I’ve read several posts today on so called “Value-based payment” strategies and I couldn’t resist adding my 2-cents.
VBP can’t fix these fundamental problems because it is still based on a price-opaque shell game I like to call Fee-for-Coding, which results in:
1) Price insensitivity on the utilizer’s part.
2) Misaligned incentives on the provider’s part.
3) Lack of important price signals between buyers and sellers due to lack of advance pricing capabilities.
VBP utilizes the same fundamentally flawed economic system as our current billing model.
Moving to value-based care will require…
1) A system where prices are known in advance of care (not trauma or emergency care where extent of injuries or illness are unknown at onset – but even still a lot of those can be estimated ahead of time based on scenarios).
2) …that physicians be paid to be available to solve our problems, where payment is not tied to documenting work in a chart.
3) …that we move to a system that is based on defined contributions as opposed to defined benefits. As John C. Goodman is fond of saying, “money should follow people”, not programs and insurance policies.
Value will be elusive until we let the discipline of the market work in healthcare.
This whole issue of “surprise bills” is a symptom of a more pernicious economic disease which has been driving prices in healthcare for decades; that being, a lack on discoverable, actionable meaningful prices for bundled medical services.
Moreover, the lack of transparent/actionable pricing in healthcare is a derivative of the manner in which we have chosen to code, bill and get paid for medical services.
And most of the legislative and regulatory fixes proposed do NOT correct the core problem.
The corollary being, there are no surprise bills when we use real honest pricing strategies!
Dr. Keith Smith and Dr. Steve Lantier
Case in point…you will never have a surprise bill from Surgery Center Of Oklahoma. They publish easily discoverable all-inclusive prices for their surgical procedures. And, they offer same price to any willing buyer, because they aren’t controlled by network contracts.
Price setting or caps is not the correct response to the problem of this form of price gouging. This knee jerk visceral reaction is shortsighted. Price setting ALWAYS distorts markets in negative ways which are not always apparent; shortages or supply chain inefficiencies/interruptions/gaps are inevitable.
It is NOT the cost of medical care & and pharma that is the problem…It is the simultaneous lack of both transparent & actionable prices, combined with using proprietary contractual formulary agreements as a substitute for honest pricing, which has brought us to this dangerous fiscal precipice. Hiding costs by shifting them or redistributing them is same economically illiterate strategy which brought us Obamacare.
For the past year I have grown increasingly frustrated as our health care system has valued payer over patient, time and time again. Even our hospital administrators seem immune to care and compassion – the bedrock of my practice. My mission is to provide each patient with the right care, to the best of my abilities.
I want to be a resource to the pioneering group of practitioners (Direct Primary Care) who stepped out of the constraints of our current system to deliver care we all want to receive. We are trying to put the soul of health care back into the patient-physician relationship. At this time, we feel insurance companies increase friction and raise the cost of care.
~ Avinesh Bhar, MD MBA
Services include:
Initial video consults (either from the patients home or the referring practice using a smartphone and desktop)
Follow up (video)
Follow up (text):
I am offering this service to provide patients the flexibility of communicating directly with their physician without the formality of video.
Home Sleep Testing (HST): to include interpretation and physical copy of report.
I am setting up a DME company to ensure I can provide patients a cost effective and efficient care continuum for their pulmonary and sleep needs.
Dr. Bhar goes on to say, “My hope is to set up an efficient workflow to facilitate communication and follow up with DPC practices and patients. Through my website https://www.sliiip.com/ I provide video consultations (for first time visits and for complex follow ups) along with text messages (through a third party HIPAA compliant partner) for simple follow ups, medication refills and results notification.
I am currently licensed in GA and SC. I am also available for curbside consults to providers.
“I am often asked if the free market can work in health care. My quick reply is: That is the only thing that works. At least, it is the only thing that works well.
Show me a health care market where there is no Blue Cross, no Medicare and no employer. I’ll bet it’s a market that works a lot like the markets for other goods and services.
In Overcharged: Why Americans Pay Too Much for Health Care (Cato: 2018), law professors Charles Silver and David Hyman make this same point in spades.
After several decades of trying everything from managed care to value-based purchasing, employers need to sit up and take note. The authors say the only thing that really holds down costs is giving money to the employees and letting them buy their own health care. “There is no health care cost crisis in the retail sector,” they write, and there “never has been.”
Atlas MD in Wichita, Kansas, for example, provides just about every service you can get at a primary care doctor’s office for $50 to $75 a month for adults (depending on age) and $10 for a child. Doctors are available by phone or email 24/7. Drugs cost less than what Medicaid pays. Medical tests are cheap. A cholesterol test is $3, a tiny fraction of the charge that the lab they deal with bills to insurers. An MRI scan costs $400 instead of the typical third party charge of $2,000.
What about expensive hospital care? That too can look like retail medicine if you know where to look. The Surgery Center of Oklahoma (SOC), founded by Drs. Keith Smith and Steve Lantier, posts prices for 112 common surgical procedures. They deal mostly in cash and they don’t take Medicare or Medicaid or negotiate prices with insurance companies. One of SOC’s competitors is Integris Baptist Medical Center in Oklahoma City. The contrast couldn’t be starker, as the authors note:
Integris charged $33,505 for a complex bilateral sinus procedure, which helps patients with chronic nasal infections. This bill covered only hospitalization; the fees for the surgeon and the anesthesiologist were extra. At SOC, the all-inclusive price for the same operation is $5,885. Not surprisingly, Integris’s bill was loaded with overcharges, including $360 for a steroid available at wholesale for just 75 cents, and $630 for three doses of a pain killer called fentanyl citrate, which altogether cost the hospital about $1.50.”
New developments in retail medicine are almost always the product of entrepreneurial thinking. Sometimes the entrepreneurs are medical doctors. Sometimes they are business types with a strong interest in eliminating the many inefficiencies in traditional health care.”
“For example,the AMA complainsthat hundreds of millions would be atrisk of losing “coverage.” In fact,only a net 1.7 million people gained private coverageunder ACA, after subtracting the nearly 6 million who lost it, at a shocking cost of $341 billion or $200,000 per newly insured person. Most of the claimed increased coverage came from expanding Medicaid to childless, able-bodied adults.This reduced access to services by the sickest patients, and at least 21,904 patients died on Medicaid waiting listsaccording to a 2018 report.
Without ACA and its unaffordable requirements, Americans would have many more options to buy affordable insurance. Instead of paying as much as a mortgage payment for “coverage” they are unlikely to use, they might join a DPC (direct primary care) practiceand get preventive care and routine medical treatment for at as little as $50/month. They might buy catastrophes-only major medical insurance that ACA outlaws for persons over 30 years of age. Congress might enactHealth Freedom Accounts as proposed by Rep. Chip Roy(R-Tex.) and liberalize Health Reimbursement Accounts.”
Astudy by Charles Blahousat the Mercatus Center estimates that Medicare for all would cost $32.6 trillion over the next ten years. Other studies have been in the same ballpark and they imply that we would need a 25% payroll tax. And that assumes that doctors and hospitals provide the same amount of care they provide today, even though they would be paid Medicare rates, which are about 40% below what private insurance has been paying. Without those cuts in provider payments, the needed payroll tax would be closer to 30%.
Of course, there would be savings on the other side of the ledger. People would no longer have to pay private insurance premiums and out-of-pocket fees. In fact, for the country as a whole this would largely be a financial wash – a huge substitution of public payment for private payment.
But remember, in today’s world how much you and your employer spend on health care is up to you and your employer. If the cost is too high, you can choose to jettison benefits of marginal value and be more choosey about the doctors and hospitals in your plan’s network. You could also take advantage of medical tourism (traveling to other cities where the costs are lower and the quality is higher) and phone, email and other telemedical innovations described above. The premiums you pay today are voluntary and (absent Obamacare mandates) what you buy with those premiums is a choice you and your employer are free to make.
With Medicare for all, you would have virtually no say in how costs are controlled other than the fact that you would be one of several hundred million potential voters.
Remember also thatthere is a reason why Obamacare is such a mess.The Democrats in Congress convened special interests around a figurative table – the drug companies, the insurance companies, the doctors, the hospitals, the device manufacturers, big business, big labor, etc. – and gave each a piece of the Obamacare pie in order to buy their political support.
As we show below, every single issue Obamacare had to contend with would be front and center in any plan to replace Obamacare with Medicare for all. So, the Democrats who gave us the last health care reform would be dealing with the same issues and the same special interests the second time around.
It takes a great deal of faith to believe there would be much improvement.
“One can spend hours on the phone tracking down the billing department only to hear from a lamenting administrator that they can’t share the negotiated price until after the procedure is performed. Then, weeks after the episode of care is over, an individual receives an outrageous bill in the mail that supposedly takes into account the “discount” for using an in-network doctor.
There’s no question that these convoluted pricing and payment schemes have contributed to higher health care costs and health insurance premiums. When consumers are kept in the dark, many providers can continue to increase prices simply because they can.
Price transparency is long overdue. Fortunately, some Oklahomans have been shaking things up in the health care industry long before President Trump’s promising executive order. For over a decade, Dr. Smith, co-managing partner at the Surgery Center of Oklahoma, has been leading the nation in true price transparency in his outpatient facility in Oklahoma City.”
Our Rights come from God, not government. Physician/ Patient/ Survivor/ Wife/ Mother of 4 daughters/ Small biz owner/ Limited Government/ No Socialized Medicine/ Texan/ President www.AAPSonline.org
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