Control Your Health Care Costs by Paying Cash

I’ve been reading  Control Your Destiny Or Someone Else Will (Doubleday, 1993).  It’s the story of how CEO Jack Welch (born 1935) turned G.E. into the world’s most competitive company.

Welch is now retired, is a best selling author (Winning), and is married to former editor of the Harvard Business Review.

I was wondering if Welch’s six rules for competitive success apply to physicians.

The six rules are:

1)       Control your destiny or someone else will.

2)     Face reality as it is, not as it was or as you wish it were.

3)     Be candid with everyone.

4)     Don’t manage, lead.

5)     Change before you have to.

6)     If you don’t have a competitive advantage, don’t compete.

One,  the destiny of physicians lies in controlling  their relationships with consumers and patiients.  The hue and  cry nowadays  are consumer-driven care, consumer-centric care,  and patient engagement.   This is something physicians are very good at.  Yet someone else, mainly government and insurers and big hospital systems,  seek to control physicians’ destinies  by serving as middlemen.

Two,  the reality is that health care reform is a very tough game,  and big organizations  have leverage over physicians through their size, corporate structure, and marketing clout.

Three,  candidly,  physicians have been losing the game and are selling out and becoming  passive employees of hospitals and large integrated health systems.

Four,  leading , not managing, is key to getting back into the game.  This may be happening.   Through organizations like  Unified Physicians and Surgeons,  physicians are clawing back into the limelight by insisting that things like  the time  and hassles spent on credentialing,  interfering with patient relationships, mandatory electronic  health records, and data-driven care,  are often counterproductive, distract from patient care, and do not advance quality or cut costs.

Five,  physicians must  change if they are to ward off being secondary actors in reforming our health system.   They must  take a more central role in reform.  They must  join the reform conversation.    They must become more vocal, more visible, and more positive on how to reform the system.

Six,  physicians  cannot effectively  compete with large organizations  in  national marketing campaigns or in governing all aspects of the system.  They must act locally,  sometimes act in concert with hospitals,   and present attractive options to consumers.

One of these options is lower costs for consumers through direct cash transactions.   In this age of  high premiums and unaffordable deductibles,  physicians can offer deep cash discounts.    In today’s Wall Street Journal,  reporter Melinda Beck  describes this option  “How To Cut the Health Care Bill: Pay Cash:  Hospitals and Other Providers Increasingly  Offering Cash Prices Far Below What They Can for Insurance.”   She gives three examples of how consumers cut hospital bills over insurer bills by 15% of an MRI of the foot, 47% for tonsillectomies, and 45% by an MRI of the knee.    

There is nothing new about this.  It’s Free Market Health Care.    The Surgery Center of Oklahoma  often charges 1/6 of what hospitals charge for routine outpatient surgeries.  Concierge medical practices charge far less than traditional insured practices by offering retainer cash prices for bundles of primary care services.   For patients,  as my wife’s father used to tell her,  “A dollar bill is your best friend.”