NCPA - National Center for Policy Analysis


October 24, 2007

Several hundred doctors across the country are offering flat-rate, pay-in-advance health plans.  Though still experimental, proponents argue that the approach tackles two crises in U.S. health care -- the rapid decline of doctors practicing primary-care medicine and the growing number of Americans who are either uninsured or underinsured, says the Wall Street Journal.


  • While specialists' incomes have held steady, family physicians and internists have seen their incomes shrink 10 percent because of flat or falling reimbursements.
  • According to the British Medical Journal, the average American logs barely 30 minutes a year with a primary-care physician -- half the time spent in other developed nations.
  • That helps explain why the United States spends much more on health care than its economic peers, yet still falls behind on basic indicators such as life expectancy and infant-mortality rates.

Prepaid plans help fill this gap by offering patients a flat-rate fee for basic care, as opposed to traditional insurance, which is priced to spread the risk of high-cost illnesses across many people, increasing premiums, says the Journal. 

And while some are still skeptical, many business owners say they've saved big by taking the prepaid route.  For example:

  • Phil Santinoceto, a small business owner, used to pay more than $130,000 a year to cover himself and his 20 employees; in a single year, 2005, he got hit with a 32 percent rate hike.
  • Last year, he switched to a prepaid plan and a major medical plan with a higher deductible and saw monthly savings of $4,000.
  • This year, instead of a premium increase, his insurer actually lowered rates by 3.4 percent -- largely because the staff used less specialty care, required less time in the hospital and used a prepaid plan clinic for nearly all of their primary care.

Source: Vanessa Furhmans, "To Cure Insurance Woes, Doctors Try Prepaid Plans," Wall Street Journal, October 23, 2007.

For text:


Browse more articles on Health Issues