The Cash Pay Model vs. Insurance

Cash payIf you receive your insurance through your employer or now through the Affordable Care Act, you’re familiar with “open enrollment” for health insurance. You likely have a few options from which to choose, each with a deductible and a monthly insurance premium. If you’re generally healthy, you choose the higher deductible and the lower monthly premium. If you’ve been around the block a few times with health issues, you’ll probably choose the lower deductible and pay more of your take-home pay each month on health insurance premiums.

So you get sick and go to the doctor. Once there, you have a co-pay (the additional sum that’s paid to the provider when services are rendered, and not in any way part of your deductible). If you need a prescription, you pay an additional fee, not part of your deductible. Several weeks later, you get a bill from the doctor’s office for the balance of what your insurance company didn’t pay. If you have a $5,000 deductible (which is very common), you’ll end up paying out-of-pocket costs every time you get sick until you reach that dollar amount. Remember, you’re still paying a monthly premium in addition to all of these extra charges.

On the healthcare provider side of things, doctor’s offices employ groups of people whose job it is to provide insurance companies with specific codes in order to receive payment for their services. Sometimes the insurance company pays. Sometimes they don’t. In addition to the fixed costs of running a business (property rental, taxes, supplies, utilities), hiring people whose sole purpose is to ensure the office gets paid for services rendered adds to the operating costs of keeping the office open. And as with all businesses, that cost is passed along to you, the consumer.

Wait, you’re a consumer? Of healthcare? Exactly. And as a consumer, you have the ability to make smart budget choices. You do so all the time. Catching a sale on a piece of clothing, clipping coupons to use at the grocery store, shopping around for your next vehicle purchase, all of this is part of being a smart consumer. In the traditional insurance model, you aren’t a consumer. You have little to no ability to not only dispute what the insurance company will or won’t pay for, but little obvious knowledge of what you’re ending up paying for.

Part of Dr. Andry’s revolutionary approach to healthcare comes from creating an actual healthcare marketplace. This isn’t the Obamacare marketplace-this is an actual pay-as-you-go system that allows you, the consumer of healthcare, to know and decide what you’re paying for, how much it costs, and why it’s necessary. Because the cash pay model provides up-front pricing, you are armed with the knowledge of exactly what’s being done and how much it actually costs. There are no insurance middlemen, there are no employees whose job you’re paying for simply to charge you more money. There are no premiums coming out of your paycheck, there are no deductibles and no additional hidden fees or massive, unexpected bills later on.

The financial portion of any healthcare transaction is a business transaction. You wouldn’t dream of using the insurance model to make repairs to your house. Imagine money coming out of your paycheck every week to pay a home repair insurance policy, and then when you actually need to use it, the contractor needs a co-pay up front, and then bills you for your deductible and then an additional percentage of what’s left over. It doesn’t make sense in home repair, and it doesn’t make sense in body repair.

Health insurance plans have a very real value. The ability to pay a large percentage of major medical expenses, including accidents and major illnesses, helps millions of people receive access to the emergency healthcare services they need without breaking the bank. The same type of financial piece of the puzzle is why Dr. Andry uses a cash pay model. Sometimes, in those rare and expensive instances, health insurance plans can pay for themselves many times over. In most cases, and for most people, paying only for the services rendered is a sensible option. Health insurance should be viewed the same way home and auto insurance is viewed. One doesn’t make a claim on their homeowners’ policy when they change a light bulb.

Patients are still able to file claims with their insurance companies. As a fully accredited healthcare provider, these claims would simply be applied to out-of-network deductibles. Patients are welcome to use their HSA accounts, which is something Dr. Andry strongly supports. Providing access to tax-free funds dedicated to general healthcare services is just smart business.

cash pay modelThe cash pay model instantly cuts healthcare costs for both consumers and providers by eliminating the fees and premiums associated with insurance carriers, as well as lowering the cost of providing healthcare by not having to pass along the costs of staff and their associated benefits, and the cost of medical payment default. No insurance premiums, deductibles or copays; lower costs for healthcare services; transparent and clear pricing. The cash pay model is built for the healthcare consumer and provider, not the insurance companies.

The majority of healthcare providers can apply this model to their own practices. By eliminating billing and the associated payment difficulties, providers can focus on what they’re supposed to be focusing on-helping people get and stay healthy. Once the model is clearly explained to patients, and they understand the value to them, patient care can take center stage. This is the kind of patient care that is a partnership, and is tremendously more effective than traditional billing models.