the Obamacare, Bureaucracy
Dr. Ryan Neuhofel, 31, offers a rare glimpse at what it would be like to go to the doctor without massive government interference in health care. Dr. Neuhofel, based in the college town of Lawrence, Kansas, charges for his services according to an online price list that's as straightforward as a restaurant menu. A drained abscess runs $30, a pap smear, $40, a 30-minute house call, $100. Strep cultures, glucose tolerance tests, and pregnancy tests are on the house. Neuhofel doesn't accept insurance. He even barters on occasion with cash-strapped locals. One patient pays with fresh eggs and another with homemade cheese and goat's milk.
"Direct primary care," which is the industry term for Neuhofel's business model, does away with the bureaucratic hassle of insurance, which translates into much lower prices. "What people don't realize is that most doctors employ an army of people for coding, billing, and gathering payment," says Neuhofel. "That means you have to charge $200 to remove an ingrown toenail." Neuhofel charges $50.
He consults with his patients over email and Skype in exchange for a monthly membership fee of $20-30. "I realized people would come in for visits with the simplest questions and I'd wonder, why can't they just email me?" says Neuhofel. Traditional doctors have no way to get paid when they consult with patients over the phone or by email because insurance companies only pay for office visits.
Why did he choose this course? Neuhofel’s answer: “I didn’t want to waste my career being frustrated.”
This model is growing in popularity. Leading practitioners of direct primary care include Seattle, Washington-based Qliance, which has raised venture capital funding from Jeff Bezos, Michael Dell, and comedian (and Reason Foundation Trustee) Drew Carey; MedLion, which is about to expand its business to five states; and AMG Medical Group, which operates several offices in New York City. Popular health care blogger Dr. Rob Lamberts has written at length about his decision to dump his traditional practice in favor of this model.
"Since I started my practice, I seem to hear about another doctor or clinic doing direct primary care every other week." says Neuhofel.
Direct primary care is part of a larger trend of physician-entrepreneurs all across the country fighting to bring transparent prices and market forces back to health care. This is happening just as the federal government is poised to interfere with the health care market in many new and profoundly destructive ways.
Obamacare, which takes full effect in 2014, will drive up costs and erode quality—and Americans will increasingly seek out alternatives. That could bring hordes of new business to practitioners like Neuhofel, potentially offering a countervailing force to Obamacare. (One example, the Surgery Center of Oklahoma's Dr. Keith Smith, profiled for Reason TV in September, is doing big business offering cash pricing for outpatient surgery at prices about 80 percent less than at traditional hospitals.)
Health "insurance" is more than just insurance; it's also "a payment plan for routine expenses," as University of Chicago business school economist John Cochrane puts it in a superb recent paper. The late free-market economist Milton Friedman pointed out that we insure our houses against fire and our cars against major damage, but we don't also insure ourselves against cutting the lawn and buying gas. That's the main reason innovation almost never makes health care cheaper. Most patients never see the bill for an ingrown toenail removal or a glucose tolerance test, so doctors have little incentive to seek ways to offer their services for less. For simple consultations, why bother with Skype when insurance will pay full price for an office visit.
Insurance plans that cover everything, a situation that came about largely because of a quirk in our tax code, have also led to the "bureaucratization of medical care," Friedman wrote in a 2001 essay, in which "the caregiver has become, in effect, an employee of the insurance company or...the government."
READ FULL SOURCE ARTICLE: 03/13/2013
Editor's Note: If you are ready to rebel against the status quo bureaucracy of institutionalized health care and the further bureaucratization and high prices of Obamacare, check out this immediate solution: FAUSAHealth.org.
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