Dr. James Eelkema, a Burnsville, MN family practice physician was fed up with the costly paperwork insurance companies required and the second guessing of his medical decisions by company bureaucrats. So when he learned that up to a third of his pay was to become contingent on “measures such as whether his patients got pap smears or whether he got them to stop smoking,” Dr. Eelkema decided enough was enough and converted to a cash-only practice.
Dr. Eelkema’s decision represents a growing trend of medicine returning to its fundamental role as a market-oriented, patient-driven profession. Cash-only practices have a number of advantages over traditional practices. First, they allow the doctor to save time and personnel on insurance paperwork and redirect resources to patient care, simultaneously passing savings on to the consumer. Second, they encourage a closer doctor-patient relationship, free of interference from third parties such as insurance companies or government programs. Most importantly, cash-only practices curtail expenditures by linking health care decisions and cost directly to consumers; after all, when the insurance company is paying for your checkup, who bothers to ask how much it costs?
The experience of Dr. Vern Cherewatenko demonstrates the merits of cash-only practices for physicians, patients, and the health care system at large:
Six years ago, Cherewatenko was drowning in paperwork and red ink, accepting more than 300 different insurance plans with 7,500 different medical codes. “We were losing $80,000 a month. We were inundated with paperwork. What we found is the more patients we saw, the more money we lost, and it was devastating,” he says. Unable to survive, Cherewatenko discovered what he says is a better way — a cash-only practice that’s grown into a national network of 1,600 doctors. “We have lowered our fees anywhere from 30 percent to 50 percent on some of our services which is incredible,” he says. ‘And it’s really charging less and making more.’
Cash-only doctors serve as an excellent counterpart to consumer-driven health care plans, which include high deductible health insurance plans and health savings accounts (HSAs). High deductible insurance plans offer lower premiums and supplement the cash-based market, ensuring consumers have coverage for catastrophic and unforeseen events. For all other medical costs, patients would pay out of pocket, using HSAs for predictable health expenses like checkups and lab tests. This system empowers the patient while enhancing affordability of care. Cash-only practices complement and enhance the beneficial aspects of this system by providing more consumer control of care and a better doctor-patient relationship, all at equal or less cost to the consumer.
So what’s keeping these practices from becoming more widespread? As usual, big government has its fingerprints all over the crime scene. Unfortunately, such ideas are discriminated against by the federal tax code in its virtually exclusive treatment of comprehensive, employer-provided health insurance. Every dollar paid directly to a doctor, without going through the bureaucratic apparatus of a third party payment system , must of necessity be an after tax dollar. The most effective, though limited, relief from this tax discrimination against direct payment is the health care savings account. But Congress caps the maximum contribution employees and employers can make to an HSA. Congressional policy, in other words, divorces the economic principles of supply and demand.
In reforming health care, lawmakers should create a level playing field for different types of care. This means that Congress should not be picking winners and losers, or favoring one type of health care delivery system over another. It means that cash-only practices and other consumer-driven options should not be on the receiving end of official discrimination in either law or regulation. Patients should make the choice of how they get care. As Heritage’s Ed Haislmaier writes, “[Maximizing value] can be achieved in health care only if the system is restructured to make the consumer the key decision maker. When individual consumers decide how the money is spent, either directly for medical care or indirectly through their health insurance choices, the incentives will be aligned throughout the system to generate better value—in other words, to produce more for less.”
Co-authored by Vivek Rajasekhar.
On November 9th, the U.S. Supreme Court will hear oral arguments challenging the constitutionality of juvenile life without parole (JLWOP) sentences. In preparation for oral arguments, JLWOP: Faces & Cases will be an on-going series on The Foundry that will tell real stories about juvenile offenders who are currently serving LWOP sentences.
Life without parole for the very worst juvenile offenders is reasonable, constitutional, and (appropriately) rare. In response to the Western world’s worst juvenile crime problem, U.S. legislators have enacted commonsense measures to protect their citizens and hold these dangerous criminals accountable. Forty-three states, the District of Columbia, and the federal government have set the maximum punishment for juvenile offenders at life without the possibility of parole. By the numbers, support for its use is overwhelming.
Nonetheless, its continued viability is at risk from misleading lobbying efforts in many states and court cases that seek to substitute international law for legislative judgments and constitutional text.
Emboldened by the Supreme Court’s Roper v. Simmons decision, which relied on the Eighth Amendment’s “cruel and unusual punishments” language to prohibit capital sentences for juveniles, anti-incarceration activists have set about extending the result of Roper to life without parole. If they succeed, an important tool of criminal punishment will be eliminated, and all criminal sentences could be subjected to second-guessing by judges, just as they are in capital punishment cases today.
The most visible aspects of this campaign are a number of self-published reports and “studies” featuring photographs of young children and litigation attacking the constitutionality of life without parole for juvenile offenders—including two cases that the U.S. Supreme Court has agreed to hear in its 2009 term.
To see the entire executive summary from Adult Time for Adult Crimes click here.