“Let me just tell you something. Insurance companies aren’t watching your back, the hospitals aren’t watching your back, and the government is certainly not watching your back. Guess what: us docs are not sheep in the headlamp. We’re not powerless to do anything or to change anything. We’re going to take this healthcare mess into our own hands and we’re going to fix it.” – Dr. Robert Haar, Orthopedist to the Upper East Side of New York.
After about three decades of fencing with insurers, reading The New York Times accuse physicians of putting personal gains ahead of patient welfare and working more as an administrator than as a physician, Dr. Robert Haar has had enough.
He’s chucking insurance over the side.
Effective this year, Dr. Haar’s Regency Healthcare Clinic is going all cash, all transparent, and all patient-focused.
No more army of administrative assistants filling out forms and fighting with insurance companies to get paid.
Enough is enough.
In the Patient’s Best Interest
Dr. Haar’s decision to go the all cash route is fairly recent, but the stimulus behind it was a long time in coming. We caught Dr. Haar after a long day in the clinic and he was very candid about this move. In his view, going all cash, all transparent was really in the best interests of his patients.
As Dr. Haar sees it, “When a patient looks online or tries to call a hospital purchase center and ask ‘what’s the charge’ they’ll find that a lot of these hospital staff don’t know. They don’t know what they’d charge for cash, they don’t know what the surgeon’s going to charge and they don’t even know what the anesthesiologist would charge. When a patient calls the average surgery center or hospital, they find that the staff is clueless. The patient hears ‘we’ll get back to you’. And when they get back to the patient, it’s always sticker shock.”
Indeed. We’re reminded of the recent New York Times article which told the story of a patient in Washington State who’d been told that a knee replacement operation would cost about $65, 000, not including the $13, 000 implant.
We at OTW knew that the New York Times article was way off base because not two weeks earlier we’d published our ranking of the top hospitals in the U.S. for total knee operations (TKA). These were not only the hospitals with the lowest complication rates in the country but also had the highest volumes in the country (those attributes are often found working hand in hand). Not a single one of the hospitals in our survey charged anywhere near $65, 000 for a TKA. In fact, the range of charges was closer to $17, 000 – $30, 000.
Wal-Mart and Lowe’s
And, it seems, the larger companies are also looking at more direct payments to providers like Dr. Haar.
Wal-Mart and Lowe’s have decided to offer free hip and knee replacement surgeries to their employees. They launched a program called the Employers Centers of Excellence Network (ECEN) and are starting to offer no-cost (to the patient) knee and hip replacement surgeries for their employees.
The two companies negotiated directly with four orthopedic centers:
- Johns Hopkins Bayview Medical Center in Baltimore, Maryland
- Kaiser Permanente Orange County Irvine Medical Center in Irvine, California
- Mercy Hospital in Springfield, Missouri
- Virginia Mason Medical Center in Seattle, Washington.
In exchange for a flat cash fee for both surgeries (no hidden costs, no extra charges for the anesthesiologist or rehabilitation and no co-pay) Wal-Mart and Lowe’s are offering to pay 100% of a hip or knee replacement where everything is covered including travel, lodging and living expenses for the patient and a caregiver. This program covers 1.5 million employees!
Could Dr. Haar be onto something?
“As we all know” said Dr. Haar, “there are millions of people who are un-insured or work for self-funded companies. There is a growing need for providers and facilities that provide transparent pricing where patients know what exactly a price for a procedure is. And that is a global or bundle payment. There are no hidden fees. No surprises at the end of the episode of care. They know exactly what they are paying for up front. Without the administrative hassle, overhead and layers of bureaucracy that are usually commensurate with insurance based care.”
Dr. Haar’s Practice
Dr. Haar received his medical degree from Tufts University School of Medicine and completed his residency at Montefiore/Albert Einstein. He’s been treating patients for nearly 30 years.
In line with his new emphasis on cash and transparency, Dr. Haar renamed his clinic Regency Healthcare (www.regencyhealthnyc.com) and revamped his website. Physically, he is located at roughly 90th Street and York just off the FDR Drive across from a beautiful park. Regency offers a full range of orthopedic procedures including knee, shoulder, foot and ankle, spine, hand and arm.
In fact, here’s a selection from his price list which he posts on his website:
“The bread and butter of my practice are knee and shoulders. The most commonly performed procedure is knee arthroscopy. Certainly we expect that to be our most common procedure and that is priced the lowest given the rest of the procedures that we offer our patients. I think that is very fair and very attractive approach.”
In terms of pricing, Dr. Haar is competitive with his nearby hospitals (which includes Hospital for Special Surgery). In fact, says Dr. Haar, “We’re more competitive than the average ambulatory surgery center because our costs are lower! We don’t have the administrative load that these other providers do. We don’t have all these administrators in $4, 000 suits in burled wood offices. I never saw a CEO from Aetna or Cigna or UnitedHealth[care] who wasn’t running around in custom tailored, thousand dollar suits.”
On Dr. Haar’s website is the following statement: “We make every effort to decrease the cost of your medical care. Therefore, we request payment arrangements for all office services at the time they are rendered unless prior arrangements have been made. We accept cash, checks, MasterCard, and American Express for your convenience.”
Regulatory Issues
We asked Dr. Haar about any regulatory issues and he said: “From a regulatory, from a compliance or from any other vantage point, this is clean, this is transparent, this is free market, this is an alternative to having to deal with insurance companies.
“Patients generally know what they need, what they want and if they’re not sure then they would see their local physician, they might have imaging studies, they may have conservative care. This is an a la carte surgical procedure menu for patients who know they need certain surgical procedures and can select those procedures that they may need and know exactly what they’re paying for.
The all cash, all transparent approach “really doesn’t change the type of patients I’m seeing although a sizeable number are un-insured for whatever reason. Either their employers don’t offer insurance or they are self-employed or they are small businesses or they can’t or don’t want to buy insurance. Often they think they’re healthy but all of a sudden they have an injury or a condition develops where they need a procedure. So there are very few alternative for these sorts of individuals.”
After 30 Years…
“When you’ve been in the trenches as long as I have, you get sick and tired of having to hire an army of people to collect your money.”
And from the perspective of the patient and companies who are taking a more active role in funding their employee’s healthcare needs, Dr. Haar’s leap into a cash-based practice may well be the trend of the future. Notably, it is being driven by the physician.
As Dr. Haar told us: “This is just the tip of the iceberg.”
