Cash based healthcare service is a rapidly growing trend that you can see in a variety of settings, such as micro practices and concierge medicine. The driving force is the shift we’re seeing in the healthcare delivery model, where all stakeholders are being negatively affected by the current status quo.
Doctors and Patients alike believe the current bureaucratic insurance system is too costly, inefficient and is impinging upon traditional liberties. As the cost of insurance has risen dramatically, the value has actually diminished. Patients are waiting longer to schedule appointments, longer in the waiting room, and most importantly receiving watered down health services by paraprofessionals as opposed to physicians.
On the physician side, it is extremely complex to operate a private healthcare business with all of the compliance, rules, regulations, process and forms in order to see a patient, and HOPE you get paid in 45 to 60 days.
Enter “CASH ONLY.”
This solution makes a lot of sense from a value proposition. This is not to say that people should not insure for catastrophic illnesses or accidents such as cancer or car accidents, however, everyday healthcare maintenance fits well into the cash based model.
The benefits to the practitioner is that they will be treating patients who truly value their health and a doctors expertise, while reducing cost and administrative burden of working through the insurance based system. The model has shifted to a consumerism based model – the more you pay, the more you expect. This is not necessarily the case with healthcare delivery today. The downside to this approach for physicians would be limiting their market share because it will only appeal to a certain sector of the market place, much like higher end goods or services.
In the right geography, cash-only practices could be an effective business model, but site selection and targeted demographics are key. This must be researched to understand where the people are spending their money, what do they value, and what do they expect. A professional or a busy mom does not have the time to sit in a waiting room for an extra hour because their doctor is running behind schedule. What it says from a service perspective is that you are not a priority, which is something that the private market and a cash based business would correct immediately.