Talty takes direct payment from her patients, then turns those who have insurance over to an independent biller who processes their claims and has the insurance company send reimbursements to the policy-holders.
“I just got tired of running to the mailbox every day, wondering if I was going to be able to run my business,” Talty said in explaining why she decided to stop dealing directly with insurance companies.
“We have no rights anymore,” she said of doctors and their relationship with insurance companies. “We can’t practice medicine. They have us by the tail.”
You go to a store where there are no marked prices on the merchandise. You get what you want, or maybe just what you need. You agree to pay an amount that remains unknown. A month or two later, you get the bill. Crazy as it may seem, that is essentially the payment structure for much of the U.S. health care system.
But not at Express Family Care, a Roanoke County physician’s office that opened last month. The practice, run by three independent physicians, is posting the prices of a visit for its cash-paying patients to see, right there in the waiting room before they are treated.
The goal is to provide transparency in a world of high — and some would say hidden — costs, said Dr. David Alligood, one of three physicians at the practice.
“There is an opacity to the price structure in modern medicine, and it’s difficult to get a straight answer,” said Alligood, who began seeing patients at the Bonsack office in late December along with Dr. Scott Crosby and Dr. Scott Hayes.
“It’s difficult and frustrating for the patients when there are different price structures.”
Direct payment systems like the one at Express Family Care are unusual for Southwest Virginia and across the state, several health care experts said in recent interviews.
If this was a fast food restaurant, the prices would be for small, medium and large.
A simple doctor’s visit costs $109, as patients can see from a price list as soon as they walk into Express Family Care at the Kroger Square shopping center off U.S. 460 near the Roanoke-Bedford county line.
An intermediate visit, which might include X-rays or lab work, is $149. And a complex visit, described as involving minor surgery such as stitches or splinting, costs $199.
The prices are for patients who pay on the spot by cash, check or credit card; those covered by private insurance or Medicare are usually billed in the traditional manner.
Although it’s rare for doctors to post their prices, the ones who do are allowing health care consumers to make more informed decisions, according to the executive director of Virginia Health Information, a nonprofit organization.
“We believe this is a very good step toward providing consumers what they need to know,” Michael Lundberg said.
But the benefits of such transparency fall mostly to cash-paying patients. And many people in Virginia are covered by insurance plans, either public or private, with a myriad of different co-payments, deductibles, co-insurance and other variables that make it hard to arrive at a universal, one-size-fits-all price.
“What someone charges is really irrelevant to what gets reimbursed by many of the insurance plans,” said Jay Andrews, vice president of financial policy for the Virginia Hospital & Heathcare Association.
Setting a price and making it public is perhaps best suited for retail clinics and urgent care centers, which are the most likely to treat cash-paying patients for relatively simple illnesses or injuries. Doctors Express, an urgent care center in Roanoke, has the same three basic prices as Express Family Care posted in its lobby.
Hospitals, surgery centers and other providers that handle more complicated cases would be hard-pressed to say in advance what the cost will be, Andrews said.
“You don’t know whether you will be in for two days, three days or four days,” he said. “So it’s really very difficult to say: ‘This is what it’s going to cost.’ ”
Managing care costs
A list of prices in the lobby is not the only thing unusual about Express Family Care, as the name indicates. While it’s modeled after urgent care centers that have been popping up in the Roanoke Valley in recent years, the practice will also offer primary care on a continuing basis.
Alligood, Crosby and Hayes have a combined 45 years of experience in emergency room care, and all three are board-certified in family medicine.
Their hope is to offer primary care to repeat patients while maintaining enough flexibility to take the unexpected walk-ins that are the staple of urgent care: cuts that need stitching, broken bones, bad colds and the like.
Both types of patients, the doctors say, appreciate the opportunity to settle up financially the day they are treated.
“Most people want to be responsible and they want to pay their bill, but they want to know how much it will be,” Crosby said.
In some cases, insured people with high-deductible plans may find it simpler and less expensive to forego their insurance plans and just pay cash at Express Family Care.
At a time when more employers are raising deductibles and increasing the out-of-pocket costs for policy-holders, the three doctors may be on to something with their business plan, said Len Nichols, a professor of health policy at George Mason University, where he is also director of the Center for Health Policy Research and Ethics.
“This type of thing might grow,” Nichols said, adding that many of the lower-cost plans available through the Affordable Care Act’s online marketplaces have fairly high deductibles.
Because the practice opened Dec. 30, it’s too soon to say how many patients will be insured and how many will pay in cash.
But with the proper mix of patients covered by Medicare or private insurance, “this IS certainly a viable business model,” Nichols wrote in an email.
Taking more cash-paying patients also bypasses the bureaucratic maze that both doctors and patients enter as soon as a claim is submitted to an insurance company for processing.
“It’s a big game that goes on out there,” Crosby said of the process.
Another Roanoke-area physician, Dr. Janine Talty, has found a way to distance herself from the insurance filing process while also posting her prices in a way that is similar to Express Family Care.
Talty takes direct payment from her patients, then turns those who have insurance over to an independent biller who processes their claims and has the insurance company send reimbursements to the policy-holders.
“I just got tired of running to the mailbox every day, wondering if I was going to be able to run my business,” Talty said in explaining why she decided to stop dealing directly with insurance companies.
The uncertainly about what kind of care will be covered, and to what degree, is even greater for Talty, who takes difficult cases such as patients with Lyme disease.
“We have no rights anymore,” she said of doctors and their relationship with insurance companies. “We can’t practice medicine. They have us by the tail.”
Cutting price mystery
In a health care system where an aspirin given to a hospital patient can cost $18, and where sky-high medical bills are the most common reason for personal bankruptcy, the pricing of treatment has long been a mystery.
“We have this complicated way of doing all of this that does not lend itself to looking under the hood and really understanding how it all works,” said Alwyn Cassil, a principal with Policy Translation, a health policy consulting firm.
With rates negotiated between health care providers and insurance companies, and with Medicare payments based on a complicated coding system, much of the price-setting goes on out of public view.
“Part of the reason the secrecy is there, you keep people in the dark until five weeks later,” Alligood said. “They get their bill and they’re kind of defenseless. What can they say?”
Yet there’s a growing movement toward transparency, Cassil said.
In part, it comes from more small and independent practices posting their prices. And part of it comes from the government. Last year, for the first time, the U.S. Centers for Medicare and Medicaid released a massive list of prices charged for certain procedures by hospitals across the country.
The data showed wide variations in prices for the same procedure. For example, the national average for a joint replacement ranged from about $5,300 at an Oklahoma hospital to $233,000 at one in California.
There were also wide price discrepancies at hospitals in the same region, including Carilion Roanoke Memorial Hospital and LewisGale Medical Center in Salem.
When it comes to their urgent and primary care practices, Carilion Clinic and LewisGale Regional Health System do not post or publish prices, officials with the two systems said.
But there are set prices available to self-paying patients upon request. Details on how those prices break down were not available by press time.
Andrews, of the Virginia Hospital & Healthcare Association, praised physician offices like Express Family Care for posting their prices — while cautioning that it could have unintended consequences beyond the small practice scene.
If prices were listed for all procedures, he said, “it’s going to scare people off. … Joe Public doesn’t completely understand that the charges are really irrelevant. It’s more of what your insurance will cover.
“We don’t want to see people walking away from surgery they desperately need,” he said.
While it’s true that many patients never pay the listed price for their treatment, Cassil cautioned against taking too much comfort with the bill going to a third-party payer, whether it’s the government or the private insurance sector.
“It perpetuates the myth that someone else’s money is paying for this,” she said. “But it’s really our money. Because at the end of the day, we’re all paying those premiums.
