it doesn't make sense to go to a cash-only practice, unless the per-visit price is no more than your copay, and your copay doesn't count toward the deductible. That severely limits your patient population.

I'm not sure I understand. If an insured person with a $6,000 yearly deductible pays cash for all the nickle-and-dime bills he incurs throughout the year, and there are no major catastrophes, he simply files away the cash receipts and moves on to the next year. If, on the other hand, he gets run over by a truck in late December, what's to prevent him from pulling out all the receipts he's accumulated during the past 12 months and submitting them to the insurance company in bulk as proof that he's met at least part of the deductible? Is there something in the policies nowadays that requires bills to be run through the insurance company concurrently with the service?

Maddy wrote:

WiseOne wrote: Regulatory nightmare. If you have a $6,000 deductible, that $6,000 has to be accepted by the insurance company. Cash payments for visits wouldn't count. So if you have insurance it doesn't make sense to go to a cash-only practice, unless the per-visit price is no more than your copay, and your copay doesn't count toward the deductible. That severely limits your patient population.

I'm not sure I understand. If an insured person with a $6,000 yearly deductible pays cash for all the nickle-and-dime bills he incurs throughout the year, and there are no major catastrophes, he simply files away the cash receipts and moves on to the next year. If, on the other hand, he gets run over by a truck in late December, what's to prevent him from pulling out all the receipts he's accumulated during the past 12 months and submitting them to the insurance company in bulk as proof that he's met at least part of the deductible? Is there something in the policies nowadays that requires bills to be run through the insurance company concurrently with the service?

I can think of at least one thing that would prevent that.

Maddy wrote:

WiseOne wrote: Regulatory nightmare. If you have a $6,000 deductible, that $6,000 has to be accepted by the insurance company. Cash payments for visits wouldn't count. So if you have insurance it doesn't make sense to go to a cash-only practice, unless the per-visit price is no more than your copay, and your copay doesn't count toward the deductible. That severely limits your patient population.

I'm not sure I understand. If an insured person with a $6,000 yearly deductible pays cash for all the nickle-and-dime bills he incurs throughout the year, and there are no major catastrophes, he simply files away the cash receipts and moves on to the next year. If, on the other hand, he gets run over by a truck in late December, what's to prevent him from pulling out all the receipts he's accumulated during the past 12 months and submitting them to the insurance company in bulk as proof that he's met at least part of the deductible? Is there something in the policies nowadays that requires bills to be run through the insurance company concurrently with the service?

There certainly is. It's a deductible on covered claims against your insurance, not on any and all spending you do anywhere anyhow. Only things that are run through (and covered by) insurance count towards your deductible.

MangoMan wrote: I don't follow your logic. If annual physicals were dropped, all that would happen is less people would go annually if ever. In my practice, most insurance plans cover 2 exams/cleanings per year. The first thing that happens when people lose their insurance is they stop coming in for check ups. But as they avoid me for 3 years, the $200 filling caught early turns into a $2500 root canal and crown. How is that a good thing?

You're assuming that if a cash model prevailed for all but catastrophic expenses, out-of-pocket costs would remain the same. However, take away all the cost-shifting and administrative expenses, and prices could be expected to fall to a level where people could actually afford routine care. The fact that facilities such as the Oklahoma Surgery Center are able to offer the very same services as your local hospital for a mere fraction of the price suggests that the cash-based model works.

Xan wrote:

Maddy wrote:

WiseOne wrote: Regulatory nightmare. If you have a $6,000 deductible, that $6,000 has to be accepted by the insurance company. Cash payments for visits wouldn't count. So if you have insurance it doesn't make sense to go to a cash-only practice, unless the per-visit price is no more than your copay, and your copay doesn't count toward the deductible. That severely limits your patient population.

I'm not sure I understand. If an insured person with a $6,000 yearly deductible pays cash for all the nickle-and-dime bills he incurs throughout the year, and there are no major catastrophes, he simply files away the cash receipts and moves on to the next year. If, on the other hand, he gets run over by a truck in late December, what's to prevent him from pulling out all the receipts he's accumulated during the past 12 months and submitting them to the insurance company in bulk as proof that he's met at least part of the deductible? Is there something in the policies nowadays that requires bills to be run through the insurance company concurrently with the service?

There certainly is. It's a deductible on covered claims against your insurance, not on any and all spending you do anywhere anyhow. Only things that are run through (and covered by) insurance count towards your deductible.

Okay, but what's to prevent the patient himself from submitting the bills to his insurance company? The scenario I'm suggesting contemplates a physician who has opted out of the insurance system entirely, so there is no behind-the-scenes agreement that requires him to submit bills to the insurer. Assuming that the applicable policy covers the services of out-of-network physicians, exactly what in your run-of-the-mill policy would allow the insurer to reject the claim? I just don't understand the idea that cash payments "don't count." (The lawyer in me is muttering, "Like hell they don't.")

It's not that cash payments don't count, it's that unless the payment was made through an agreement with the insurance company, then the insurance company won't count it against the deductible.

MangoMan wrote:Perhaps, but you are assuming it is a given that prices would drop. Since 95% of my patients are on a PPO or HMO, I am currently receiving, on average, about 60% of my full fee. If we got rid of the insurance companies as middle men, the price would be less than my current full fee,but more than the ridiculously low negotiated fee I am contracted at now. So the net to the patient would be higher than what it is now. Perhaps if my costs dropped enough by not having to deal with insurance, I could get as low as what they pay now. Idk.

Does it even make sense that you have a "full fee" if 95% of your customers don't pay it? It seems like what would happen is that your new cash-based "full fee" would drop to the current negotiated rate instead. Also, since everyone would be paying cash, you would be exposed to price competition, and would be incentivized to lower your prices over time. This would probably have the effect of lowering the prices of your supplies and materials as you economized and started shopping around for better prices, same as your customers.

Or I could be totally wrong, I dunno. You're the one actually in the industry! But it seems weird that dentistry would be the one market not affected by transparency and competition.

MangoMan wrote:You are correct, it makes no sense. Back in the day, when only 50% of my practice was PPO, I actually did receive full fee half of the time.

Part of the problem is that you guys assume health care is a commodity. It is and it isn't. If you need a knee replacement, do you want the guy who does broken arms and legs and also does some knee and hip surgery? Or do you want the guy who does nothing but knees? Even if he charges twice the price?

Sure, but most medical care isn't a knee replacement. It's a lot more routine and low-level than that. And to the extent that there are a lot of invasive surgical procedures, I'm convinced that the root of the problem in the USA is how unhealthy the population is from eating garbage every day for years. Any resolution to this situation needs to start there. There was a bill in the New Mexico legislature this year to extend the sales tax to food deemed to have little to no nutritional value that died a fiery death after a thousand special interest groups howled bloody murder. What a shame.

Maybe things are different in dentistry, MangoMan, but here's a short list of tasks and expenses that could vanish with a switch to a cash-only practice:

- billing services (30% of all collected fees go to these guys and that doesn't count the internal billing center)
- the electronic medical record system that all of us curse every day and that cost our medical center $40 million...and then they realized it was unworkable so they're replacing it with a slightly better system at probably twice that amount. There are simpler and better systems out there, but Obamacare made most of them obsolete, which gave the top two EHR developers (allscripts, epic) a virtual monopoly.
- Periodic paperwork & online training programs to stay credentialed with all the local insurance companies & CMS
- The extensive documentation required by any third party payor in order to justify bills submitted directly or via the patient. Most office visits could be documented in about 30 seconds, but the extraneous requirements & convoluted entry systems inflate that to at least 30 minutes. It's why most practices now employ (i.e. pay) scribes to do this job.
- Coding & billing compliance services (or employees)

That overhead easily sucks up most of the office visit bill. Why not cut all that out, reduce the office visit fee, and then do something else productive with all the time that just got freed up? Or am I just being too simplistic?

For what it's worth, I'm aware of several practices in quaternary/tertiary care academic centers that have already gone to cash only. You can only do that if you're prepared to lose a chunk of your patient population, though.

WiseOne wrote:Maybe things are different in dentistry, MangoMan, but here's a short list of tasks and expenses that could vanish with a switch to a cash-only practice:

- billing services (30% of all collected fees go to these guys and that doesn't count the internal billing center)
- the electronic medical record system that all of us curse every day and that cost our medical center $40 million...and then they realized it was unworkable so they're replacing it with a slightly better system at probably twice that amount. There are simpler and better systems out there, but Obamacare made most of them obsolete, which gave the top two EHR developers (allscripts, epic) a virtual monopoly.
- Periodic paperwork & online training programs to stay credentialed with all the local insurance companies & CMS
- The extensive documentation required by any third party payor in order to justify bills submitted directly or via the patient. Most office visits could be documented in about 30 seconds, but the extraneous requirements & convoluted entry systems inflate that to at least 30 minutes. It's why most practices now employ (i.e. pay) scribes to do this job.
- Coding & billing compliance services (or employees)

That overhead easily sucks up most of the office visit bill. Why not cut all that out, reduce the office visit fee, and then do something else productive with all the time that just got freed up? Or am I just being too simplistic?

For what it's worth, I'm aware of several practices in quaternary/tertiary care academic centers that have already gone to cash only. You can only do that if you're prepared to lose a chunk of your patient population, though.

All of that would cut expenses to the point where routine office visits would be affordable for most people.

Let's see if "Obamacare repeal 2.0" makes a dent in this problem.

Libertarian666 wrote:All of that would cut expenses to the point where routine office visits would be affordable for most people.

Let's see if "Obamacare repeal 2.0" makes a dent in this problem.

Indeed. My wife went to a Walmart optometrist a few weeks ago. $70 cash price, clearly posted. After getting her perscription, she went online and bought some new glasses. Lots of bells and whistles and nice attractive frames. They should last for about 5 years. $65 total. No hassle, no insurance, no billing claims, no codes, no bureaucracy, no bullshit.

That's what medical care should be like everywhere. Yes, optometry isn't ever an emergency, but most medical care is also not an emergency. Shopping around for non-emergency care and paying cash works just fine.

Frankly I keep waiting for Walmart to open cash-based clinics in their larger stores. I'm sure they would be a smash hit. I wonder why they haven't.

MangoMan wrote:Perhaps, but you are assuming it is a given that prices would drop. Since 95% of my patients are on a PPO or HMO, I am currently receiving, on average, about 60% of my full fee.

This is a huge part of the problem in general. The 60% number is the actual price, and the "full fee" is a made-up price that nobody actually is expected to pay.

Our insurance is grandfathered. (Unfortunately, that's finally going away, and of course at this point it's impossible to make any plans for replacing it because everything is changing unpredictably!) It doesn't cover maternity. When each of our boys were born, the sticker price for the hospital was some $25,000. But, oh, if you're doing doing insurance and are paying up-front, then they'd take ~$5,000.

That's great for us and all, but it really illustrates what a scam the whole system is. People who do pay for ridiculously fantastic insurance will say "I could never have afforded $25,000!", and never see that the *actual* price is something far less.

Xan wrote: The 60% number is the actual price, and the "full fee" is a made-up price that nobody actually is expected to pay.

I recall reading somewhere that by having a "full fee" that virtually nobody pays, hospitals take massive write-offs on their taxes for purely fictitious losses. I don't know whether this is true, but if so, it's quite the scam. Can anyone verify?

Oh the long gone days with no insurance in the not so small burg of Houston - $55 crown prep and gold crown (1968), $300 physician charge for all prenatal care, delivery and several followup visits for our first child (1969), and $7.00 physician office visit to treat influenza (1970). Texas, don't mess with Texas.

Pointedstick wrote:There was a bill in the New Mexico legislature this year to extend the sales tax to food deemed to have little to no nutritional value that died a fiery death after a thousand special interest groups howled bloody murder. What a shame.

Who gets to decide what's on or off the list... the "experts"? Sounds like a recipe for disaster to me.

Mountaineer wrote:Oh the long gone days with no insurance in the not so small burg of Houston - $55 crown prep and gold crown (1968), $300 physician charge for all prenatal care, delivery and several followup visits for our first child (1969), and $7.00 physician office visit to treat influenza (1970). Texas, don't mess with Texas.

Maybe part of the reason that the gold crown was so "cheap" is that gold was price-fixed at $35/oz.?

Pointedstick wrote:Frankly I keep waiting for Walmart to open cash-based clinics in their larger stores. I'm sure they would be a smash hit. I wonder why they haven't.

That's because Walgreen's beat them to the punch. Here's the price list:

https://www.walgreens.com/topic/pharmac ... e-menu.jsp

Given that the local academic centers are charging $600-$1000 for a new patient visit and >$200 for a followup, these prices look quite reasonable. And it's not even pure cash-only...they still have to deal with the EHR, documentation, and insurance authorization requirements. Of course you're probably seeing a nurse practitioner with an MD hovering somewhere nearby, but for this setting an NP is perfectly fine.

Perhaps the way forward is that as insurance companies continue to increase premiums, copays, coinsurance & deductibles, more patients will opt for a combination of catastrophic coverage and inexpensive retail clinics for the routine stuff, and more doctors will switch to cash-only. They'll also start to question the evidence-based dogma that has them undergoing frequent screening tests and taking multiple preventive meds, for high prices and little (if any) benefit. Eventually we'll end up with MediumTex care. No political cataclysms required.

WiseOne wrote:

Pointedstick wrote:Frankly I keep waiting for Walmart to open cash-based clinics in their larger stores. I'm sure they would be a smash hit. I wonder why they haven't.

That's because Walgreen's beat them to the punch.

In my city, it's the CVS across the street from Walgreens that has the clinic. It's staffed only by a nurse so there is a limit to what they can do. I took my wife there for company mandated biometric screening a couple of years ago and my insurance wouldn't pay for it. Had to be done by a registered M.D.

We did have an insurance friendly M.D. staffed walk-in clinic down the road for a couple of years but they closed up shop for lack of business.

Cortopassi wrote:

Of course any device like that would generate billions in profits, so that comic is retarded.

Kinda like if the inventors of digital cameras tried to quash it as they made their money on film development.....

Cortopassi wrote:https://i.imgur.com/wFmSTSL.png

Pharmaceutical giant 'plotted to destroy cancer drugs to drive prices up 4000%'

http://www.independent.co.uk/news/healt ... 83521.html

Here's one of the better and more detailed healthcare reform proposals I've read in a long time.

https://market-ticker.org/akcs-www?post=231949