In this week's Liberty Update we highlight the potentially catastrophic threat of H.R. 3, the healthcare…
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Notable Quote: WSJ on H.R. 3, Biden & Pelosi's Dangerous Healthcare Bill

In this week's Liberty Update we highlight the potentially catastrophic threat of H.R. 3, the healthcare and drug price control bill that Joe Biden and Nancy Pelosi are attempting to rush through Congress.  The Wall Street Journal helpfully offers further insight this morning on how H.R. 3 would threaten lifesaving U.S. pharmaceutical innovation and leadership, including on things like the Covid vaccines:

Companies that refuse the government’s price must pay a 95% excise tax on all revenue they generate from that drug in the U.S.  They’d also have to offer the government price to private insurers.  There’s no “negotiation” when a gun is pointed at your head.  A new study in the Journal of the American Medical Association estimates that drug spending in the U.S. would…[more]

September 23, 2021 • 10:23 AM

Liberty Update

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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. 

Quiz Question   
What is the single deadliest disease epidemic to the U.S. population in history?
More Questions
Notable Quote   
 
"According to the left-of-center Tax Policy Center, Biden's tax plan will raise taxes on 75% of middle-class families next year and 95% of families over the long term. Biden's policies are already slowing the economy. In August, the U.S. added just 235,000 jobs, a far cry from estimates that 720,000 jobs would be created. The economy has over 600,000 fewer jobs than the Biden administration boasted…[more]
 
 
—Grover Norquist, President of Americans for Tax Reform
— Grover Norquist, President of Americans for Tax Reform
 
Liberty Poll   

Pres. Biden is seeking IRS authority to monitor every American financial transaction exceeding $600. Is there any legitimate government reason you can think of for such micro-monitoring of individual financial transactions?