Published in Physical
Therapy Products -- September 2000
Greg Thompson
The color red often means
danger. Red signs implore us to
stop while red ink symbolizes debt. Perhaps
most ominous for the healthcare provider is red tape. With this in mind, I went searching for out-of-the-box ideas
for cutting red tape. A concept
called SimpleCare caught my eye.
SimpleCare is a program
developed by the non-profit American Association of Patients and Providers (www.aapp.net).
AAPP encourages healthcare providers to charge a reasonable fee to
patients willing to pay in full at the time they are seen.
No insurance companies, managed care organizations or government programs
are involved.
What is a “reasonable”
charge? The costs of such things as
office visits and X-rays are typically half of what a regular clinic would
charge. The savings come from
bypassing the bureaucracy. No staff
is needed to get managed care approval, file endless claims or coax payment from
insurance companies. Clinicians
spend time treating patients, instead of fighting with third-party payors.
With reduced government
reimbursements and continuing managed care restraints, the idea is gaining
relevance. After an initial spurt
of media attention including the NBC Nightly News and Wall Street Journal, the
SimpleCare concept has spread to more than 40 states.
Two family doctors in
Renton, Washington, started SimpleCare after a losing battle with managed care.
Vern Cherewatenko, MD, MEd, and Dave MacDonald, DO, had the largest IPA
in Washington state. While
practicing within the guidelines of managed care, they lost $80,000 per month.
Here’s how the losses
added up: Their charge for a 10-minute office visit was $79.
Insurance companies typically reimbursed $43 and it cost up to $20 to
chase down that $43. That left $23
to pay their $30 worth of overhead. The
result was a loss of $7 per visit.
They began offering
patients their “best price” if the patient was willing to pay in full at the
time of the visit. Best price is a
key concept because physicians typically charge relatively high fees that they
rarely collect from third party payors. The
only people who end up paying the inflated fees are the uninsured who often pay
cash.
Drs. Cherewatenko and
MacDonald now charge $35 for a 10-minute visit. They are making a reasonable profit and find that patients,
especially the uninsured, are delighted. It
should be noted that SimpleCare is not an all-or-nothing proposition, and most
practices do accept business from insurance companies that provide adequate
reimbursement.
Aided by a website (www.simplecare.com)
that helps patients find SimpleCare practitioners, the idea has spread to a few
physical therapy practices in Washington. Rob
Parker, PT, owner of Whitworth Physical Therapy in Spokane, WA, signed up four
months ago. Parker’s SimpleCare
charge is $20 for a 20-minute office visit.
As a consumer-driven model,
SimpleCare depends heavily on employers adopting the defined contribution
approach, which allows employees to purchase their own insurance.
Some companies are going this route, but the movement has been limited
because money given to employees to buy healthcare is still taxable income.
Drs. Cherewatenko and
MacDonald say that if given the chance, more consumers will do for their body
what they do for their cars. They
will pay cash to treat minor ailments and buy insurance for the major ones.
Once this is grasped, they believe the idea of tax-free medical savings
accounts will catch on.
Physical Therapy Products
will continue to examine new ideas that cut red tape and make it easier for
physical therapists to do their jobs. If
you have tips on cutting the red tape of Medicare and managed care, I encourage
you to write me a letter and share your ideas with our readers.
Greg
Thompson
gthompson@medpubs.com