After struggling with the high cost of dealing with health insurance companies and ending up $25,000 in debt, Dr. Mary Kelly Sutton is counting on a return to an older model of the doctor-patient relationship to get her Keene medical practice back on its feet.

Sutton has been operating a primary care practice in Keene for five years and has been practicing in the Monadnock Region for 14 years. As of October 10, she discontinued billing all third-party payers, including health insurance companies, Medicare and Medicaid. Instead, she encourages her patients to pay at the time of service. Because she is eliminating the high administrative costs of billing and dealing with third-party payers, she is able to charge much lower prices – often half or even a third of previous charges.

HIGH ADMINISTRATIVE COSTS

Sutton is joining a growing number of physicians in New England and nationwide who feel that insurance companies have too much control over how they treat their patients. Palmer Jones, executive vice president of the New Hampshire Medical Society, estimates about a dozen doctors in the State have chosen to eliminate third-party billing.

"It's a growing sentiment on the part of many physicians," he says, "due to the overwhelming paperwork requirements for Medicare and health plans. Physicians feel they have to hire three people to do the paperwork for one doctor."

"Third-party billing has become very complicated and time-consuming for doctors and other billers," says Sutton. "I can't keep up with the overhead and I lost three medical billers in a seven-month period."

She explains that, in order to bill third-party providers, physicians must document patient visits extensively.

"Every event that occurs in a doctor's office or hospital has a procedure code," she says, "as well as every diagnosis. I was finding I was spending two minutes with a patient and five minutes on documentation. Medicine was becoming secondary. I didn't study medicine to become an insurance expert."

In addition, the regulations for each insurance company are different, she says, and doctor's offices must deal with many different companies. She estimates her office was billing more than 30.

If the documentation isn't filled out exactly right, insurance companies may withhold payment to the doctor. "Then you have to write a letter requesting payment and jump through more hoops," she says.

AMOUNT OF REIMBURSEMENT

The amount that doctors are reimbursed is also a sore point, says Dr. Vern Cherewatenko, a physician in the State of Washington who founded SimpleCare, a national program in which health care providers agree to give the lowest price for medical services in return for patients paying in full at the time of the visit.

"Two thirds of the money that patients spend never gets to health care," says Cherewatenko. "It goes to administrative costs, broker costs and insurance company profit. Health care is not expensive; insurance premiums are expensive."

Sutton joined SimpleCare in 2000. The program now has 12,000 patient members and 1,000 provider members in 48 states. The SimpleCare Web site lists two other practices in New Hampshire as members – The Doctor's Office in Manchester and Northwood Primary Care in Northwood. In addition, Sutton says Path Lab of Bedford, Goffstown and Manchester, offers 50 percent off lab tests for SimpleCare members.

"It is a concept," Sutton says, "that allows providers and patients to work together on reasonable and humane principles."

Dr. Gretchen Silverman of The Doctor's Office says that insurance reimbursements didn't cover the amount of time she spent with patients. She decided, about seven years ago, to participate in SimpleCare and to bill only Medicare and one insurance company.

"I like to spend a lot of time with my patients," she says. "but the reimbursements were horrible. Whenever you see a doctor, most of the bill is overhead. The more paperwork, the more employees doctors need to hire. When I spend plenty of time with my patients, I don't have to worry about what I haven't done that I should have."

CONTROL OVER DOCTOR-PATIENT RELATIONSHIP

Sutton's motivations for eliminating third-party billing and participating in SimpleCare go beyond money concerns.

"The most important reason for eliminating third-party billing," she says, "is to restore the doctor-patient relationship. Under managed care, doctors and patients don't come together out of human freedom. It's an arranged marriage. The decision of which doctor to go to is governed too much by economic terms."

Silverman says that insurance companies have too much control over what treatment patients get, when they get it and who provides it.

"Lots of people are like lemmings with HMOs (health maintenance organizations)," she says. "If they won't pay, they don't do it. And physicians also allow themselves to be controlled by them.

"I've spent hours fighting even to get lab tests," she says. "It takes a long time to get special services because only certain places are approved to provide them. It's not 'time is of the essence,' it's 'who do we have an arrangement with?'. They (HMOs) keep patients away from doctors longer. Making money is their main concern. The more physicians they can control who won't give consultations, who don't use expensive and more effective medications, the bigger their profit. Medical decisions are being based on where they can get the best deal."

Silverman says this, along with the cost of malpractice insurance, is one of the top issues of concern to physicians.

"We've already lost some of our most experienced doctors because they refuse to bow and kowtow to this kind of control," she says.

"The power of the insurance companies has gotten out of hand," agrees Cherewatenko. "As soon as a doctor signs a contract, the insurance company becomes the puppeteer. Doctors become limited in the choices of what they can do, what medications they can prescribe, what referrals they can make. We just need insurance companies to get back into the insurance business and not in patient care."

Doctors also become subject to the so-called "noose law," says Silverman. "Part of the contract with an HMO is that doctors will lose their contract if they say anything derogatory about the HMO, even in private and in the context of questioning by the patient."

SERVING THE UNINSURED

Sutton says that eliminating third-party billing also will allow her to better serve those who cannot afford health insurance.

"Part of my initial motivation was concern for the uninsured," she says. "The charging system is very unfair. Those who can least afford it pay the most."

She explains that insurance companies "never pay the full price" a doctor charges, that the prices are always "whittled down." Because uninsured individuals don't have the bargaining power that insurance companies have, they pay the full price.

Sutton believes her lower prices will allow more patients to be able to use her services while assuring her fair compensation.

SIMPLECARE

It is such sentiments that influenced Cherewatenko and his colleague, David MacDonald, to form SimpleCare in 1998. At the time, Cherewatenko had filed for bankruptcy; he had been losing money on patients who were insured. He was not alone, at least in the State of Washington. A survey sponsored by the Washington State Medical Education and Research Foundation in 2000 found that physician practices of most sizes and in most places across the state reported an average net loss, after physician compensation, of $95,000.

"While premiums for commercial health insurance are climbing, payment to those who provide the actual service continues to fall," the report said.

Cherewatenko encourages patients to combine SimpleCare and its fee-for-service concept with a high deductible/major catastrophic health insurance policy. This type of policy, which usually costs 20-40 percent less than a low-deductible policy, will cover the big stuff – medical services needed if a catastrophic illness or accident occurs. For the small stuff, patients pay cash. Over all, he says, patients will pay less and have more control over their health care, and doctors will be reimbursed fairly.

Cherewatenko likens it to the way people buy car insurance. "We buy the gas and pay for the oil changes and tune-ups and the occasional new tire," he says. "The insurance company pays if we slam into a wall."

Patients can join SimpleCare for $20 a year for individuals and $35 for families; health care providers pay $50. Patients agree to pay at the time of their visits and providers agree to provide the lowest possible rates.

SimpleCare also makes allowances for people who cannot afford to pay cash or even the annual $20 fee. It has initiated a program called Cares for America in which physicians can decide how many patients who can't pay they will take each month. The patients can then work off the charges at any office that participates in SimpleCare.

Sutton supports this concept. "It's a little like things used to be," she says, "when people gave what they could rather than having a system interposed on them. It's a wonderful value to have people do what they can for the good that they get."

In addition to eliminating billing, Sutton has made some other changes in her practice. She has reduced the office space significantly, reduced her staff to only three part-time persons, and offers walk-in hours rather than appointments for most services; appointments can still be made if needed. Although she says it's too early to see the full impact of the changes on her practice, she has lost some patients but has gained others. The greatest impact, she says, on been on her state of mind.

"I feel released," she says. "I don't feel the financial pressure that kept me push- push-pushing to pull more people in the door. One afternoon, I actually took a nap."

Contacts:
Dr. Mary Kelley Sutton, Keene, 358-9985
Dr. Vern Cherewatenko, SimpleCare, Renton, Washington, (425) 255-4166
www.simplecare.com

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