January 24 2011
by John Backus

What’s your Rx for Health Care?

While we watch legislators attempt to repeal health care reform, I though it was about time I express my personal frustrations with the system, make some suggestions, and start a productive discussion about big opportunities for entrepreneurs.

On Tuesday January 25, 2011 President Obama will give his State of the Union address and will no doubt tout his health care law passed last year. Wisconsin Republic Paul Ryan will give the official Republican party response, while Minnessotta Representative Michele Bachmann will give the Tea Party response. We can guess that the responses will focus on a variation of “repeal and replace.”

I have a more simple idea.

When my in-box is inundated with insurance EOBs (Explanation of Benefits) detailing the price the doctor charged, the price the insurance company is willing to pay, how much I have to pay, why certain charges were denied- and how to appeal those denials and how all of this relates to my individual deductible, my family deductible, my out of pocket maximum, and on and on ……I just go crazy!

Did you know that 40% of the cost for a primary care doctor to see you or treat you goes to cover the bureaucracy of the insurance company? It is estimated that each doctor has to hire 1.6 additional full-time equivalents in their office – nurses, accountants, receptionists JUST to satisfy the demands of the insurance companies. This is just plain stupid.

Why have the charade of the doctor charging $200 for an office visit, the insurance company having pre-agreed to a “negotiated rate” of $100, and then have the doctor net $60 after paying $40 to have staff in his office process all of the insurance paperwork? There must be a better way. And there is.

Let’s start with cash pricing.

Make every doctor, every pharmacy, every hospital post cash prices online and in their facility – for every procedure.

And when I pay with cash, charge me $60 – since there is no insurance overhead. Don’t even think about trying to charge me $200!

Sure, insurance companies will cry foul because they are large purchasers of health care services for their members. Many of the biggest insurers have negotiated most favored nation pricing with all of the doctors and hospitals in their network. Let those stand – vs other insurance plans. But let cash prices fall outside of any “Most Favored Nation” language. Why? Because it is cheaper to deliver medical care to patients directly than it is through insurance companies.

Who would care about this?

Everyone. Everyone who has a cash deductible to meet each year for health care. Everyone who has a fixed co-pay or a 30% +/- co-pay for every visit. Everyone who buys prescription drugs. Everyone who has a Healthcare Spending Account. Or a Flexible Spending Account. Or a High Deductible Health Plan. Or is under insured. Or is uninsured. Everyone should care about this.

That’s why we began to invest in consumer-directed health care two years ago. This time, its personal.

Qliance charges $60 a month for unlimited access to and care by any of their doctors. HealthWarehouse sells 1000 prescription drugs for less than the price of your average co-pay. Truveris audits those awful Explanations of Benefits (today just for prescription drugs) and catches about a 5% overcharge rate with each bill.
Making consumers informed buyers is a smart thing to do. It sure would be nice to know the price of something before you buy it.

What’s your take on the system and how else would you fix it?

Post your best ideas below!


January 24 2011
by Barry Browne, MD

Although this pains me greatly, I agree with you wholeheartedly. Let’s dispense with games, price services fairly, and get on with things. The layers of regulations and obstacles which must be overcome do nothing but add costs to a system which otherwise works very well.

January 25 2011
by John Backus

Thanks Barry. High honor from a Doctor!! ;-)

February 7 2011
by cairocam

Evidence that many doctors and hospitals to refuse these patients because the government does not pay enough to cover even the costs of health care. So, without new funding, this proposal is simply a way for a smooth changeover costs for the suppliers …

excessive sweating

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