Doctors Shun Insurance, Offering Care for Cash
By ALEXA URA
APRIL 10, 2014 – LAREDO, Tex. — For 12 hours a day, the waiting room at Dr. Gustavo Villarreal’s family practice is packed with patients who pay a flat $50 fee for the convenience — or necessity — of a walk-in, quick-turn doctor’s visit.
Efforts at both the state and federal level are underway to decrease Texas’ sky-high rate of residents without health coverage. But in a city where nearly a third of the population lives below the poverty line, Dr. Villarreal does not accept health insurance. Instead, he has switched to a cash-based model, eschewing the laborious practice of filing out insurance forms in order to get paid.
Doctors who use the model, which they call “direct primary care,” say they can keep their costs down by avoiding the bureaucracy of the health insurance system and the high processing costs — including additional staff — associated with accepting coverage.
“It had always been affordable and possible to maintain a practice with what insurance and patients paid, but about 10 or 15 years ago, you started seeing a decline” in revenue, said Dr. Villarreal, who switched his traditional family practice to its current business model in 2012.
Most direct primary care doctors limit their services to basic or preventive care — treatment their patients can afford without turning to their insurance providers — like prescribing medicine for colds and infections, treating minor lesions and overseeing long-term care for conditions like diabetes and osteoporosis.
When patients need additional treatment for serious ailments or tests and procedures that cannot be done in-house — like M.R.I.’s and X-rays — physicians working under this model refer patients to specialists and technicians who accept insurance.
While many of his patients are uninsured, Dr. Villarreal, who has been practicing medicine for more than three decades, said he regularly treats patients who have health insurance but are trying to avoid the need of meeting high deductibles.
Some health care specialists worry that if too many practitioners choose this path, the state could be left struggling to find doctors to accommodate patients with insurance as the federal health care overhaul is making such coverage mandatory for most Texans. So far, efforts to enroll Texans in the federal insurance marketplace — crucial to the success of the Affordable Care Act — have made a small dent in the state’s uninsured population, which has reached 6 million, according to United States Census Bureau data. The federal Department of Health and Human Services reported that 295,000 Texans had signed up for insurance coverage in the federal marketplace as of March 1.
“We have to find ways of stretching the current number of primary care doctors to meet that demand,” said Dr. Clare Hawkins, president of the Texas Academy of Family Physicians. “Direct primary care goes in the other direction.”
Insurers say consumers should have flexibility when it comes to their health services, but they warn that not having health insurance leaves individuals unprotected from the hefty price tags associated with unanticipated medical costs.
“Consumers should anticipate their medical needs,” said David Gonzales, the executive director of the Texas Association of Health Plans. “However, when that is not possible, consumers should have financial protection from the unexpected.”
The direct primary care model is not new. Before Congress passed legislation in 1973 that led to the expansion of managed care through prepaid health plans, or health maintenance organizations, physicians largely operated through this fee-for-service medical model. And the percentage of doctors who have reverted to this approach in Texas in recent years is not huge: 10 percent of state physicians do not currently have contracts with health insurers, according to preliminary results from a 2014 Texas Medical Association survey. (The T.M.A. and the Texas Association of Health Plans are corporate sponsors of The Texas Tribune.)
Lee Spangler, vice president of medical economics with the medical association, said Texas was seeing an increase in practices like these because they gave doctors more flexibility to determine the services they provide and to cut costs for their practices.
“A physician has very little ability to negotiate all policies and procedures that come with insurance contracts,” Mr. Spangler said, adding that some insurance companies can even dictate the business hours during which doctors can be paid. “Basically you get rid of all those shackles in terms of having a carrier dictate to the practice how to deliver medical services.”
It is the direct primary care business model that proves most attractive, Mr. Spangler said, adding that doctors “want to get out from under what has been stacked up on them.”
Under the current health insurance system, physicians who treat covered individuals submit claims for the services they provide and receive reimbursements to cover their costs. Private insurance providers and government-subsidized health programs like Medicare and Medicaid each have their own rules and regulations for filing claims, including specific time frames and billing systems.
Health providers who treat poor children and people with disabilities also face heightened scrutiny from state and federal agencies responsible for rooting out possible fraud, leaving some providers on edge that they could be subject to unwarranted or costly investigations.
Doctors who have embraced the model have done so with a range of approaches. And most boast that the costs they have cut by forgoing insurance give them the ability to scale back on the number of patients they must see each day to turn a profit.
In Austin, Drs. William and Mason Jones — a father-son team — practice “concierge medicine,” treating patients under a membership model in which patients pay annual fees for access to a variety of services, including unlimited office visits, routine vaccinations and round-the-clock medical assistance by phone.
Mason Jones said his office was a “low-volume practice” that gives him the “luxury of time” to spend with patients. “This works out great for preventive medicine,” he said.
In Corpus Christi, Dr. Coleen Madigan works two days a week, during which she visits with about five patients a day and is able to make house calls. She said this gives her the opportunity to spend as much time with her patients as they require.
In Laredo, Dr. Villarreal has had a different experience. His business model frees up time for him to see more patients, he said, without the added costs that come from filing insurance claims. He still sees 40 to 60 patients a day, he said, 20 of whom tend to be new to his practice.
“To me, there’s no other way I would practice medicine,” he said. “You feel like you’re a doctor again.”
This story was produced in partnership with Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.
A version of this article appears in print on April 11, 2014, on page A19A of the National edition with the headline: Doctors Shun Insurance, Offering Care for Cash.
Source: The New York Times, The Texas Tribune | http://www.nytimes.com/2014/04/11/us/doctors-shun-insurance-offering-care-for-cash.html?emc=edit_tnt_20140410&nlid=58462464&tntemail0=y&utm_campaign=KHN%3A+First+Edition&utm_source=hs_email&utm_medium=email&utm_content=12475420&_hsenc=p2ANqtz–d8bTPJsSfK_b7Lyu0ZbHoXXYrCLgQHA6YDaYTBBu-03eyqVDpigdr-d316wUcHkksrTTaKYtqO8IeLylY3_Rls8mOig&_hsmi=12475420&_r=1