In this country the medical payment system is hopelessly complicated.  No one fully understands it.  We spend incredible amounts of money trying to run and control it.  If you were to enter a hospital and pay for a hip replacement privately, it would cost you over $100,000. The government (Medicare and Medicaid) pays hospitals about $23,000 (facility fee), and surgeons $1000 (professional fee) for this operation. 

I have determined that hospitals (using the best joint implants that cost $6000 each) can probably provide the service at a cost of $15,000. With a government payment of $23,000 they make a healthy profit of $8000 (35% profit margin). On the other hand, the government proposes to pay MOSC a $8000 facility fee for the same procedure… clearly a money losing proposition for us. This is why I cannot offer my procedure to government insured patients at the MOSC, I must take these patients to the hospital instead, where the government pays a generous fee. Patients not covered by government plans are routinely billed over $100,000 for joint replacement facility fees at hospitals. Most insurance contracts provide for some discounts, but the costs are still exorbitant.

I estimate my office overhead cost for providing the professional services for a joint replacement is approximately $2000.00, which means I would actually lose $1000 on each government insured patient on whom I performed surgery. If I were to become a hospital employed surgeon, the calculus would change. The government would pay the hospital higher fees for the same services (They would add facility fees on top of professional fees for office-based work). Also, the hospital would subsidize my Medicare professional fee from some of their facility fees collected on my patients. Therefore, hospital employed surgeons get paid reasonable fees on Medicare patient services. I am unwilling to give up my autonomy in private practice, therefore I am unable to accept the deal offered by the government and I must make a private contract with you if you are covered by a government plan.

This calculation illustrates the tremendous damage the government does as it distorts the payment system. It forces doctors to become hospital employees. We lose control of many aspects of patient care to professional hospital managers.

My global prepayment contract was developed to offer joint replacement to anyone who does not have insurance coverage at a reasonable cost.  We can offer these rates because we know we will receive the full payment, and we will not have to devote office resources to seek late payments from insurers.  If your insurance company does not have a contract with our Surgery Center or Midlands Orthopaedics, they certainly can choose this option as well; however, they must prepay the entire amount.  This offer is not valid after services have been rendered.