Insurance-Free Medical Practice Rids Office of Bloated Paperwork

BURNSVILLE, MINN., March 20, 2010 — -- At Dr. James Eelkema's office, there are no insurance cards to show or endless forms to fill out. If you've got cash, you've got care.

"I think people get pretty good care in this country," said Eelkema, a primary care physician who has been practicing medicine for nearly 30 years. "But the health care financing part may need some tweaking."

Over the years, Eelkema grew increasingly frustrated with insurance company red tape and meddling. One day, about a year ago, he says insurers began requiring him to change his patients' lifestyles, and that's when he had enough.

"The insurance companies changed their rules from just recommending stopping smoking to the patient actually having to stop smoking and tying my compensation to that," Eelkema said. "I thought this isn't what I went to medical school for."

So last summer, Eelkema cut out the middle man and started a new insurance-free practice. At his clinic, TimeWise Medical, patients pay on the spot with cash or credit after receiving care.

He charges $36 for one ailment and $54 for two. If a patient has three or more problems, Eelkema recommends a physical, which costs $110. For as little as $90, Eelkema will even make a house call. Prices for his services are listed on his office Web site.

"It's one-on-one, the way it should be, without the third party," Eelkema said.

Less than 2 percent of primary care practices in the U.S. are exclusively cash-only, according to a recent survey conducted by the American Academy of Family Physicians. But it's a growing niche as the number of uninsured and underinsured patients swells.

In a national survey of doctors published last May in the journal Health Affairs, physicians said they spent an average of 43 minutes each workday handling insurance paperwork. That lost time costs practices a combined $31 billion each year, the study concluded, or nearly $65,000 per doctor.

By Cutting Insurance, Overhead Costs Lowered With Cash-Only, Credit Cards

"I think cash-only practices are more likely to expand throughout the nation," said Dr. Lori Heim, president of the American Academy of Family Physicians. "Physicians are angry, and they are tired of the insurance company abuses that they feel."

Eelkema says cutting out insurance lowers overhead costs. He has a bare bones staff -- just one assistant -- and works in a small office. He says that lets him charge patients less.

Patient Bob Kos paid Eelkema $138 for a complete physical and to have a skin growth removed. He has insurance, but because of his policy's $5,000 deductible and high out-of-pocket costs, he had avoided seeing a doctor for years.

"I went on his Web site and checked out the prices, and it's probably two-thirds less [than paying with my insurance]," Kos said. "I think I saved probably over $700."

Kendra Larson, an uninsured mother of four, took her son Benjamin to see Eelkema.

"It's definitely more affordable for our family," Larson said. "This is actually a blessing to know that I have somewhere to go and can get the same care and not have to pay as much."

Though he says he offers 80-90 percent of the services that most primary care doctors perform, Eelkema's practice is somewhat limited. He doesn't offer pregnancy care or treat serious lacerations or fractures. He also doesn't do hospital work. For patients who require more than routine care, it may be more cost-effective to go the traditional insurance route.

"If you have to have follow-up tests on a very frequent basis, then it would make more sense to stay with the traditional plan," said Heim, president of the American Academy of Family Physicians.

For Eelkema, business can be slow without the network of patients insurers provide. After several months, he recently started seeing enough patients to make a profit. Still, Eelkema says he doesn't miss dealing with insurers.

"On weekends, I can't wait to get back to the office," Eelkema said. "I love it."