February 2000 Bulletin

It's simple; it's cash

Plan cuts out insurer

Lawrence w. Snow, MD, examines Stephanie Michelson

Looking for a way to expand his practice with patients who are not in managed care plans, Lawrence W. Snow, MD, enrolled in SimpleCare which enables him to provide quality for uninsured or underinsured patients at an affordable price. And, he avoids the hassles and reduced reimbursements that come with managed care plans.

Patients enrolled in SimpleCare pay with cash, check or credit card a fee for medical care that is determined by the doctors. "Patients pay a (cash) fee that does not include the excessive billing and administrative expenses and frequently this can be a 35 to 50 percent savings," says Vern S. Cherewatenko, MD, one of SimpleCare’s founders who is in family practice in Seattle, Wash. "This way, patients are paying a fair price for what they get."

"It cuts out the middleman [the insurance company]," says Dr. Snow, an orthopaedic surgeon in group practice at The Sports Medicine and Hand Center in Seattle, Wash. "For instance, our practice bills the insurance company $100 for a visit and we get paid approximately 35 cents on the dollar," he says. "With SimpleCare, I bill the patient $60 and they pay me cash. I make $60 and there are no hassles of using CPT codes or other red-tape billing."

But is this plan ideal for payments for surgical procedures?

According to Dr. Snow, "it is" because they can discount outpatient surgical procedures up to 50 percent.

Since November 1999, he’s enrolled 20 SimpleCare patients. "These patients were just walk-ins," he says. "We simply asked them if they’d like to be in the plan and handed them a brochure. I believe more patients will sign-on to the plan when our advertising in the Yellow Pages and on our web site begins in April. I suspect we have between 5 and 10 percent of my patients who are paying cash and have no insurance; they might be interested in the plan."

Patients pay an annual SimpleCare membership fee of $20 per individual or $35 per family. The patients are free to choose their own physician, have no authorization requirements, deductibles or worries about paying more for pre-existing conditions. Dr. Snow pays $35 a year (per physician in his group) to be a SimpleCare health care provider.

SimpleCare was designed in 1997 to specifically appeal to the patient who does not have health care insurance, or has a Medical Savings Account (MSA) or high deductible policy and wants to lower out-of-pocket medical costs," says Dr. Cherewatenko. "SimpleCare is a way for doctors or any other health care provider to attract new cash payments and turn to the insurance companies and say, ‘I don’t want to do business with you anymore.’"

More than 200 physicians in 40 states have joined the plan. "We’re adding 25 to 50 physicians a week," says Dr. Cherewatenko. "Right now, we’re being contacted by various state medical societies, some major medical insurance carriers and patient advocacy groups."

To help market SimpleCare, its founders formed the American Association of Patients and Providers (AAPP), a nonprofit organization in Renton, Wash. When patients and physicians join SimpleCare, they automatically become a member of the AAPP which offers discounts on more than 500 health products and access to medical wellness programs, MSAs, high deductible insurance policies and other services.

To Dr. Snow, there is really "no solution" to managed care until the third party payer is cut out of the physician-patient decision-making and financial arrangement. "I need to deal with my patient just like I deal with my attorney, mechanic or anyone else [paying cash for a service]," he says. "When I see a patient come in my office with no insurance I can say, ‘this is my rate, we’ll do the service for cash.’"

But not all orthopaedist surgeons are interested in joining the plan, says SimpleCare’s co-founder David McDonald, DO. "Their fears are that they will attract patients who do not pay," he says. "If they would realize that a majority of their work is in the outpatient arena and that many patients are willing to pay at the time of service, they would probably unload the administrative burden on their office staff by incorporating SimpleCare into what they’re already doing."

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