Doctors And Patients Benefit When Insurers Are Bypassed

Published June 1, 2004

The Joint Economic Committee of Congress held a hearing in April on “Consumer-Directed Doctoring: The Doctor Is In, Even if Insurance Is Out.”

Among the witnesses were Robert S. Berry, MD of the PATMOS EmergiClinic in Greeneville, Tennessee; Alieta Eck, MD of the Zarephath Health Center in Zarephath, New Jersey; Bernard Kaminetsky, MD, FACP of MDVIP in Boca Raton, Florida; and Robert Berenson, MD of the Urban Institute in Washington, DC.

Chaired by Senator Robert Bennett (R-Utah), the committee has been holding a series of hearings on cutting-edge developments in health care, especially on how consumer choice is revolutionizing American medicine.

Doctors Are Frustrated

Bennett began the hearing by pointing out “many doctors are frustrated by the state of our current health care system,” and especially frustrated by “third-party entities interfering in their practice, pushing them toward a system that focuses on arcane regulations, not on patient care.”

Bennett said the hearings will examine the experiences of innovative and entrepreneurial doctors who are responding to gaps in the current system by returning to a consumer-directed style of medical practice.

He added the “early evidence of consumer-directed doctoring suggests that some physicians and patients are reacting favorably to this way of providing care.”

Dr. Robert Berry

Berry testified his clinic focuses on “the unique needs of the uninsured [who are] the most cost-effective health care consumers.” He used to be an emergency room physician and found many of his patients who came in for routine services are “neither destitute nor derelict.” Rather, they are hard-working people who pay their bills and resent how they are treated in government clinics.

Berry posts his prices in the clinic and in advertising–$25 to treat poison ivy, $35 for a sore throat, $95 for a simple laceration. He said, “The only way I can keep my prices so low is by avoiding the crushing overhead and hassles that other physicians allow third-party payers to impose on their practices.” He currently has nearly 5,000 patient charts, of which 51 percent are uninsured (a statistic that helps to show the “uninsured” do not necessarily go without health care). Of the remaining patients, 38 percent are commercially insured, 8 percent are on Medicaid, and 3 percent are on Medicare.

Berry said he is not alone in what he is doing and cited many other physicians across the country who are taking similar paths.

Dr. Alieta Eck

Eck testified that in her state of New Jersey it is virtually impossible to buy health insurance unless your employer provides it for you. Due to misguided state regulations, the premium for even modest coverage for a single person ($1,000 deductible and 70/30 coinsurance) ranges from $912 to $4,419 a month. (See “The New Jersey Care Wreck,” Health Care News, February 2004.)

The number of people in New Jersey with individual insurance has plunged from 220,000 in 1996 to 90,000 today. In that environment, Eck said, there are plenty of people who can afford to pay for medical care, but cannot afford health insurance.

Eck’s four-doctor practice takes no insurance except Medicare, and it employs only one full-time employee, a bookkeeper, and six part-time nurses and receptionists. This is quite a contrast from the five-to-one ratio of full-time employees per doctor prevailing across the country. Her testimony cited many examples of patients who have benefitted from the services she provides.

Dr. Bernard Kaminetsky

Kaminetsky said he joined MDVIP (MD for doctor, VIP for very important patient) “in order to provide my patients with comprehensive preventive care services that unfortunately can no longer be offered in a traditional primary care setting.” He said when managed care came along it distorted medical practice by paying so little physicians had to rush patients through the visit, precluding the time it takes for a preventive approach to their medical needs.

He pointed out that in a typical managed care practice with 2,500 patients, one would have to work 50 hours a week for 50 weeks to provide each patient with a comprehensive hour-long physical exam–leaving no time at all for acute care needs. He joined MDVIP to get his caseload down to 600 patients and offer more time for each patient.

Dr. Robert Berenson

Urban Institute’s Berenson provided the only sour note, arguing fee-for-service practices such as the doctors described hinder cost containment efforts and “exacerbate current problems with access to services for the uninsured and underinsured.” While he acknowledged the frustrations physicians face, he believes those frustrations “represent symptoms of a system lacking universal, comprehensive health care insurance.” He concluded that “at its best, providing substantial health care services for much of the population outside of insurance is an elitist notion.”

The discussion after the testimony was largely friendly and productive, with even Congressman Pete Stark (D-California) agreeing there is merit to the approaches described by Drs. Berry, Eck, and Kaminetsky.

Stark’s one concern was whether consumers are sufficiently informed to shop effectively for medical services the way they can shop for other services. But the witnesses did a lot to reassure him on that point.

Source: You may link to the testimony of these witnesses and others at the Galen Institute’s Web site,

SimpleCare Concept Taking Hold

The magazine Medical Economics picks up on the fee-for-service trend in an article headlined, “No Coding, No Insurers–No Kidding.” Senior Editor Robert Lowes writes, “It might be time to consider a cash-only practice. Your income may drop, but your overhead will decrease and your job satisfaction could soar.”

The Nirvana is described as “No more arguing with insurance clerks about denied claims. No more fears of a Medicare audit.” The article cites Dr. Rick Baxley of Orlando, who dropped all insurance contracts in 2000 and reports, “I earn roughly what I did back then, but I’m not working from 6 a.m. to 9 p.m. anymore. And I’m building relationships with patients, which is why I entered medicine in the first place.”

Bethesda, Maryland internists Jane Chretien and Audrey Corson say they “have extended the length of the average visit from 8 minutes to about 25 minutes.” They maintain, “When visits are longer, you get to know your patients. You can put their complaints in a bigger context.”

Dr. Vern Cherewatenko, originator of the SimpleCare concept, is quoted as saying “a cash-only soloist probably can operate with just a receptionist and a medical assistant.”

The article provides some advice for physicians thinking about moving in this direction: Cut ties with insurance companies gradually, starting with the worst payers; drop Medicare last, especially if you have a large number of patients on Medicare; and “be prepared to scramble initially to make ends meet.”


Greg Scandlen is director of the Galen Institute’s Center for Consumer Driven Health Care and assistant editor of Health Care News. His email address is [email protected].