May 28, 2019

What is the Difference between Direct Pay Healthcare and Health Insurance

What Makes Us Different.

If you have found your way to our site, you are probably wondering what we do and if we are insurance. To help you understand how we operate it?s important for you to understand 2 different systems that pay Healthcare Professionals.

System 1 - Health Insurance

This is the most common way people pay for Healthcare today.

Wikipedia defines it as: ?Health insurance is an insurance that covers the whole or a part of the risk of a person incurring medical expenses, spreading the risk over a large number of persons. By estimating the overall risk of health care and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for the health care benefits specified in the insurance agreement.[1] The benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity.?

Or as the the Health Insurance Association of America, puts it ?health insurance is defined as coverage that provides for the payment of benefits as a result of sickness or injury. It includes insurance for losses from accident, medical expense, disability, or accidental death and dismemberment?

System 2 - Direct Pay

Direct pay is a newer type of system that is making it?s way to more Primary Care practices now, but has been around for decades in other Healthcare verticals such as dental, vision, ect or concierge medicine.

There are two methods that direct pay operates under.

Method One is a subscription based model where you pay a healthcare provider a set monthly retainer for access to for them and predefined set of services.

Method Two is paying the costs directly to the healthcare provider without going through an intermediary such as Health Insurance. This type of payment comes in with procedures that are more intensive or operated by a specialist might have additional costs with them.

Now the reason why understanding Direct Pay Healthcare is important especially when it comes to the specialists or more intensive procedures.

Here is a super simple way to think about the two systems of Healthcare Business Models.

Health Insurance - You pay health insurance premiums monthly, when you see a doctor. The Insurance company pays the doctor an amount they deem acceptable. You might have to pay a co-pay, the full bill, or the balance or depending on the network/deductible/coverage.

Direct Pay - You see the doctor and you pay the doctor.

Between the two systems, it?s pretty easy to see which one is less complicated.

The trickier part about Direct Pay is when someone says they had a surgery or went to the Emergency room. Most people might think that they would have had to pay millions of dollars for that and without insurance they would have gone bankrupt.

I?m going to fill you in on a little secret, the amount a direct pay customer pays in those situations is wildly different then what Insurance pays.

Why is it so different?

That is a very complicated answer that raises many questions in itself. At the simplest level Healthcare spending by Insurance companies is very inefficient. So inefficient that almost 30% of all healthcare costs are made up by administration costs.

So when you cut out the Insurance the overall cost of care drops because there is less wasteful overhead.

If you?ve been following along, you might begin to understand how we work a bit better. We are an aggregator of Direct Pay Healthcare services across various sectors of Healthcare. We built out platform aimed to help make people?s everyday Healthcare expenses affordable, transparent, while maintaining quality.

Sounds pretty good right?

We think so, but we know that there are also a few other pieces that are missing to have complete coverage.

It?s those moments you ask what if:

  • I get cancer
  • Get Pregnant
  • Get into an accident
  • Suddenly get sick

How am I going to pay for the costs then?

Luckily, for fears such as those there are insurance companies that specifically offer coverage in those areas at super affordable rates.

We are not an insurance company, so we can?t offer you plans directly but we work with a number of Insurance Companies who you can match our plans with to get that full coverage while still keeping your monthly costs lower than the Traditional Health Insurance premiums you might pay today.

We also have created programs that help you build up savings for medical costs and reward you for being healthy.

So what are we?

Rethink My Healthcare is an Aggregator of Direct Pay Healthcare Services, built on a membership model to help give you lots of access to various healthcare services at affordable rates.

Our plans provides discounts at certain providers for healthcare, wellness, and lifestyle services. Members must pay for all services at the time of service, but will receive a reduced price from those providers who have contracted with the program operator. Providers may not be available in all locations. Offers are subject to change without notice.