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August 31, 2014

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Cutting the insurers out

When Dr. Kevin Petersen began offering cash-pay surgeries to uninsured patients, his friends told him he was crazy. Now, four years later, he wouldn’t work any other way

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Leila Navidi

Dr. Kevin Petersen performs hernia repair surgery at Medical District Surgery Center in Las Vegas Friday, January 21, 2011.

No-Insurance Surgery

Dr. Kevin Petersen performs hernia repair surgery at Medical District Surgery Center in Las Vegas Friday, January 21, 2011. Launch slideshow »

Dr. Kevin Petersen’s peers thought he was crazy when he started offering cash-pay surgery to uninsured patients about four years ago.

But about 700 no-insurance surgeries later, he’s opting out of all of his remaining insurance contracts.

Petersen went to medical school at Tufts University, has been licensed in Nevada since 2000, and has performed about 25,000 surgeries. He says his booming niche business is a sign of the times in American health care, as many patients are uninsured and have few good options for their surgical needs.

The interview with Petersen was edited for clarity.

How did you get started doing no-insurance surgery?

In 2005 a plastic surgeon friend suggested I should do it like they do. They do cash-pay surgery every day, hiring an anesthesiologist and renting an operating room, then putting it together as a package for the patient. We hire the anesthesia and rent the OR.

I pay the anesthesiologists by the minute, and I’m a pretty fast surgeon. I do a hernia in 20 minutes and that saves the patient a huge amount of money. I do most of my surgery at Medical District Surgery Center.

Who are most of your patients?

There’s a particular demographic: in their 50s or older, self-employed, too old to get inexpensive insurance and too young to get Medicare. Most of my patients are from out of town: Florida, Maine, Alaska, Hawaii and every now and then a Canadian who doesn’t want to wait for his national health service.

What procedures do you perform?

Hernia repair is my most common procedure. My package price is $5,000. I hear hospitals would charge $10,000 to $15,000 for it. Gall bladder removal is my second most common procedure. That’s $6,900, which is also a very good price.

The way I look at it, I charge everybody, regardless their ability to pay, the best price. I want to be able to honestly tell anybody who asks that I charge everybody the same fee.

These two types of surgery work well because they’re low risk for the patient and me. And they’re outpatient procedures, so I can keep the price down. The complication rates are very low. And patients can travel soon after surgery.

The aim of health care reform is that everyone would have insurance. How will that affect your practice?

I’ll believe it when I see it. Right now the rolls of the uninsured are growing.

Personally, I have a high deductible policy. I don’t want my insurance company to pay for every doctor visit, lab work, and then take their premium out of it and charge me that plus the profit.

Do you save administrative costs by not billing insurance?

I save on stress. I save on getting rid of that grief in my life. The single biggest disappointment to me in my practice in the past 25 years has been dealing with insurance. They get in between me and my patient. They tell me when I can and can’t operate. They tell me what my service is worth. And in this way they devalue my service. They increase the inconvenience to the patient and the workload in my office. And of all the stuff I do they’ve never helped me take care of a patient.

What do your doctor friends say about your practice?

When I started it, everybody told me I was crazy. One of the other objections I heard early on: You’re going to get sued from these patients. But my uninsured patients are grateful like you wouldn’t believe. I’m treating patients who have been pushed aside by the system.

When I can work in that niche and do important work that I get paid for and get gratitude from my patients, it’s very rewarding.

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  1. I admire and respect this man. Since he does so many of the same type of procedures he probably have more expertise than the general surgeon.

  2. Insurance company management are the bloodsuckers of America. They exist for the sole purpose of enriching themselves.

  3. Health insurance providers are proof that Corporate America can be just as fat, bloated and lousy at what they do as any public bureacracy.
    I admire this doctor, too. Though lets be honest: he's cherry picking the kind of patients he helps. You have to have those easily treatable, low-complication conditions he describes. And $5000 to $7000 dollars is cheaper what the HMO's would charge. But still, it ain't cheap. Other people who need their kidney removed don't always have $7K laying around. And forget about it if you need heart surgery.
    Still, this guy is doing his small part to make it a better place out there for those he can. Amen to that.

  4. You would be surprised at how many physicians will negotiate a reasonable cash price. They're just as flummoxed by this system as the next guy. Kudos to Dr. Peterson.

  5. Nobody hates Big Insurance more than doctors. When professionally trained experts are put at the mercy of accountants the results are predictable: high costs, poor service and mountains of paperwork.

    Americans pay about twice as much for health care than other developed nations, a system republicans are trying desperately to protect because it's their prized campaign cash cow.

  6. Your private health insurance premiums at work...

    * Ron Williams -- Aetna -- Total Compensation: $24,300,112.
    * H. Edward Hanway -- CIGNA -- Total Compensation: $12,236,740.
    * Angela Braly -- WellPoint -- Total Compensation: $9,844,212.
    * Dale Wolf -- Coventry Health Care -- Total Compensation: $9,047,469.
    * Michael Neidorff -- Centene -- Total Compensation: $8,774,483.
    * James Carlson -- AMERIGROUP -- Total Compensation: $5,292,546.
    * Michael McCallister -- Humana -- Total Compensation: $4,764,309.
    * Jay Gellert -- Health Net -- Total Compensation: $4,425,355.
    * Richard Barasch -- Universal American -- Total Compensation: $3,503,702.
    * Stephen Hemsley -- UnitedHealth Group -- Total Compensation: $3,241,042.

  7. "Americans pay about twice as much for health care than other developed nations, a system republicans are trying desperately to protect because it's their prized campaign cash cow."
    ----------------------

    There it is.

    And i m so glad that i have veterans VA hospital access and German govt health insurance.

  8. It's a sad day when getting paid in cash for services rendered warrants a newspaper article. I commend the good Dr. for NOT participating in a broken system. It takes guts.

  9. The issue with insurance and why the system is becoming bankrupted is people running to the doctor with sniffles. Put it on my insurance. Go to the dentist for a cleaning. Put it on my insurance. I've got a small rash on my arm. Put it on my insurance.

    Insurance should cover catastrophic events. Everything else should be out of pocket. Insurance rates would drop like housing prices in Las Vegas. Affordable to all.

    The money saved would more than cover all the everyday, non life threatening illnesses, tests, etc. That people feel should just be paid by their insurance company.

    Even this doctor carries a high deductible policy. It protects him against catastrophic events. Everything else is out of pocket.

    What person can afford family plans that run $1,500-$2,500 a MONTH!!?? More and more people leaving the insurance rolls. I like what this guy is doing. Cash on the barrelhead.

  10. Insurance companies are one of the major reasons the US health care system is soooo expensive and does not work.

    National health care would eliminate this problem. It works in other countries.

  11. Frank,

    You asked about his position if he gets sued. It's the same as any other doctor. They carry malpractice insurance. Working while being paid by a health insurance policy doesn't protect doctors from malpractice charges. In fact, it makes it worse.

    A health insurer cannot be sued for malpractice, under current law, even if they were the ones who denied the authorization for the MRI your doctor ordered and you were later found to have a brain tumor. It's the doctor's liability.

  12. LastThroes...
    You nailed it, again.

    It's a sad day indeed when people are championing a system by which you have to bring a bag of cash or a piece of plastic to pay up front for a necessary surgical procedure.

    Of course there is a market for this kind of service.
    It won't work in 95% of circumstances, and is a "niche" market.
    Republicans have made a MOCKERY of America's efforts to rein in the Health Care Industry and make affordable coverage available to ALL regardless of pre-existing conditions.

  13. You can also throw in the problem of Americans super sizing themselves to ill health. I see it everyday. Obese people AND their obese children running to fast food outlets, over eating, eating garbage. Don't even start me on the smoking.

    It's a two way street. You want to fix the system, make sure people understand that they must start taking better care of themselves thru diet and no smoking.

    Childhood obesity is step 1. I know some schools are now starting "healthy lunch" campaigns. The only problem is they go home and their obese parents serve them garbage for dinner.

    This nation is getting fatter by the day. It has to stop.

  14. I was shocked and pleasantly surprised to see Dr. Petersen getting his own article on this site. He performed a surgery on me and I couldn't have been more impressed.

    I am a Nevadan, with health insurance, but chose Dr Petersen to perform a hernia repair based on his reputation. I had 3 prior hernia repairs, all out of state, and it was an ongoing probem. From beginning to end, I couldn't have been happier with the service and surgery I received.

    Dr. Petersen really is a good guy. He really does care. In three years since my procedure, I have had no problems, but fully intend to return to him incase another situation arises, with a check this time.

    I hate to get off the insurance topic just to throw in props for the surgeon, but any positive attention he gets, for whatever reason, is well deserved.

  15. Someone asked about $1 a day insurance. Be forewarned. This is what is called "junk insurance." Once you sign up, you start getting the bad news about exclusions, deductibles, etc.

    Republicans are pushing the sale of health insurance across state lines at the behest of the health insurance industry. It would eliminate all state regulations, and many states block this sort of junk insurance from being sold in their state.

    I just don't understand Republicans who claim they are going to look out for the little guy while they take millions from big business and do their bidding.

  16. The only plan the majority in the house has is to make Obama look bad. I think he is smart enough to beat them while Chenney carries around his artificial heart and bitches cause he isn't in a position to directly screw up the country and bring us more unnecesary wars!

  17. Hmm, surgery done "fast-food" style, I wonder if the doc has been sued by anyone? And if he has how does all that work into the equation i.e. higher costs for future patients.

  18. A lot of people can't just write a check for $5000. Wonder if he offers some type of payment plan.

  19. Interesting... He gets $5k for a hernia, $6.9k for gall bladder, any one know what the average insurance contracted payment is to docs for these services?

  20. Insurance companies are the problem, so why didn't we consider a single payer health plan in this country? That would have been the end of insurance companies.

    My bet is that those insurance companies paid what it took to persuade a lot of Americans that a single payer health plan meant socialism.

  21. Will this doctor accept chickens for an emergecny Appendectimy operation?

  22. I'd move to Canada in a heartbeat if I could sell my house.

  23. What if someone has a stroke or heart attack on the table, who pays for that? The Doctor, the patient or the taxpayers?

    The insurance companies provide no value and should be eliminated. If everyone was a billionaire would people need medical insurance, or life insurance for that matter? Insurance is just a way for the rich to rip off the poor.

  24. Thank you Dr. Kevin "Cash" Petersen -- hoping the future of medical services follows your lead in ridding America of government bureaucracies, insurance fraudsters and lawyer leaches which have proliferated their costly infectious presents upon the medical/healthcare services sector.

    : {

  25. Interesting that his patients seem to be middle age, middle class folks that can't get affordable insurance.

    I find it greatly ironic that most of the folks who call themselves conservative, and to lesser degree Republicans, rarely receive any personal benefit from policies they purport to support. How do I know this? There are simply not that many people in the income demographic necessary to reap any real financial benefit from the conservative agenda. Big business is the only beneficiary.

    These insurance companies are pushed and prodded by their shareholders to keep making money quarter after quarter after quarter. The shareholders, at least the big players, are other large investors, companies and very wealthy individuals who want to profit from sickness in America.

    Here is a little wake up call for anyone who wants to see what's really going on. Go to your state government's website and look up the total Medicaid enrollment. Look at the trend lines for the last 10 years. Then ask yourselves, how this is all going to be paid for. How is this all going to be paid for when we have less money coming in from more people out of work; less money going into the pot? I'll tell you how: the Feds are going to print more money.

    When you flood the economy with more fiat money to pay for entitlement programs you are simply going to inflate the dollar even further. Thus higher prices for all services, not simply healthcare. Hey, did your 401k earn a 200% return last year? Well if it didn't then you didn't make squat. You can't make real gains when you keep pumping fiat money into the system and inflating the dollar.

    You think the market is improving? Ha! Wall St only looks like it is improving because there are more assets floating around because of more monopoly money floating around. These are not real gains.

    Anyone thinking that healthcare doesn't need an overhaul is living on another planet. Is the current ACA going to fix all of the problems? NO! There are problems with the economy, as a whole, that will preclude that from ever happening.

  26. Take insurance companies out of the equation and something wonderful happens. Insurers are the true money makers in medicine and drive up the price for treatment if they allow the insured to receive treatment at all. Then again, you better not be anything but johnny-on-the-spot with your premiums. Middle-men drive up the cost and produce very little in almost any business venture. The idea of getting permission for any medical procedure is truly barbaric and inhuman.

  27. Finally Healthcare Reform!

  28. Frank Simmons, mred and their ilk is a simlar refrain. Take any issue, whether it be a tiddlywinks championship or a gallbladder surgery and they'll figure a way to make it a diatribe against conservative values. What you can take from these comments is that these people have plenty of time to complain but have no time to be part of the solution. I criticize frequently but give accolades where deserved. These folks are just pathetic examples of self-loathing godless progressive liberals. They wouldn't be satisfied if government sat at their house and doled out cash on demand.

  29. A good example how the Insurance companies are getting a bigger bite every year than the year before from the people.
    Sidney, Thank You for showing us a list of the new vampires and their fat check, and understand why the insurance premiun goes up to the roof every year.
    This is a Doctor who deserves everyone respect.
    He need more followers.