It can work beautifully! However, there are many well-intended anecdotal theories and tribes with answers that may not necessarily maximize your potential. So, let's identify our parameters and then zero in on what the marketplace and compliance guidelines tell us will work best. It might surprise you to discover that people figured out the best way to structure cash healthcare a long time ago—and it still works great.

The US has two (2) reimbursement systems, namely Medicare and Medicaid, that collectively cover about half of the US population. These models are tax-funded, with citizen contributions in the form of partial coverage, deductibles, and out-of-network costs. Federal and state laws prohibit charging eligible patients cash for services covered by either program. Therefore, a crucial parameter to consider is how to implement cash healthcare in the US without violating federal Medicare and state Medicaid guidelines. It's worth noting that HMOs also have state laws that prohibit cash charges for covered services. In fact, this is the most important parameter to navigate. The good news is that achieving this is not difficult, and there is a US cash healthcare model that predates the existence of health insurance, functions effectively, and has been in place for over 100 years! Are you curious to learn more?

Not everyone is curious; some seek a fast, comfortable, and easy answer. Collegial, informal, and less-informed guidance often suggests opting out of Medicare, staying out of the network, and doing as one pleases. But what about Medicaid and HMO? The approach of excluding them altogether is unfortunate for several reasons. Furthermore, this approach is not the model that has proven successful for over 100 years (as Medicare and Medicaid were established in 1965). Another quick fix is to determine whether a patient has Medicare, Medicaid, or HMO and either exclude them or adopt a different approach. However, this is not an elegant solution and can lead to poor compliance and bad business practices, resulting in a messy and unsustainable pricing or practice model. Are you curious about the model that has stood the test of time for over a century and continues to work beautifully?

The US has a successful cash healthcare model that is over 100 years old and predates the existence of insurance-reimbursed healthcare. It was initially created to extend the lives of executives who lacked obvious signs of health challenges, unlike manual laborers. The model was designed to provide annual routine exams and ongoing communication support aimed at the early detection and better management of health issues. Known as the "executive health model," it operates on an annual transparent cash fee structure, offering consumers several benefits. Firstly, it provides a predictable annual fee for high-connection care aimed at prevention more than disease treatment. Secondly, it ensures durable and predictable practice revenues detached from delivery, where medicine becomes a connection rather than a commodity paid for only when delivered.

Moreover, this model is Medicare, Medicaid, and plan-compliant. Routine exams, physicals, and ongoing communication support are excluded from Medicare coverage by statute and not covered by Medicaid, HMOs, or private plans. The model charges for services not covered by these plans, making it more consumer-oriented and shifting healthcare towards a preventative wellness mindset.

Furthermore, this cash healthcare model eradicates the unfortunate misalignments of insurance-based healthcare in the US. It offers convenience as the care connection is pre-funded, eliminating price and money delays or inconveniences such as nickel-and-dime office visit charges, co-pays, or deductibles for cash services. Additionally, it rewards the practice for achieving wellness since the annual fee remains the same as the patient's health ideally improves, resulting in less time required for care and a financial reward for wellness. This is something fee-for-service models, whether through insurance or complex cash-for-service menus, cannot achieve.

It is not surprising that this cash healthcare model works so well as an alternative to healthcare insurance thinking. It is not a mere "reaction" to insurance but rather predates the existence of healthcare insurance itself.

The executive healthcare cash model that was created around 1920 has persisted to this day, but is it only meant for executives? Certainly not. In 2023, the reality is that almost everyone's job description puts them in a category of facing health risks that may not be obvious but can benefit from preventative intervention. The first "concierge" cash healthcare practice model was inspired by the Cleveland Clinic executive health program, but aimed at anyone willing to invest in the annual fee.

However, is this "concierge" medicine? Not entirely. Many of the concierge models have drifted from selling routine exams and communications to marketing "access" and "extra time," which has had negative consequences. Instead, the compliant executive healthcare cash model can be called whatever one prefers, but it works beautifully for any version of practice. Whether one wishes to do direct primary care (DPC), have a more "concierge" style, or practice integrative/Functional Medicine/BHRT, fitness-oriented, lifestyle intervention, or health coaching, this model is effective for any style of health theory or practice.

So, the best approach for US cash healthcare has not changed in 100 years: frame cash services as the availability of routine exams or physicals supported by ongoing communication services focused on achieving routine exams health goals. That framing is entirely outside Medicare coverage by statutory amendments to the Social Security Act in 1996 and 2004 – not magic, just the law. Of course, the executive model was legally protected from violating Medicare – it is a privileged model, but we can bring versions of that model to anyone/everyone with the right combo of pricing/services. The most successful versions of cash healthcare have ditched the names "executive" and "concierge" and use this model to deliver workable preventative-minded healthcare services lawfully for reimbursement outside plan coverage.

I have worked in US cash healthcare for up to 14 years and have asked myself: why does this specific model work so well? Here's what I see: a) Consumers are more willing to pay for what insurance plainly does not and will not cover—the value proposition is more obvious, and the model does not look like a version of insurance, so it is less confusing; b) The model's pure subscription pricing (which can be paid annually or monthly) creates durable and sustainable practice revenue as a subscription pricing model with fewer pricing decisions for consumers to make; c) The model is 100% compliant with federal and state laws regarding cash for non-covered services—none of the prominent national executive health models are having legal nightmares about their model or irrational legal fears, and neither should you (just call it something else and do what you truly believe in using that model). e) This model is easily rendered tax-advantaged—the cash fees can be easily framed as "qualified medical expenses" under the Internal Revenue Code/IRS Publication 502 right now (no legal reforms desired or required), rendering the fees suitable for HSA/FSA/HRA/MSA funding (and employers can easily fund them). By contrast, the informal "just opt out of Medicare" and "stay out of network" and "create a cash menu" approach does not fully handle all the compliance challenges, does not create the most compelling cash practice model, does not always create "qualified medical expense" status, and simply does not work as well in the marketplace. This is not to criticize other approaches—they can also work well—but they lack the privileged advantages of federal law enabling it.

In the end, healthcare professionals are searching for answers to the misalignments of the US healthcare system that is too dependent on insurance coverage concepts, struggles to effectively fund preventative care, and ends up creating a perfect recipe for the most expensive care in the world with poor public health outcomes. It makes healthcare an unpredictably costly and inconvenient experience (do you know what that ER visit will cost, because no one does), leading to delayed intervention until crisis hits. We have nailed this in the US—it creates expensive high-crisis intervention costs without effective prevention. The routine exam/communication model, originally created to keep executives alive in the 1920s, is now a federally protected and privileged model available to any healthcare professional's medical vision to be implemented as a lawful and tax-advantaged cash healthcare framework. Does this model bill Medicare, or Medicaid, or any other insurance? If it wants to! It need not deliver covered care, ever. Or it can. You see, this model creates effective choices, empowering healthcare professionals away from recipes to follow and instead allows them to bill plans or not bill plans, to provide preventative care or sick care or both—whatever they want—and to do so in a protected and privileged model that is tax-advantaged (allowing consumers to use pre-tax or employer funds).

If you want to be free of insurance 100%, fine. So, don't replicate the mistakes of US healthcare insurance: a) don't have a complicated cash menu, don't treat healthcare as a commodity with as-delivered pricing; b) don't ask consumers to constantly make price/services decisions—use subscription price psychology and make investing in health easy; c) reimburse prevention in a way that financially rewards healthcare professionals for achieving reduced interventions—this capitated model works well on that issue; and d) adopt a model that immediately gives consumers the ability to safely use their HSA/FSA/HRA/MSA funds now and lets employers lawfully fund these preventative intervention-reducing services.