Thursday, March 7, 2013

The Health Care Innovation Forum:  Trickle-Up Medicine, Also Known as Bottom-up Cash Practice
We who live in free market societies believe that growth, prosperity and ultimately human fulfillment, are created from the bottom up, not the government down. Only when the human spirit is allowed to invent and create, only when individuals are given a personal stake in deciding economic policies and benefiting from their success -- only then can societies remain economically alive, dynamic, progressive, and free. Trust the people. This is the one irrefutable lesson of the entire postwar period contradicting the notion that rigid government controls are essential to economic development.”

Ronald Reagan (1911- 2004)
It isn’t  kosher to evoke Ronald Reagan in this age of Obamacare but something is going on out there that is worth following. 
It goes by the name of cash-only, or concierge, practices.  It is not popular among the government elite who condemn it at “two-tier medicine”  or more harshly, as “trickle-down economics,” with those rich doctors charging an annual fee of $1500 or so to see patients anytime, even on the day they call,  or demanding cash at the point of care if you want to be seen.
If you want to know how the bottom-up experiment is going,  read the experiences of  Rob Lamberts, MD, a primary care physician “somewhere in the southeastern United States,”  who recently shut down  his traditional practice to set up a cash-only practice.  Lambert’s personal chronological account of the transition  is eye opening. 
Here are some excerpts:
“It’s been a month since I started my new practice. We are up to nearly 150 patients now, and aside from the cost to renovate my building, our revenue has already surpassed our spending. The reason this is possible is that a cash-pay practice in which 100% of income is paid up front has an incredibly low overhead.”

“Our attention to care has not gone unnoticed. Yesterday I got a call from a local TV news reporter who wanted to do a story on what I am doing. Apparently she heard rumor “from someone who was in the hospital.” I was the talk of the newsroom, yet I’ve hardly done any marketing.”

“I’ve also gotten interest from a place I didn’t expect: local specialists. I always thought what I am doing applies only to primary care, as it is hard to do a monthly fee for the procedure-oriented specialties. But as the enthusiasm for my new type of practice grows in the community, it may spur a boom in cash-paying patients. “

“Why? One of the provisions in the Accountable Care Act (ACA) is that small businesses (with over 50 employees) who want to avoid the penalty for not having insurance can opt to contract with a direct-care physician like myself in conjunction with a high-deductible health care plan. Even though I have made no effort to attract such interest, I’ve already been approached by 2 businesses of 100 employees to make such an arrangement.”

“The end result is a potentially large influx of patients who are basically self-pay. The specialists, who see me lowering my overhead significantly by taking cash payment up-front, see the same opportunity for their practices. The hitch for them is that they are not allowed to give discounts to self-pay patients that they are not also giving to Medicare patients. “

“This seems quite ironic to me – a sort of “trickle-up economics,” where I am spreading the benefit of offering discounted care in exchange for cash to the higher-paid specialists. It is a win-win-win arrangement, though, as the specialists benefit from reducing their overhead while getting guaranteed payment, I benefit by increasing the value of my type of practice even more to my patients, and the patient benefits by getting cheaper care.”

“ I suppose little should surprise me, in a world where the have-less’s could have their abundance trickle up to the have-mores. Who knows, maybe people will even pay attention to the economic wisdom of a doctor with an accounting impediment.”

Tweet:  A health care experiment is going on out there – cash-only medicine. To learn more. read words of Rob Lamberts, MD, in The Health Care Blog.



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