Cash for Health Care
By David Henderson
Fed up with declining payments and rising red tape, a small but growing number of doctors is opting out of the insurance system completely. They’re expecting patients to pony up with cash.
Some doctors who have gone that route love it, saying they can spend more time with and provide higher-quality care to their patients. Health advocates are skeptical, worrying that only the wealthy will benefit from this system.
So begins a CNN story titled “Cash-only doctors abandon the insurance system” by Steve Hargreaves. I just noticed that it’s from June 11, 2013, but I missed it at the time and I think it’s worth posting about.
Here’s one of the things that pleasantly surprised me given my prior view about prices, a view based in part on asking around in the Monterey area:
So Nunamaker and his partner set up a membership-based practice called Atlas M.D. — a nod to free-market champion Ayn Rand’s book Atlas Shrugged. Under the membership plan — also known as “concierge” medicine — each patient pays a flat monthly fee to have unlimited access to the doctors and any service they can provide in the office, such as EKGs or stitches.
The fee varies depending on age. For kids, it’s $10 a month. For adults up to age 44, it’s $50 a month. Senior citizens pay $100.
Senior citizens pay only $100 a month? Holy cow. That’s about half what my investigation showed locally. Of course, Wichita, Kansas ain’t, cost of living-wise, Monterey, California.
And I loved this paragraph:
The office has negotiated deals for services outside the office. By cutting out the middleman, Nunamaker said he can get a cholesterol test done for $3, versus the $90 the lab company he works with once billed to insurance carriers. An MRI can be had for $400, compared to a typical billed rate of $2,000 or more.
Shortly after my book The Joy of Freedom: An Economist’s Odyssey came out in September 2001, a doctor in Tennessee emailed me and told me that he was doing something similar and that the motivation for it was the same kind of thinking I had in chapter on health care. Unfortunately, when my office burned down in 2007, I lost that email.