Direct Pay Doctors : One Incredible Way Businesses in Bakersfield Can Save Money on Their Health Insurance Costs Now
The season for businesses and families to shop for health insurance programs is upon us. But the costs, year after year, continue to climb. And as these health care costs go up and up, it makes it far more difficult for businesses to remain profitable, and for families to pay their bills. So here are a few of our recommendations for businesses to control their costs, and save money on their health care for the coming year.
Start here: Connect with a “Direct Payment” Primary Care Medical Practice, and form a relationship with the practice. Cash pay doctors, or pre-paid medical offices are springing up all around the country, from Bakersfield to Boston. At this time they represent about 8% of all Primary Care medical practices in the country, and the trend is growing.
What makes “Direct Payment” offices such a costs saving option is that they do not typically bill insurance companies for reimbursement. They are paid in one of three ways: either directly by the patient at the time services are rendered, and usually at a steep discount; or they are paid directly by the patient on a monthly fee basis – a membership medical model – where many common services are included in the monthly fee; or finally, they are paid directly by a business who contracts with the Medical Office to provide Primary Care services to their employees.
This is a “back to the future” trend in medical offices, as physicians are finding that 30% or more of their office costs are spent on processing the forms, keeping the chart notes and other paperwork, and meeting the other requirements needed just to file an insurance claim for a patient. Then once the claim is filed, the office often has to wait 30 to 90 days for possible reimbursement, or for a denial of payment.
Many doctors are beginning to wonder why they need to have a “business relationship” with an insurance company at all. They provide the care to their patient, not to the third-party business called an insurance company.
It is with Primary Care, or Family Medicine, that these savings are most often realized. Primary Care doctors provide about 85% or more of all the medical care needed in the country. But when everyone expects their health insurance company to pick up these charges, the costs for every office visit skyrockets, as does the cost for every health insurance policy. However both studies and experience shows that if people paid out of pocket directly to their physicians for Primary Care visits instead of having the physician bill insurance companies for reimbursement, the costs for both office visits, and for health insurance, would both go down dramatically.
These physicians are finding that when they keep the relationship with their patients at the simplest of levels – i.e. the doctor treats the patient, and the patient pays the doctors for the service – that the costs for these services are dramatically reduced for both the patient and for the doctor. Everybody wins, and everybody saves money.
The direct primary care model is not new. Before Congress passed legislation in 1973 that led to the expansion of managed care through pre-paid health plans, or health maintenance organizations, physicians largely operated through this fee-for-service medical model.
The High Deductable Advantage
Combining a high deductable insurance policy with a membership at a Direct Pay or Concierge Medical Office can realize real savings – savings that can be enhanced with the monies coming from a Health Savings Account and its tax benefits. Here is the strategy:
In one state for example, a “Bronze Plan” (in 2014) with a $6,000 deductable for a 55 year old male costs about $3,700 per year. With the $6,000 deductable plan, this man would expect to pay for his office visits to his Primary Care physician “out of pocket” at the time he received the services.
In this same state, the same man would pay $7,800 for his health insurance policy with no deductible amount. In this plan he would not have to pay for his office visits out of his own pocket at the time he received his services from his doctor. These charges would be billed to his insurance company.
Sounds better, doesn’t it?
But is this worth the extra $4,100 per year that this man will pay – has to pay – just to not have to pay his doctor directly when he needs services? Would it be worth paying $4,000 per year to you?
If the cost to see your doctor for a sore throat was $200 for the office visit, and he billed your insurance company to be reimbursed – you could reasonably expect that you could receive the same services from a “Direct Pay” or “Cash Pay” physician for about 35% less – or about $130.
What is the difference in costs? That extra cost goes to hiring someone to file the insurance claim, process the insurance checks when finally received after 30-90 days, files appeals when the claims are denied (which is common), send out invoices on balances due, and write off uncollected balances at the end of the year. These costs add up in a medical office. Computer equipment, software updates, office space for the billing department, additional phone lines, forms, manuals, office supplies, training and compliance costs, extra time spent by the physician filling out reports, and more. The expenses pile up month after month.
Direct Pay Medical Offices don’t have these expenses, so they reduce their fees and streamline their office process.
So here is the combination to consider:
Enroll yourself, your family, or your employees as “Members” of a Direct Pay medical practice. The typical fees range from $70 per month per person, to $150 per month per person, with discounts for children. These monthly fees typically cover routine annual physicals, often include common lab tests and office procedures, and these offices offer huge discounts on contracted services such as imaging or seeing a specialist. Since these Direct Pay practices have Primary Care doctors, and often Urgent Care services in house, about 85% of all medical services that a family would need over the course of a year are addressed at the practice – all for a low, locked in monthly membership fee.
In Bakersfield there are only a few of these Direct Pay medical offices to connect with. By “googling” Direct Pay Medical Office Bakersfield one would get a list of the options for Kern County. The largest such office is “The Practice” of Dr. Jan Mensink, a family practice physician. “The Practice” has been around for four years and has grown into one of the top fifteen largest and most successful Direct Pay practices in the nation. Other such medical offices around Bakersfield will also be growing as this is one of the most exciting trends in medical care for the future.