In the midst of federal and state government agencies and insurance companies joining forces with each other to implement Obamacare, a different approach to health care is emerging. Patients, practitioners, labs and clinics are moving toward a cash-based system of buying and selling health care services, significantly reducing their use of insurance and in some cases abandoning insurance altogether.
“Ours was a two-fold problem,” said Dr. Doug Nunamaker, a family medicine practitioner whose Wichita, Kan., clinic has shifted to a cash-based compensation system.
“For one, there aren’t enough doctors out there, and fewer physicians want to go into primary care medicine because of all the hassles and paperwork,” he told IdahoReporter.com. Nunamaker estimates that 22 percent of a physician’s time and resources are spent processing insurance claims. He believes if physicians could eliminate that burden, it would be the equivalent of adding 165,000 new physicians across the country.
“Another problem we wanted to address is that there is no other product or service that is paid for with insurance,” Nunamaker added. “Imagine if your car insurance paid for your gasoline. An insurance company would tell you what kind of gas to buy, how much you could buy and they’d have to pre-approve a trip out of town.”
Nunamaker has garnered national attention for establishing what has become known as a "concierge" medical practice, wherein each patient pays a flat monthly “membership” fee to have unlimited access to the doctors and medical services. For adults up to age 44, Nunamaker charges $50 a month, pediatric services are $10 a month and for adults age 44 and older it costs $100 a month.
Although his clinic doesn’t work at all with insurance, Nunamaker still recommends that consumers carry a policy for more serious and catastrophic needs, just to be safe. “We’re hoping that people don’t see this as a threat,” he says of the insurance industry, “but rather, we’re trying to truly fix the system from the bottom up.”
The cash-based approach to business has also emerged among dentists in the Gem State. “We have approximately 60 dentists participating and about 5,000 members,” said Theresa Jardine, area director for the Dental Cooperative of Idaho. Originally begun in the state of Utah, the company has expanded to Idaho and Nevada.
Noting that the goal of Dental Cooperative is “to preserve and protect independent industry,” Jardine said that “a lot of people can't afford dental insurance, and as a result they just don't go for hygienic dental care and then end up with worse problems which become more costly.” Dentists who participate in the co-op agree to a set fee schedule that is adjusted according to their geographic region, and then they extend a 20 percent discount from that schedule to the co-op’s patients.
Nunamaker’s approach in Kansas emulates ideas that have long been advocated by Idahoan Dr. Loel Fenwick, an obstetrician based in Priest Lake. “Back in the late ‘70s and early ‘80s when I was practicing I was probably the only M.D. in Spokane that did not accept insurance or Medicaid at all,” he told IdahoReporter.com. “I have always felt that the relationship between the patient and the doctor is a privileged one, and nobody should interfere with that, including insurance companies.”
Fenwick told IdahoReporter.com that the establishment of clinics like Nunamaker’s is accelerating, and that there is also an interest in a cash-based system among those who provide things like lab work and x-ray facilities.
And like Nunamaker, Fenwick said that he and his patients benefitted financially from the arrangement. “I was able to charge my patients whatever I thought was reasonable, at the same time I was able to adjust my pricing according to what I thought the means of the patients might have been. Many of my patients had insurance, but they didn’t pay me and I did not process their claims. They were responsible for submitting bills and getting reimbursed.”
Fenwick points to the physician-owned Northwest Specialty Hospital (NSH) in Post Falls as another example of the approach that he and Nunamaker have taken. For patients who don’t have insurance, NSH will reduce its normal fee for services, generally charging patients 30 percent to 50 percent more than the rate at which Medicaid would compensate. Medicaid, generally speaking, compensates practitioners at a lower rate than any other form of insurance.
Both Nunamaker and Fenwick believe that the cash-based approach will continue to gain in popularity among patients and practitioners alike. “There is tremendous interest in this, and it will continue to grow,” Fenwick said.