First-Party Payers: Should You Cut Out the Middle Plan?


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How much of the world can you set right simply by asking your patients to pay for their care?

Fam Pract Manag. 2006 Feb;13(2):14.

As the multi-article cover section in this issue suggests, you might be able to reduce your practice overhead, avoid managed care hassles, employ a much smaller staff, charge your patients less, avoid billing and claims submission entirely, improve collections, spend more time with patients, go home earlier and make more money than you do now simply by cutting your ties to health plans.

OK. Maybe that's the best-case scenario. But if you could accomplish even a good part of that, why wouldn't you? For many family physicians, the answer seems to be, “I can't imagine why not.” They're doing it now, or they're on the brink of opening their own so-called cash-only practices. Some, in markets with heavy managed care penetration, are wondering whether they could ever attract enough patients to make a decent practice, and others are wondering whether they would be simplifying their own lives at their patients' expense. While everyone considering going into cash-only practice will have to answer these questions for himself or herself, they do point to related questions with broad economic and ethical implications:

1. The economic question: What if everybody did it? Any market could presumably accommodate a few cash-only practices, but what would happen – and how would insurers, employers and the government respond – if a significant minority or even a majority of practices went cash only? Is that even possible?

2. The ethical question: What do you owe your patients? Should you feel guilty for making patients file their own claims? How about for demanding full payment at the time of service, or for making them pay out-of-network prices for your services? A separate but related issue is whether high-cost concierge care is ethically justifiable.

I expect to see more and more discussion of issues like these as more and more family physicians opt out of the maelstrom of health-plan-funded practice and into the calm of patient-pays practice. If you have views on any of these issues, I'd be interested in hearing them (send them to and in publishing selected comments in the Letters department of future issues.

Robert Edsall, Editor-in-Chief


Copyright © 2006 by the American Academy of Family Physicians.
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