The Magazine

Cash for Doctors

And other ways to escape the diktats of Obamacare.

May 24, 2010, Vol. 15, No. 34 • By TONY MECIA
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On a wall inside Dr. Brian Forrest’s medical office in a suburb of Raleigh, North Carolina, is something you won’t find in most doctors’ offices, a price list:

Office visit  $49

Wrist splint $41

Pap-smear  $51.

Those are the prices patients pay for the services, and they pay on the spot. Forrest doesn’t take insurance. If he did, the prices would be far higher and not nearly as transparent. He says listing prices up front is about trying to do business in a straightforward way, “like a Jiffy Lube.”

Forrest’s practice, Access Healthcare, was born out of his frustration with the bureaucratic system run by major health care providers and insurance companies. His epiphany came about 10 years ago, as he was completing his family medicine residency at Wake Forest University. “I was basically being told I needed to see 30 patients a day every day, and that’s what we had to do,” he recalls, speaking with a soft drawl. He didn’t care for that pace, preferring to spend 45 minutes to an hour with each patient.

At one job interview, he was told he would be required to sign a contract saying he’d see a patient every seven minutes or have his pay cut. Most new physicians sign those contracts. Forrest, 38, wouldn’t. “I’ll borrow a term from McCain: I’m ‘mavericky,’ ” he says. “I like to fix things that are broken.”

He spent some time researching alternative business models and found inspiration in People magazine, of all places, which profiled a Vermont doctor who carried a stopwatch, charged patients $2 a minute, and didn’t take insurance.

Forrest decided to take a similar approach—minus the stopwatch. Clients pay him cash when they’re seen, known in the industry as “fee-for-service.” He sees a maximum of 16 patients a day and leaves the office at 5 p.m. Because he doesn’t have to file insurance forms, he only needs a single office assistant, and the low overhead allows him to charge less than other doctors. Occasionally, his charges wind up being less than just the co-pays for Medicare or private insurance. 

He’s negotiated deals with a lab company to reduce his patients’ costs for tests. The lab loves being paid on the spot for services rendered and allows Forrest to charge his patients $30, for example, for a prostate-cancer screening test that the company bills to an insurer at $184. “For specialists, cash in the hand is better than a bigger amount charged to insurance,” he says. He’s found other doctors happy to join in, such as a cardiologist who’s willing to give discounts of 80 to 90 percent to his patients if he’s paid cash up front. 

“The discovery I made was that by getting rid of administrative, bureaucratic hassles, I was able to do very well financially and at the same time have high patient satisfaction and good quality of care,” he says. Even more surprising, most of his patients are not wealthy. Half have no insurance, and another 15 percent are on Medicare. His patients include homeless people who have no other access to care and wealthy people who like the idea of spending more time with their doctor. 

Practices like Forrest’s aren’t a panacea to the nation’s health care problems, and they can’t succeed everywhere. But he says his experience offers an important lesson: “There are a ton of different ways out there that address the problem and give you better quality at lower costs.” 

The Democrats’ new command-and-control health care law is sweeping. For most Americans, there will be no escaping its effects: on premiums, taxes, access to doctors, and insurance coverage. But at the margins, some doctors and health care companies will find ways to operate successfully outside the system, offering patients more control over their health care and often at lower costs than in the government/private insurance oligopoly. 

For all the elaborate theory behind the new law’s 2,400-page effort to “bend the cost curve,” it’s the smaller companies that are already bending it. Some, like Forrest’s office, are aggressively cutting costs—as any small business tries to do. Others have experimented with membership structures where patients pay a little more for extra care. And traveling abroad for surgery is expected to be a growth industry as frustration mounts with high U.S. costs and longer wait times.

“You will see a flowing toward boutique medicine, where physicians who want to practice without the encumbrances of dealing with mind-numbing rules and regulations will set up their own practices,” says Robert Moffit, director of the Heritage Foundation’s Center for Health Policy Studies.

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