Why We Stopped Accepting Insurance

I wrote the essay below over two years ago, on the eve of our canceling our contracts with insurance companies and opting out of Medicare.  It explains our motivations for this “radical” move.  I think that it is appropriate that this is my first blog entry.

A few things have changed since I wrote this.  First, my father passed away about a year after I wrote it.  He was a great physician, in whose footsteps I am trying to follow.  Second, the repressive Medicare SGR formula alluded to in the essay was recently replaced with another bureaucratic scheme that hurts doctors and patients even more.  Third, we began a transition to the Direct Primary Care model of practice rather than a cash based fee for service model because the latter was not sustainable.


There are two main reasons we stopped accepting insurance.

The first is financial.  Our primary care practice is a small business.  If we cannot bring in enough revenue, we close.  At that point, we cannot take care of anyone.  For over 10 years, Medicare reimbursement has been essentially flat., and every year, they threaten to cut payments, not increase them.  All other insurance companies base their rates on these Medicare rates.  Over that same ten years, our expenses (payroll, health insurance, malpractice, heat, supplies, etc.) has gone up by at least 30-40 percent.  No business can survive in this model.

The second is ethical.  Part of the PP/ACA legislation establishes Accountable Care Organizations.  These a revival of the HMOs we all hated so much in the 80’s and 90’s, but worse.  In this model, a health care organization (usually a hospital and its employed physicians) is given a lump sum of money to take care of a set number of patients.  If the organization spends less than the government gives them, they make money.  If they spend more because the patients are sicker than expected, the hospital and the doctors have to write checks to the government for the balance.  Our margins are already so thin, doing this would break us.  The obvious ethical dilemma is that providers will be incentivized to not provide services for our oldest, sickest, and most vulnerable patients if they are to survive financially.

This stopped being a theoretical concern for me this week.  My father, Dr. Louis Ciampi, who has been my role model, is now retired, but still giving back to his community.  He is active in our church and volunteers at a soup kitchen every week.  He needed a heart valve replaced and a pacemaker.  He is recovering nicely at Maine Medical Center as we speak because of the great care he is getting from the dedicated doctors and nurses there.  I shudder to think how this would have gone if Obamacare had already been fully implemented.  The hospital administrators, who are usually paid several times more than the doctors are, may have had to weigh whether or not it was cost effective for them to allow the surgery, or they would have had to seek guidance from a panel of unelected bureaucrats in Washington about how much my father’s life is worth, and if the costs are justified.  I cannot morally cooperate with such a system, so I opted out of it.

I followed the lead of other physicians who are hopefully starting a trend.  By opting out of the system of government and private insurance, who want total control of the doctor/patient relationship, I work solely and directly for my patients.  This is what was done from the time of Hippocrates, up until the mid 20th century, when private insurance companies and government programs began to take over.  Instead of playing a shell game with the insurance companies about payments, I post my prices online and in the office.  We have prices lower than we did before because we have less overhead.  Patients know what to expect and can budget for it.  They pay on the way out, just like you do at your local grocery store, mechanic, or beauty salon.

The transition from a traditional practice to the direct pay model has been a rocky one.  Despite doing our best to educate people about what we are doing and why, there has still been some confusion.  Unfortunately, many of our Medicare patients and HMO patients have chosen to, or in some cases, been forced to leave.  They are not allowed to submit receipts for reimbursement.  We have had many new patients sign up and have been thrilled.  We are now seeing patients without insurance who had previously thought that any health care was unaffordable and had not seen a doctor in many years.  Patients with high deductible plans are also benefitting because seeing me requires a lot less money out of their own pockets.  Even patients who had to transfer have written me notes saying that they understand and support our decision on philosophical grounds, but are prisoners to their present insurance situation.  We hope to welcome them back some day.

Needless to say, what we are doing is meeting with a lot of resistance from the big insurance companies.  Even though what we are doing would even save them money, because they would be cutting patients smaller checks for reimbursement than they may have paid me, they are doing everything they can to stand in our way.  They are doing their best to have as many patients transfer care as possible.  We have come to the realization that it is more about control than money.  Because we have terminated my contracts with them, they cannot interfere with the way we do business, nor with the doctor patient relationship.

Organized medicine is also not necessarily supportive of physicians making a move such as mine.  The American Medical Association in particular is not, in my opinion, advocating for their constituents.  (It is actually a small minority of physicians in this country that actually belong to AMA, despite what they would have you believe.)  If one is to “follow the money,” they could see why.  The primary source of revenue for the AMA is not membership dues.  They make over 70 million dollars annually licensing CPT (Current Procedural Terminology) Codes to doctors, hospitals, and insurance companies.  These are the codes used in billing transactions between health care providers and the government and insurance companies.  If a doctor contracts directly with a patient, these codes are no longer necessary, and they lose a huge cash cow.  Knowing this, it is no wonder that organization supported the Affordable Care Act because it perpetuated the need for such complexity.

I have found an alternative group to advocate for my interests.  It is the American Association of Physicians and Surgeons (www.aapsonline.org).  They are staunchly opposed to Obamacare and other forms of government and third party intrusion into our personal health care.

Now, I can spend more time with patients because I am spending much less time on administrative paperwork.  We have reduced our overhead dramatically.  Instead of upgrading our complex medical billing software (approx. $6000), we installed Quick Books ($160).  Because of inefficiencies and cost of our Electronic Medical Record, we stopped using it and went back to paper charts.  It saves us time and vastly improves patient privacy.  I had originally been a proponent of electronic records, but when the government incentivized them, instead of being worried about using a quality product which would improve patient care, the focus of practices and vendors was to have a system which would meet the arbitrary criteria which would qualify for stimulus payments.  The vast majority are horrible to work with and make what would have been a 2 page dictated note into one which is 6-12 pages long.   It becomes difficult to glean the important information from the chaff.  I fear that we will later find out that patient safety was made worse not better.  The systems do not talk to one another yet, although that may happen in coming years.  I am very concerned about what is happening to patient privacy as more of these systems become cloud based.  It is very sobering, especially in light of the extent of the recently discovered government spying programs.  Vendors telling me that their systems have “bank level security” no longer reassures me.

I know that this might be more than what you had wanted, but I hope it is helpful in seeing where we are coming from.  I could give you several more pages, but I think you get the gist.



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