On Aug. 23, 2014, Reuter’s article called, “‘I don’t take insurance’ not always a doctor deal-breaker,” author Beth Pinker explains how this typically plays out for a person seeking care.
As more and more people realize the extent of the funds they will need to spend before they gain access to insurance coverage — the average deductible is now $5000 — Physicians are waking up to the fact that insurance and government reimbursements are too low for their “business” of medicine to survive. Recent numbers indicate that 40 to 50% — in some cases more — have already decided to opt-out of insurance and move to the so-called concierge, i.e., retail, medicine.
The physician’s attraction is a faster payment, and in most cases, a higher margin on the services performed. One of the big drivers is the total size of the pot of deductibles that will need to be spent for full insurance to kick in for the insured.
Some argue that the average deductible is not really $5000, that it is closer to $3000 per year. Still, with over 186 million insurance policies in the U.S., this lower estimate yields a total available market — called TAM by marketers — of $500 billion that must be spent before insurance coverage kicks in. Any marketer will tell you; this makes desired value-based deductible, retail healthcare one of the largest market opportunities out there.
It is not surprising that many doctors have already moved to some form of a retail model. Even physicians that feel they need to keep one foot in the reimbursement-based model are exploring ways to augment this with more direct pay services. Companies like https://pokitdok.com/ are helping physicians pave their way into a more sustainable healthcare service model. Many more are working with doctors to help them manage their margin and mix of patients and find incremental revenues from historically unavailable sources.
Most physicians would be well served to look at these alternate revenue models, and the evidence clearly shows most already have. In the long run, this is a good and necessary step. It portends the start of what likely will finally become an effective and efficient healthcare system.
For some, this may seem counter-intuitive, but it is really the step that must be taken. In the end, it will help set up a good basis for the additional evolutionary steps to design an effective and efficient system. A system that can ensure we have the resources to “Help the Helpless” while providing value-based choices for those who can afford more. Most importantly, this will help provide a basis for integrating and managing the two economies through a common administrative system eliminating duplication of services, waste, and fraud while bridging those in crisis together with all available resources necessary to treat their complete needs provide comprehensive and fully coordinated care. By now, we all know this improves patient outcomes and lowers costs.