October 21, 2013 by Joshua Cook

SC Doctor Discusses Reasons to Get Off the Insurance Grid



South Carolina Doctor Mike Vasovski has joined a growing group of doctors and taken his medical practice off the insurance grid.

Last week Dr. Vasovski wrote on his Facebook page:

"My medical practice has gone off line. Effective yesterday, the computers that contain patient's account information including billing diagnosis, have been completely de-linked from the internet. Therefore, your health information is completely secure. Accounting will be done in house with Quickbooks on a PC that is not connected to the internet. We are moving towards a payment at time of service model in which my practice does not participate with insurance companies. Fees will be truly affordable and your medical records will not be in a format that can be accessed electronically. Peace and Liberty, Dr. Mike Vasovski."

In an interview with Joshua Cook, he discussed a variety of reasons – both ideological and practical – for his choice, and described the effects of these actions on patients. Vasovski showed how such practices could keep a free market healthcare system alive even as Obamacare takes effect.

"Off grid" or "cash only" practices collect money directly from the patient at the time of service. Vasovski described two off grid payment models, one in which doctors charged a per month fee in which people could visit as often as necessary, and one in which there is simply a reasonable office visit charge. Vasovski's practice has chosen the second model with a $45 benchmark, and says that is enough to provide most services because most vaccinations and other shots are being provided by pharmacies.

"So we're not responsible for buying those things, storing them and counting them and that kind of stuff." Adding that cost-saving development to the nearly $6000/year saved on insurance software, this becomes an increasingly viable business model. There is also a huge number of generic drugs – over 300 – available for $4/month at major pharmacies. "That's less than a 6-pack and it gets you a month worth of your medicines."

The direct payment business model has a number of benefits for both practices and patients. One of the most topical is security. Because Vasovski's office isn't connected to insurance companies, he has been able to take his entire practice off the internet. No hackers, Assange-like activists, or government entities can access any patient information, like Social Security numbers or health problems.

Even the most "secure" encryption services cannot provide that assurance. He even described a telephone call in which a salesperson tried to sell him a 284 bit encrypted program. When Vasovski asked him what he thought of Julian Assange, he replied that he didn't know who that was. "At that point I said, 'you're trying to sell me a computer security program and you don't know who Julian Assange is?'"

Another benefit Vasovski described is lowered costs. With insurance companies acting as the middle man, there is no check on costs because there is no incentive to cut back on costs. Insurance companies earned more the higher the prices, and consumers aren't paying the bill. "So it looks like healthcare costs more, but that's not the true bottom line." In fact employers had to deal with most of the costs of care. "In the price of a new car from GM, like 14-15% of the cost of the car is nothing but health insurance."

Vasovski also said that the off grid system improves the doctor patient relationship. "You do spend a little more time – not less time – you spend more time with them, and by design, you're going to be a little bit more interested in satisfying them than if it's just a checkmark on a sheet with the bill going to the insurance company."

On a more ideological level, the direct payment model also gets back to the true nature of insurance. "If you're dealing with no deductible or a $20 co-pay for a visit or something, it's not really insurance because then it's like going to eat at the Golden Corral. Once you're in you get to eat all you want." People don't use car insurance for oil changes; they use it for wrecks. A $5000 deductible means people can use insurance for any major event – even a broken leg will cost about $10,000 to fix and any emergency room visit will start at $2,500 – while paying $45 for simple visits. A high deductable "turns it into real insurance. It's only used when there is something really bad, and the rest of the stuff you have to pick up on your own. Then you become a very good shopper."

Dr. Vasovski eliminated the insurance aspect of his practice because he could provide better care cheaper on a free market system. Many doctors who are currently deliberating whether to keep their practices open may choose to convert to such a system, too. Direct pay programs, along with generic drugs and pharmacy-provided shots and vaccinations, mean that the free market will continue to play a role in healthcare and insurance.