A Portland, Maine family doctor is the poster child for private practitioners who are turning their backs on the insurers altogether.
In April, Dr. Michael Ciampi stopped accepting all forms of insurance, including Medicare and Medicaid, and started charging for his services a la carte.
“We’re asking people to pay at the time of service just like you would pay at your garage or your lawyer or your plumber,” Dr. Michael Ciampi told the Bangor Daily News’ Jackie Farwell. “Now, I work for patients. I don’t work for the government and I don’t work for insurance companies.”
Primary care doctors are among the lowest paid in the industry, and they’ve seen big cuts to their bottom line recently, as insurers cap physician fees in order to rein in health care costs. Once Obamacare goes into full effect in 2014, it’s predicted that insurance premiums will skyrocket, and all the extra paper work required will cost private practices like Ciampi’s more time, money and manpower.
A doctor’s income is what the office takes in payments minus expenses or overhead. Physician overhead cover many things but the most expensive cost is the staff necessary to handle insurance coverage. About 20 to 30 years ago this cost used to be around 15 to 30% of revenue. Now for many doctors this insurance overhead has grown to an outstanding 60% or more, with more staff being hired to handle the quickly enlarging piles of paperwork required by Obamacare.
To top it off, Medicare is beginning to cap payments while the overhead costs remain the same, or worsen. So doctors may stop insurance coverage from Medicare just because they’d see a huge drop in their annual income.
Since the switch, Ciampi says he has been able to slash his prices by half in some cases, just from his overhead savings alone. But he’s lost patients in droves, with several hundred of Ciampi’s 2,000 patients ditching him altogether.
Nashville, Tenn.-based Dr. Robert Tomsett had similar results after convering to a no-insurance model at his practice in 2011. Unfortuantely, his staff paid the price.
“We did have to let some of the existing staff go as our patient count has dropped since initiating our transition to self-pay,” Tomsett wrote. “This is typical from accounts by other providers around the country that have converted their practices, some as much as a 75% drop in patient count.”
Six weeks into his no-insurance model, Tomsett saw only 75 patients and managed to break even.
“I am able to spend more time with each patient than any other time in my career,” he wrote.
In a similar case in San Antonio, Texas, a pair of primary-care physicians made headlines when they stopped accepting third party insurance a year ago. They told MySanAntonio.com that they moved to a direct pay model because of the “expensive and bloated bureaucracy that drives financial reimbursements.”
A 2012 survey of more than 13,500 doctors from around the country found that 26% have already cut services for Medicaid patients due to costs, and within the next two years more than 50% plan to cut some patient access to their services. About 7% plan to switch to cash-only practices, like Ciampi’s, or “concierge practices” in which patients pay doctors an annual retainer.
What happens if more doctors follow Ciampi’s lead and take matters into their own hands?
You’ve got a couple of options –– take your business elsewhere or pay the piper. Some insurers will offer partial reimbursements to out-of-network physisicans, but the onus will be on you to deal with the papework involved.