Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00…
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This Week's "Your Turn" Radio Show Lineup

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”

Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT: Lance Izumi, J.D., Koret Senior Fellow and Senior Director of the Center for Education at the Pacific Research Institute: Education Update and Reforms;

4:30 CDT/5:30 pm EDT: Alex Pfeiffer, Young Apprentice Reporter at The Daily Caller: DNC's Leaked Emails;

5:00 CDT/6:00 pm EDT: Blake Barclay, Blogger, Political Correspondent, and High School Student: RNC 2016 as viewed by a member of the iGeneration; and

5:30 CDT/6:30 pm EDT: Open Mic

Listen live on the…[more]

July 25, 2016 • 03:49 pm

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Home The Issues Health Care Direct-Pay Medicine: A Free Market Approach to Healthcare Reform
Direct-Pay Medicine: A Free Market Approach to Healthcare Reform Print
By Ashton Ellis
Wednesday, February 01 2012
Blue says that a growing number of doctors are converting their practices to a new business model that cuts out the middle men, and enhances the doctor-patient relationship.

While ObamaCare creates armies of bureaucrats in the public and private sectors, a small but growing number of doctors and patients are using a simple solution to improve medical treatment while cutting out middle men. 

When it was signed into law in 2010, the Patient Protection and Affordable Care Act (ObamaCare) was estimated by Newt Gingrich’s Center for Health Transformation to create at least 159 new federal agencies.  An analysis by the non-partisan Congressional Research Service was even more frightening.  Due to its sweeping lack of specificity, CRS said that a careful review of the law’s nearly 2,000 pages made it “impossible” to speculate on the number of new bureaucracies. 

Unlike CRS, the Internal Revenue Service had no problem calculating how many new employees it would need to enforce ObamaCare’s 40 changes to the federal tax code.  In its 2012 budget proposal, the IRS requested an additional $359 million to fund 1,054 new hires this year alone. 

Left unsaid by cheerleaders of government’s takeover of the healthcare industry is the cost of compliance pushed onto doctors.  It’s no wonder that one of the few growth areas for jobs in today’s recessionary economy is medical coding; that is, people charged with interpreting the blizzard of regulations hitting doctor’s offices and insurance companies.  Thanks to more government intrusion, coping with rationed care is becoming a lucrative career path. 

Not for doctors, of course.  Faced with a barrage of rules and financial incentives to treat patients as products rather than people, many doctors are turning to government-backed loans to keep their doors open.  According to the Small Business Administration, SBA increased its loans to doctors in private practice from less than $60 million to $675 million between 2000 and 2011.  Tom Blue, Executive Director of the American Academy of Private Physicians, says that doctors are seeing revenue drop precipitously as the costs of regulations, drugs and medical liability skyrocket, while reimbursements from public and private insurance providers plunge. 

In response, Blue says that a growing number of doctors are converting their practices to a new business model that cuts out the middle men, and enhances the doctor-patient relationship. 

Direct-pay medical contracts require a one-time annual fee that buys 24/7 access to a primary care physician, same day appointments and a doctor-patient relationship reminiscent of an era before third party insurers and government subsidies. 

Some direct-pay practitioners prefer the term "concierge medicine" because it reflects the heightened level of personal service available to patients.  Many require or strongly urge patients to carry secondary coverage for catastrophic illnesses. 

The benefits of direct-pay contracts cut both ways. 

Patients experience the positive effects immediately.  Not only are waiting times and payment conflicts eliminated, so too is the widget factory mentality characteristic of so many doctor’s visits.  Under a third-party payment system a doctor’s compensation is tied to the volume of patients he sees per day.  Thus, an average primary physician carries a patient load numbering thousands in order to make enough money to stay in business. 

Under a direct-pay model, however, the doctor knows that if he’s seeing a patient he’s already been compensated.  Because of cost certainty, most direct-pay doctors service a patient load in the low hundreds.  Moreover, the collected fees remove the costliest non-medical entity from his practice – the compliance officer.  Doctors are therefore free to spend much more time treating individual patients with substantially less overhead.  

The fee schedule per patient for most direct-pay doctors ranges from about $1,000 to $3,000 a year for primary and preventive care such as physicals, blood tests and EKGs. 

Criticisms of direct pay medical contracts boil down to one complaint: those who can’t afford the service are left to the mercy of the third-party system.  In a word, yes.  But the practice of direct pay medicine offers some interesting responses. 

First, complaining about being trapped in the current system shows there is a need for reform that opens up the healthcare industry to a lower-cost, transparent pricing system.  Second, many direct-pay doctors admit a certain percentage of “scholarship” patients who can only afford a fraction of the annual fee, using the profits from full-pays to subsidize the others.  For scholarship patients, direct-pay is a godsend.  

Defenders of healthcare’s middle men are fighting back.  Academics and government officials fret over whether there will be enough doctors serving the poor and middle-class.  Advocates of socialized medicine resent the ability of some to opt-out of one-size-fits-all healthcare.  What they really fear is the rise of an entrepreneurial generation of doctors who make a living and serve others free from bureaucratic fiat. 

Question of the Week   
In which one of the following years was Secret Service protection afforded to major candidates for President and Vice President of the United States?
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Quote of the Day   
 
Philadelphia -- Could the presidential election be decided by two competing 'October Surprises' based on leaked information?One from WikiLeaks could involve the deleted e-mails from Hillary Clinton's private server and could be related to the FBI's ongoing investigation of the Clinton Foundation. Another could involve the leaking of confidential tax-return information regarding Donald Trump, who has…[more]
 
 
—John Fund, National Review OnLine National-Affairs Correspondent
— John Fund, National Review OnLine National-Affairs Correspondent
 
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Following the Republican National Convention, how do you now rate Donald Trump’s chances of winning the presidency?