It might seem wild that a doctor or hospital won’t take your insurance, especially since more than 91% of Americans have at least some form of coverage. After this pod, you’ll know what “out-of-network” really means as well as the choices you have when health insurance doesn’t go too far.

In strictly financial terms, it’s wiser to seek a provider who takes your insurance. You’re already paying a king’s ransom for the insurance you have so why pay more? In any other context, a doctor accepting your insurance won’t be necessarily better than a provider who does not (at least without regard to a given facility’s resources). A number of insurance plans do offer a little coverage for seeing a provider who doesn’t participate in a given network, but for a good amount of the time, you are going to be paying full price for medical care when going to such places out-of-network. Just for clarity, something is considered out-of-network if that provider or facility does not have a negotiated contract with a given health plan for reimbursement. We’ll save the discussion about medical care quality for a longer episode but there are legit reasons why some providers don’t contract with health plans. For now, I’m going to focus on what happens with seeing an office-visit-focused doctor who’s out-of-network, because getting emergency care out-of-network is another can of worms that’s better to open up later. In any case, when you visit someone who’s out-of-network, they either bill your insurance for a small payment then bill you, the patient, for remaining balances, or just charge you full price for care out-of-pocket. Doctors who do not accept Medicare or private insurance usually do so for three major reasons: burnout, administrative challenges, and payment issues. Medicare and some private insurance plans have strict requirements incentivizing doctors to check boxes of data and see a high volume of patients. As a result, some physicians want to shift attention back to patients and in turn stay away from spending too much time entering medical data. Some physicians just hire more staff to take care of these necessary evils but the fact remains that due to current law and incentives, most providers are better off in a large group or hospital practice to deal with all the red tape. A doctor who visits several dozen patients a day and needs to enter reams of clinical notes for each person is just a byproduct of volume demands and increased day-to-day admin responsibilities. Hence, some physicians believe that spurning insurance plans leads to better control over both their professional and personal life.

In response to the current incentives from insurers and big-medicine organizations, some doctors are detaching themselves from the current system by going fully private with direct pay business models. A successful out-of-network doctor who bills patients directly without any link to a health plan usually has a massive following and unparalleled medical expertise that appeals to enough people willing to pay for that kind of next-level attention. This is why, if you have disposable income, or your healthcare sits high on your priority list, you should be flexible with primary or specialist doctors who may not take insurance plans if they are skilled in treating a particular medical condition you have. If you are willingly seeing a provider who doesn’t take insurance plans, you should ask for a quote regarding whatever office visit or service is needed.

I do respect that not everyone in the US has a fortunate enough situation allowing them to invest more on their healthcare, but we should remember that even though every physician has finishes years of training before seeing patients without supervision, you shouldn’t assume that two doctors in the same exact specialty accepting the same exact insurance plan are of equal quality. You can compare apples to apples or smartphones to smartphones, but comparing one internal medicine doctor to another provider in the same field is not that simple. One of the doctors could have practiced medicine a couple decades longer but the fresh-off-the-boat resident could have gone to a better med school with access to new research and resources. Another doctor may have the benefit of seeing a particular demographic of patients in the tropics versus colder places. There are lot of variables involved since medicine both a scientific and human capital profession.

Even though a few out-of-network medical practices are making names for themselves, the hard reality is that few providers can live without insurance plans. Take Medicare for example. According to the CMS’s provider database, just 1% of all non-pediatric physicians opted out from Medicare in 2020. And in 47 of 50 states, less than 2% of respective physicians in each of those states opted out. A doctor who opts out from Medicare can enter a direct payment relationship with patients to bill fees above whatever Medicare reimburses for any given service. Although some doctors can keep one foot in the door by having the choice to bill Medicare or not by calling themselves “non-participating,” the handful of providers going the distance to sever themselves from Medicare sail their own ship. Even though it’s clear that doctors need Medicare more than Medicare needs them, the greater challenge for patients is that participating, in-network doctors may reject new patients who have Medicare because the reimbursement is minimal. Medicare payment tends to be 80% or less of whatever a private insurance plan reimburses for a given service like an office visit. I’ll link the data review done by the Kaiser Family Foundation on my Substack page found at rushinagalla.substack.com.

Seeing an office-visit-focused doctor without insurance is a totally different story from getting help by an emergency provider out-of-network. Because most patients don’t choose when their emergencies happen, patients tend to leave the financial consequences of an ER visit off their minds till later. You could be discharged from the hospital, your insurance could get billed 100k, the insurance covers 30k but you’re on the hook for a 70k balance since the providers taking care of you during that period were out-of-network. This is where the horror stories of crippling medical debt come from. Thankfully laws such as the recent No Surprises Act safeguard patients from getting balance-billed for emergency care at in-network facilities among other venues. Regardless of your need for emergency or routine care, you may ask a facility to give you a “good-faith” estimate of services. Again, when pursuing out-of-network care in general, you should feel comfortable asking for quotes or price ranges. Adding in a bit of fee transparency to in-network or cash-pay healthcare makes us all better off by introducing a little competition with accountability.

Another cool topic in healthcare that’s getting a clearer look is the realm of precision medicine. Imagine what happens when a given medication is matched perfectly with your genetic disposition. That’s cool but this concept has been around for years. In the next pod I’ll talk about what’s new with hyper-customized treatments and what that should mean to you. Subscribe and stay tuned to Friendly Neighborhood Patient for healthcare economics and other fun themes. I’ll catch you at the next episode.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit rushinagalla.substack.com