Study shows docs in financial shambles

A Washington state study has confirmed the true cost of health care: Last year, the average medical practice lost $95,000.

Researchers for the Washington State Medical Association studied 371 practices across the state, ranging in size from 1 to more than 100 doctors.

Doctors cited low reimbursement from Medicaid and Medicare as the biggest reason for their financial distress. The study also shows that private insurers did not reimburse at a rate that could keep up with the increasing cost of running a practice. Despite decreased compensation, three quarters of physicians surveyed reported having to hire additional administrative staff within the past two years.

One Washington-based organization is trying to help doctors throughout the state and across the country through a program that aims to lower administrative burden and increase doctors’ profit margin. The American Association of Patients and Providers (AAPP) developed SimpleCare, a program that creates a simpler, less-costly system for doctors while lowering the cost of medical care for self-pay patients.

SimpleCare patients agree to pay in full at the time of service, eliminating billing costs. To reduce costs even further, SimpleCare also wipes out the thousands of codes necessary for billing insurers and replaces them with three “simpler” codes: Short, Medium and Long. These reductions in costs allow doctors to lower their prices for SimpleCare patients by 20-50% while still coming out ahead.

SimpleCare is aimed toward patients with either no insurance or with a high deductible plan. According to Dr. Vern Cherewatenko, one of the founders of AAPP, most self-pay patients welcome the idea of paying up-front in exchange for a reduced price. “Many patients I’ve talked to are outraged when they find out how much of their medical bill goes to administration and insurance coding procedures,” Cherewatenko said, “They shouldn’t have to pay for expenses that don’t apply to them. They’re happy to pay up-front in order to avoid paying for that.”

Nearly 200 doctors in Washington and another 300 nationwide are participating in SimpleCare so far, with the number steadily increasing. Patient membership is nearing 4,000 nationwide.

For more information about SimpleCare and the AAPP, go to www.simplecare.com or call 425-255-4166.

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