:: Will You Be Ready for Retail Medicine? ::

Consider the current scenario in healthcare. Employers are frustrated with seemingly out of control costs. Providers are irritated with having to "treat" the patient's coverage rather than their problems. In addition, providers are expected to be experts in a multitude of third party plans. Patients are confused because they don't understand their own coverage and the financial constraints placed upon the providers. To make things worse, patients often take out their confusion on the provider's staff. Finally, even third party payers are exasperated as they are expected to control costs and quality from a distance.

Third party payers unwittingly intervened in the hallowed doctor/ patient relationship when they expanded coverage from major medical and hospitalization to basic office visits (in their defense, they responded to market pressures). Needless to say, this "third party wedge" has strained the doctor/ patient relationship and created a scenario fraught with problems. The payer is not present when services are delivered. The payer can delay payment and question what occurred during the visit. The consumer feels little or no responsibility for payment.

But there is change in the air. In recent years, employers began to shift more of the cost of health care on to their employees. Rarely does an employer pay 100% of the premium any more. The shifting of the cost burden typically has been in reduced coverage, fewer riders, single coverage only, (the employee has to pay the balance for family coverage), higher annual deductibles, higher co-insurance percentages, and higher office copays. Clearly, the patient is paying for more and more of the office visits out of pocket. The trend towards "retail" medicine, cash at the time services are rendered, is evident.

A bigger push towards "retail" medicine could come from employers who will offer their employees the "old style" major medical and hospital insurance (catastrophic coverage) in conjunction with a medical savings account. Employees will have an account to cover all of their non-catastrophic medical expenses which will include office visits and office based procedures. The money not expended can be rolled over into the next year or invested in their retirement plan. Eventually, practices will be paid in cash by the patient at the time of service for the majority of their office based business. There will be less and less third party billing. Will you be ready for retail?

A lot of good may result from this trend towards "retail" medicine. In this scenario, the third party payer will be removed from the doctor/ patient relationship, at least in the office setting. What is covered or not will be inconsequential as the insurer won't be responsible. Physicians will be free to treat the patient instead of their insurance. Patients will be more compliant and proactive when they are using their money, (medical savings account) to pay for services. Practices can institute separate (somewhat lower) fee schedules for cash paying patients because there are no billing costs or insurance related (i.e. the hassle factor) costs. Receivables should drop considerably. (If you have a reduced fee schedule for these patients paying in cash, collect it that day. Don't end up sending them a bill!)

Conceivably, coding may not be an issue, but we recommend you continue to do so if only to track productivity. You won't have to link an approved diagnosis to the visit in order to get paid because there is no carrier looking over your shoulder. There will be no more confusion over deductibles, coinsurance or copays. You will not be restricted to a certain number of visits or by third party protocol. You won't need prior authorization. There won't be a preferred panel of providers limiting a patient's choice.

You should be prepared for the trend to cash payment. Patients could/should be more demanding if they are paying you directly. They will have options and may vote with their feet. Just as you won't be restricted by a prescribed network of providers, neither will they. The paying customer just might be less tolerant of inconvenient parking, poor telephone systems, lengthy appointment lead times, excessive waiting times, unfriendly staff, and a feeling they are not valued customers. Despite some minor operational adjustments you may have to make, all things considered, the trend towards retail medicine should be a boon to both physicians and their patients.