By Anne Thompson Chief environmental correspondent
NBC News
updated 5/19/2004 8:23:51 PM ET 2004-05-20T00:23:51

In one Seattle doctor’s office, cash is king.  There are no insurance cards, little paperwork and, ultimately, better medicine, says Dr. Vern Cherewatenko.

“I really only have one person that I’m responsible for now, and that’s the patient that’s in front of me, and it allows that patient to get all the care that they want from me," he adds.

Six years ago, Cherewatenko was drowning in paperwork and red ink, accepting more than 300 different insurance plans with 7,500 different medical codes.

“We were losing $80,000 a month. We were inundated with paperwork. What we found is the more patients we saw, the more money we lost, and it was devastating,” he says.

'Charging less and making more'
Unable to survive, Cherewatenko discovered what he says is a better way — a cash-only practice that’s grown into a national network of 1,600 doctors.

“We have lowered our fees anywhere from 30 percent to 50 percent on some of our services which is incredible,” he says. “And it’s really charging less and making more.”

Steve Nord used to belong to an HMO, but he’s traded it in for a cheaper policy that only covers catastrophic illness, opting to save on premiums and pay for his own routine medical care.  “It just made sense because there was no hassle,” says Nord.  “I just figured I could save more money that way and pay as you go.”

Cash is simple, but is it a real solution to the nation’s health care crisis?  Analysts say it’s only an answer for those who are very healthy or very wealthy.

Dr. Bob Blendon, professor of health policy at Harvard University, estimates that only 5 percent to 10 percent of Americans can benefit from such a system.

“It’s not really an answer for people who get sick, have large medical bills, need X-rays and drugs. Somebody has to pay for that, and those people are really going to need insurance coverage,” Blendon says.

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