It’s been a month since I started my new practice. We are up to nearly 150 patients now, and aside from the cost to renovate my building, our revenue has already surpassed our spending. The reason this is possible is that a cash-pay practice in which 100% of income is paid up front has an incredibly low overhead…The end result is a potentially large influx of patients who are basically self-pay. The specialists, who see me lowering my overhead significantly by taking cash payment up-front, see the same opportunity for their practices […]
This system might not seem all that different than insurance at first. Indeed when a NYC doctor tried a similar system, the city ruled that it was effectively an insurance program and forced him to raise the price he charged per visit (after a compromise, the NYC program is still going). But the subscription plan cuts out all the administrative costs of insurance which make up almost 25 percent of the overall price of care by some estimates. By eliminating the middleman between doctor and patient, this system could potentially allow better, cheaper, and more direct care.The subscription scheme isn’t a cure-all for our healthcare woes. Most people using it would still need to buy insurance to cover specialists and catastrophic costs, and it might not work particularly well for those who under or over consume care. But for those who require regular but moderate care, a plan like this could be far cheaper than one that charges you per visit through insurance.This isn’t a completely novel idea—thinkers, like David Goldhill, have been making the case for plans that combine catastrophic insurance with pay-as-you-go primary care for some time now—but it’s exciting to see it actually happening. No doubt, as happened in NYC, coalitions of state and private forces with a vested interest in the current system will work to stop these kinds of innovations. It’s up to far-seeing politicians and citizens to help navigate the US past these obstacles and towards the future that waits for us beyond the blue.