The American Association of Patients and Providers, or the AAPP is the largest Patient/Provider organization in the United States, SimpleCare, is our flagship program dedicated to returning a means of providing common sense, affordable, patient-driven healthcare to the healthcare community.
The AAPP represents patients and providers of health care who want to work together to fix the health care system. Rather than insurers, attorneys, and special-interest groups, why not patients and doctors as the agents of change?
The AAPP was created by three MD’s in Seattle who decided there had to be an easier way to provide high quality individualized healthcare without the hassle, inefficiencies and exorbitant pricing schemes of the health insurance industry and government. These doctors took paying for healthcare back to how it was originally meant to be, an affordable and simple transaction between the patient and provider, just like how you pay for any other product or service.
The AAPP Story
In 1997, Vern Cherewatenko, MD and his associates decided to figure out why, when they couldn’t be busier, they were losing so much money? Why were they rapidly flying their businesses straight into the ground . . . not to mention the usual conversation about "where has the fun gone?"
They both had excellent business staffs and business-wise ran a very tight ship. Their combined practice billings totaled over $10 million–not a tiny operation by anyone’s definition in 1998. Yet they calculated losing approximately $7 per patient or $80,000 per month.
That loss could not be made up in volume. The standard managed care response “You just need more patients to win at the capitation game” couldn’t have been farther from the truth! Between the two clinic systems they took care of approximately 75,000 patients a year with 55 providers between them. The losses continued, and they depleted their total net worth and assets over a two-year period.
They knew they were losing money on several insurance types–Medicare, Welfare, L&I, Pacific Care, Aetna, Blue cross–virtually every managed care plan. They feared they could not suddenly cancel all managed care contracts . . . but the reality was they couldn’t remain viable if they continued with them.
The Paper Chase
Their practice was literally being exterminated by an expanding amount of paperwork intended to “improve care and hold down costs.” At one time they needed six medical records clerks, up from two, just to photocopy the records of patients who, on a monthly basis, transferred in and out of our care on these various managed care plans.
They took a look at an average patient charge:
Their charge then for a 10-minute patient visit was $79. The insurance companies typically reimbursed $43. Costs of collection were anywhere from $5 to $20 depending on the staff time, billing system, etc. All doctors know they don’t get reimbursed the full amount they charge for a visit, but most doctors completely overlook what it costs to collect even the discounted reimbursement. By their calculation, they were being reimbursed $23 for a $79 office visit charge! Add in the overhead for the exam room (the national average was $30), and they discovered they were losing about $7 on each of the 75,000 patients they were seeing annually!
They could not cut overhead any further–they had been doing that for the past two years (cheaper photocopy paper, less-fancy patient info, fewer nurses, fewer receptionists, no more “pantry stocking,” and so on). They were running as lean as they could.
"Cash Only" Solution
In April 1998, they looked again at the $80,000-a-month loss, concluding they both were destined to be bankrupt in six months.
Looking around the country to see if they were alone in their struggle, they were alarmed to find doctors everywhere were beginning to file bankruptcy in increasing numbers.
They concluded that a new system was the only way they and many of their colleagues could possibly survive.
As they searched for solutions, it quickly became apparent that if people would pay them for their services at the time of service, they could immediately cut fees in half . . . and begin to get out of those ridiculous insurance contracts. They were either bad because they didn’t pay enough, bad because they created too much paperwork and bureaucracy, or bad because they set us up for a fraud/felony charge when “examining parties” didn’t agree with the way they coded something.
They re-explored the “cash only” concept by asking themselves, “How many health consumers in the U.S. represent the ‘cash-paying’ public?” The answer? At that time there were nearly 50 million Americans (1/5th of the country), uninsured, and most would be very willing to pay a reasonable fee for their care, if they could find doctors who would accept payment in full at the time of service. In 2020 that number was about 30 million uninsured Americans.
The AAPP and SimpleCare Was Born
It was with great pride that they founded a Washington State Non Profit Organization, The American Association of Patients and Providers and its primary program “SimpleCare”, based on the following premises:
- 100 percent patient-focused care
- No lists of who can and can’t see us
- No lists of what patients can and cannot have
- No confusing and changing CPT codes
- No insurance or patient billing
- 100 percent bureaucracy-free
- Hassle-free medicine!
The AAPP’s program SimpleCare is a “different animal”–no insurance billing, no extensive “document for the insurance company” chart notes, making HER use optional. Just real medicine, real time with patients, real money paid before the patient leaves the office, and patients charged based on a simple coding system each provider creates, for example, using Short, Medium, Long and Extended to define a type of office visit.
They developed SimpleCare from a clean slate, creating a common-sense, no-hassle system for seeing patients and getting reimbursed fairly, without penalizing patients who pay for their visit before leaving the office–just like most any other goods and services consumers buy.
They created a simple coding system: just three codes rather than the 7,500 +/- codes found in the CPT manual at that time. The CPT scheme was designed for billing; since they weren’t billing anyone, they didn’t need (and didn’t want) to use the overly complex CPT scheme.
One physician asked, “But is this legal?” We can’t tell you how many doctors think the CPT manual is a legal document; it’s not. It is nothing more than a joint venture between the American Medical Association and the Health Care Financing Administration (now the Centers for Medicare and Medicaid), for coding uniformity only.
Instead, We recommend charging a reasonable fee–without the paperwork costs–is assigned to specific procedures, lab work, x-rays, etc.
Many healthcare providers across the country have employed the AAPP’s program SimpleCare using their own modified fee structures offered only to AAPP/SimpleCare members. The AAPP does not tell providers what to charge for their respective procedures. Individual providers set their own fees and agree to take the AAPP/SimpleCare Pledge:
"I will give my patients, that pay in full at time of service, my best price."
If this common sense system sounds good to you, please consider joining the AAPP and enjoy the freedom of taking charge of your healthcare decisions both as a patient and a provider.