Will Cash Pay Models Disrupt the Current Health Care Compensation Conundrum?

Some doctors are tired of waiting around for insurance companies to pay them, and many patients can’t find insurance anyway. This has prompted many physicians to attempt to create 100% cash-based practices in order to compensate for these issues.

The thinking is that such a practice will make health care more accessible to more people while sidestepping the kinds of billing issues which can tank the average medical practice. Unfortunately, health care is just too complex to support such models.

One doctor passed on our services, opting instead to create a sort of “members-based” practice. He opened his offices just down the hall from ours so we got a chance to see how his alternative strategy might play out in the real world. The idea was that members would pay $250 per month, per person and could then theoretically see this doctor for any and every medical concern.

There were several problems with this business model. First, it continued to put his services out of the average family’s reach. A family of four would have had to pay $1000 each month to obtain medical care for every member of the family. Even the worst insurance plans don’t typically cost so much, and a bad, cheap insurance plan will still get most patients through the door. Anyone wealthy enough to pay such prices probably already had or could pay for an insurance plan—and this physician was no longer accepting any insurance plans at all.

Furthermore, such a model was only cost-effective for the physician so long as patients were only coming to him to treat minor illnesses. When the issue wasn’t bronchitis or the flu but rather something catastrophic and long-term the $250 in monthly compensation was now far too little to cover the expenses the doctor incurred while addressing these chronic concerns.

It didn’t take long for this experimental practice to go out of business. It would be nice if there were some good way to side-step insurance companies. They’re the only winners in the current health care model. They’re bragging about their record profits while doctors and patients get the short end of the stick. Unfortunately, viable alternatives have not presented themselves, and these alternatives seem unlikely to present themselves anytime soon.

Instead, medical practices should focus on doing everything they can do to recoup money from insurance companies. Our services help practices eradicate some of the most common excuses used by insurance companies when they deny a claim. This means doctors get paid for the services they have rendered fairly and in good faith, and they’re able to keep their doors open without having to experiment with new models of healthcare delivery which may prove to be financially devastating to them in the long run.