Editor’s Note: We’re all familiar with the concept and the benefits of the ’empowered patient’. But what about the ’empowered physician’? Here’s an interesting tale of one surgeon taking charge of virtually every aspect of the care he delivers, including cost. The benefits to both he and his patients are quite clear.
Medical Travel Today (MTT): I understand the motivation for starting No Insurance Surgery, but I am curious as to how long it took from conception to actual launch, as well as how you determined milestones for success.
Dr. Kevin Petersen (KP): I started No Insurance Surgery five years ago when the idea first occurred to me, and I have forged my own path. My experience dealing with uninsured patients on a cash basis in my practice for many years made it easy for me to accept patients who were uninsured or unable to find the surgery they needed at a reasonable price.
For those patients, I quoted my normal fee and provided a 50 percent discount. I then gave them contact information for an anesthesiologist and facility, allowing them to make those additional arrangements and negotiate fees on their own.
In a period of about 20 years, I dealt with about 30 patients in this way. One day I discovered that the anesthesiologists and facilities I’d been recommending were charging exorbitant rates to the patients I had referred. This was unacceptable to me. I stepped in and attempted to negotiate better prices, but with little success. After some additional investigation, I learned that the facilities had contracts with insurance companies that included a ‘favored nation’ clause stating that they could not charge less than the insurance company’s quoted fee. The same was true for the anesthesiologists, although to a lesser degree.
In 2005, I pondered the business model of plastic surgeons who were charging a package fee for surgery that included the facility and anesthesiologist. The doctors negotiated reasonable fees in advance, a strategy that resulted in a much better deal than what patients were able to negotiate on their own.
I spoke with representatives at a number of facilities, eventually identifying a handful of facilities that were willing to offer an equitable rate. In addition, I negotiated with an anesthesiology group with whom I had worked and trusted. They offered me the same price they charged plastic surgeons. From there, I was able to develop and market a cost-effective price – with great success.
MTT: How did you go about marketing the package?
KP: I found that traditional methods – trade venues, billboards, newspaper ads, radio and television – were unsuccessful. Online marketing turned out to be the most economical way to target potential patients.
MTT: How has the nature of the types of patients and procedures you see changed with the new model?
KP: Principally, I perform hernia and gall bladder surgery, which works well with this model. Both procedures can be performed safely on an outpatient basis, with minimal follow-up care. More complicated procedures that involve hospital stays and more intensive after-care don’t work with this model.
MTT: Are your patients traveling far for your service?
KP: My patients come from all 50 states, including Massachusetts, which is interesting given that state’s universal healthcare. I’ve also seen patients from as far away as Thailand, Vietnam, and Argentina.
The appeal for these patients goes beyond the no-insurance approach. They come first for hernia repair without mesh, and then they come because of the proximity to Las Vegas and all that it offers. Last month a patient won $10,000 in one hand of a card game. Also, flights to Las Vegas are reasonable from virtually anywhere in the world.
MTT: The cash-only advantage of your model is clear. What are some other advantages and disadvantages?
KP: At times I miss the old practice model and hospital work – the complicated ICU and big cases like gastric resections. Other than that, there are no disadvantages. Contrary to expectation, uninsured patients are not more litigious. In fact, they are easier to deal with.
If a patient experiences a complication from surgery, which is rare, I have them hospitalized. For that cost, I am not responsible, which I explain up front. That said, my patients receive 90 days of global care, which includes care for wound infection and other minor complications. But these kinds of occurrences are rare.
MTT: Are you aware of others adopting the model and/or are you fielding a lot of calls about its viability?
KP: So far, few are willing to take the extra steps to model their practice after mine, opting for the security of the status quo. Part of it is that such a transformation requires time and energy.
MTT: Are you working with or cultivating relationships with facilitators?
KP: In my case, I don’t see the necessity. I’ve identified a particular niche and developed it, building up my reputation on the internet to support my practice. That said, I do think there’s a need and market for their services. I’d like to see more domestic medical travel.
Currently, too many people go to India for knee and hip surgeries, while there are plenty of orthopedists in the US who, with a packaged price, could accept patients from anywhere.
About Dr. Petersen
Dr. Kevin Petersen was board certified by the American Board of Surgery in 1986 and then recertified in 1994. A magna cum laude graduate of the University of Utah, Department of Physics, Dr. Petersen earned his medical degree, with high honors, at Tufts University, in Boston. Dr. Petersen received resident surgery training at the U.C.L.A. Medical Center, and completed a fellowship in Organ Transplant at Los Angeles County/USC Hospital. He served as chief resident while completing his surgery training at the Chicago Medical School. He has participated in the training of medical students and surgical residents as an assistant professor of Surgery at the Chicago Medical School, the Chicago School of Osteopathic Medicine, the Nevada School of Medicine and Touro University in Nevada. His career experience is over 10,000 major surgical procedures including 4,000 non-mesh hernia surgeries and 3,000 cancer operations and 4,000 other operations for treating a variety of life threatening conditions. Dr. Petersen has a particular interest in non-mesh hernia repair and treatment of hernia mesh complications.
In addition, Dr. Petersen is the founder of Helping Hands Surgical Care, a non-profit organization that helps fund and facilitate care for patients who don’t qualify for Medicaid or Medicare, and do not have the necessary insurance or cash to cover the cost for surgery.
In November 2011, Helping Hands for Surgical Care hosted its inaugural Charity Surgery Day. With the support of local hospitals, surgeons, and anesthesiologists, the group performed ten surgeries in one day at no cost to the patients.
Helping Hands relies on the generous support of the community to provide care for others in need. To learn more, visit www.helpinghandssurgicalcare.com.