US Doctors rejecting Bureaucracy

Back when I started work, I learned a valuable lesson from my boss.

My boss ran his department lean. He focused on the key deliverables, had minimal management, and kept a tight eye on costs.

From that I learned one thing: if you keep your overhead costs low, you’ve already won much of the battle.

That’s a lesson that some are learning in the US health system.

OUTH PORTLAND, Maine — Dr. Michael Ciampi took a step this spring that many of his fellow physicians would describe as radical.

The family physician stopped accepting all forms of health insurance. In early 2013, Ciampi sent a letter to his patients informing them that he would no longer accept any kind of health coverage, both private and government-sponsored. Given that he was now asking patients to pay for his services out of pocket, he posted his prices on the practice’s website.

The change took effect April 1.

“It’s been almost unanimous that patients have expressed understanding at why I’m doing what I’m doing, although I’ve had many people leave the practice because they want to be covered by insurance, which is understandable,” Ciampi said.

Before the switch, Ciampi had about 2,000 patients. He lost several hundred, he said. Some patients with health coverage, faced with having to seek reimbursement themselves rather than through his office, bristled at the paperwork burden.

But the decision to do away with insurance allows Ciampi to practice medicine the way he sees fit, he said. Insurance companies no longer dictate how much he charges. He can offer discounts to patients struggling with their medical bills. He can make house calls.

“I’m freed up to do what I think is right for the patients,” Ciampi said. “If I’m providing them a service that they value, they can pay me, and we cut the insurance out as the middleman and cut out a lot of the expense.”

He has lost a lot of business from people who want their insurance to pay the bill, but those who are prepared to pay for themselves are making significant savings.

Even with the loss of some patients, Ciampi expects his practice to perform just as well financially, if not better, than before he ditched insurance. The new approach will likely attract new patients who are self-employed, lack insurance or have high-deductible plans, he said, because Ciampi has slashed his prices.

“I’ve been able to cut my prices in half because my overhead will be so much less,” he said.

Before, Ciampi charged $160 for an office visit with an existing patient facing one or more complicated health problems. Now, he charges $75.

Patients with an earache or strep throat can spend $300 at their local hospital emergency room, or promptly get an appointment at his office and pay $50, he said.

It seems that the US insurance industry is paperwork heavy, which is leading to considerable paperwork – and processing paperwork cost money. By cutting out those overheads the practice is able to focus on it’s core business, and that means the patients are winning.

Contrast that with the previous government’s actions here – a massive increase in paperwork in order to deliver “cheaper” healthcare, which as we can see, really ends up costing more overall. Most of us would be better off had the government simply gotten rid of the cost overhead, let doctors charge the cost of medicine, and matched that with a tax cut.  And Obamacare is going down the exact same road.

There’s an interesting postscript here from Instapundit, who is married to a psychologist:

Some of Helen’s psychologist friends have gone all-cash. They thought they’d lose business, but wound up with more patients, more money, and (much) less hassle.

I wonder how many patient’s care has been compromised over the years because government (and insurance) paperwork has distracted them from doing their real job?

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