I knew my latest BusinessWeek.com column about Elizabeth Vaughan, the North Carolina physician who opted out of the whole insurance routine, represented some kind of emerging trend. I just didn’t realize how immediately emerging…till a physician friend referred me to a magazine put out by the American Academy of Family Physicians, "Family Practice Management". The February issue devotes four articles to profiling family practice docs who are targeting cash-only patients and moving away from the hassle (and lower fees) of insurance and HMO networks.
What intrigued me even more than the four profiles was a commentary by the magazine’s editor, Robert Edsall, in which he raises the question: "…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?"
I think I can answer his question with some confidence. The insurers would fight the move tooth-and-nail because they would see it for what it is: an attempt by doctors to go around the insurers to market directly to patients. As I point out in my BusinessWeek article, insurers are acting as marketers for physicians. In return for bringing business to the doctors, the insurers pay doctors at wholesale, and re-sell their services at retail (via their insurance premiums). Business-wise doctors recognize that they can do much better financially if they can attract patients whom the physicians can charge retail rates.
Employers would welcome the trend. Employers hate paying all or part of health insurance premiums, and for good reason: it’s a huge, and fast-rising, expense, and their competitors in China, India, Germany, and England aren’t saddled with this expense; the government pays, or else patients pay. Here is a comment from a speech by the CEO of Wal-Mart Stores Inc. to the National Governors Association a few days ago: "The soaring cost of health care in American cannot be sustained over the long term by any business that offers health benefits to its employees."
I suspect the government would back the insurance companies, since the government hates change. Moreover, the insurance companies are big givers to senators, representatives, and the President.
It’s all part of a power struggle. For the past half century, the insurers have been winning the battle, hands down. But there’s nothing that says physicians can’t fight back, and win. After all, isn’t it the opportunity for such cat-and-dog fights that makes America great?
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