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Surgeon Cuts Out Third-Party Payers

Greg Freeman for HealthLeaders Media, August 5, 2011
Consider the downsides

The largest demographic of Petersen’s patients are early retirees in their 50s who are too young for Medicare and young adults in their 20s who are uninsured, either because their jobs don’t provide insurance or they can’t afford or don’t qualify for coverage.

But if this strategy works so well, why don’t all physicians employ it? Petersen says there are some good reasons. First, insurance practice does not mix well with cash practice, which means that going only halfway isn’t really feasible, he says. The physician has to commit to completely converting to cash only, which can be a big change for most practices. When you try to mix the two, the insurance part of the practice takes too much of the staff’s time and they end up resenting those patients, Petersen says.

“Another reason that many doctors won’t go to cash only is that they think the liability is higher because the patient may not have the money to pay if their treatment becomes more complicated than you expected,” he says. “If you don’t do what is needed because they can’t pay, then you didn’t deliver the standard of care and you’re going to be sued.”

That fear is overblown, Petersen says. In an emergency, the patient would be hospitalized and the care would be covered; the patient can then be referred to other providers for treatment that will be covered by Medicare or Medicaid.

Petersen notes that the demographics of your practice also are important when considering this strategy. If your patients are mostly employed full time and have plenty of insurance coverage, they may not be attracted to a cash-only practice. That would mean either switching the focus of your practice or risking the loss of much of your patient base, he says.

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1 comments on "Surgeon Cuts Out Third-Party Payers"


nursecathy (8/11/2011 at 8:06 PM)
How refreshing to read about this surgeon who has dumped health insurance companies. The sooner we can rid ourselves of them all, the better off we will be as a nation. Now, how about everyone in this country having a tax-free health savings account? Each person would be responsible for how he spends his own money, so would handle it with thrift.