Chris and Jay discuss novel ways of implementing employee benefits, why there are barriers to change, and the upcoming FMMA conference.
Having quick access to a primary care doctor 24/7 is very appealing to Mick Lowderman, 56, who is married with two children, ages 10 and 8. He pays a monthly membership fee to AtlasMD, a direct primary care practice in Wichita, KS.
Primary care is built on the long-term relationship between clinicians and patients. A 10- to 15-minute patient visit doesn’t support that relationship, Sullivan says.
When Kevin Boyd, 64, fell on his stairs in Wichita and broke three ribs, he didn’t go the emergency room. Instead, he called Umbehr, who told him to come to his office. He referred Boyd nearby for an X-ray and dispensed pain medications at his office. The total cost was $70.
In contrast, the first time Boyd fell and broke his ribs, he had Blue Cross Blue Shield and drove himself to the ER, where he saw the ER doctor, a radiologist for an MRI, and got shots for his pain. The total bill was $14,000, and he paid $2,600.
“I don’t put off care the way I used to because of the money I save,” says Boyd, who joined AtlasMD in 2015.For his monthly membership fee of $75, Boyd gets several benefits, including unlimited 24/7 access to Umbehr by text, email, or phone, extended same- or next-day office visits, and free diagnostic tests and office procedures, such as EKGs, DEXA scans, and body fat analysis. If Boyd gets really sick and needs a house call, or if he needs a phone consult when traveling, those are also included in the fee.
They struggle to fill prescriptions, give flu shots, tend the drive-through, answer phones, work the register, counsel patients and call doctors and insurance companies, they said — all the while racing to meet corporate performance metrics that they characterized as unreasonable and unsafe in an industry squeezed to do more with less.
“The amount of busywork we must do while verifying prescriptions is absolutely dangerous,” another wrote to the Pennsylvania board in February. “Mistakes are going to be made and the patients are going to be the ones suffering.”
Jay Wolfson, PhD, a health policy expert at the University of South Florida in Tampa, said this case “goes to the heart of physician clinical autonomy.”
By Robert Nelson, MD
Our health insurance-based third-party payer protocols have pernicious and nefarious economic consequences on the cost of medical care; and in many ways has diminished access due to regulatory complexities that accompany these interventions.
The undeniable result continues to be a rampant increase in healthcare prices, which is catalyzed by the economic distortions of the 3rd party payer effect and perpetuated by the price-obscuring distortions of the CPT billing cycle.
We have taken the concept of insurance, designed to pay out rare higher-priced claims on unpredictable events, and turned it into a product whose design promotes an incentive for everyone to use it as often as possible.
Insurance is sustainable only when the financial risks of individually rare events are spread over a large population. When it also becomes a funding source for anticipated and affordable events, combined with a perverse incentive to utilize it to the margin, the result is the creation of a perpetual payout fund.
The costs of sustaining this model are never satisfied, being squeezed by patients who are chasing the benefits and providers who chase the billing codes to achieve maximal reimbursement.
As evidence for the negative consequence of misusing insurance as a pass-through system for virtually every healthcare expense (accelerated by passage of the ACA), we can examine the employer-sponsored group market premiums.
From 2007 – 2017 the average premium for family coverage increased by 55% and employee contribution rate as a share of premium cost increased by 74% over the same 10-year period; while median household income went up by only 3%.
To add financial injury to insult, the percentage of employees with an out-of-pocket maximum of greater than $3,000 doubled, going from 30% to 60% of employees.
“Eighty-one percent of covered workers have a general annual deductible for single coverage that must be met before most services are paid for by the plan. Among covered workers with a general annual deductible, the average deductible amount for single coverage is $1,505.” ~KFF.org
Between 2012 – 2017, the percentage of covered workers with a general annual deductible of $1,000 or more for single coverage has grown substantially, increasing from 34% in 2012 to 51% in 2017. Thirty-seven percent of covered workers in small firms are in a plan with a deductible of at least $2,000, compared to 15% for covered workers in large firms.
In the ACA individual market insurance exchanges, single coverage premiums (unsubsidized) increased by 62% and family coverage premiums increased by 75% just since implementation of ObamaCare!
Our third-party payer system has created a dependency paradox!
The same funding method that contributes to runaway costs also causes us to be more dependent on it for access. This guarantees that Healthcare will cost significantly more than the sum of its individual parts, and will continue to escalate faster than our ability to pay for it.
The costs associated with health plan premiums (aka insurance) have become a surrogate for health-care costs.
Now let that sink in!
In what other market does the cost of an insurance product act as substitute for the aggregate cost of the product or services that it insures?
Now apply a similar scenario to the auto insurance market. It doesn’t take much imagination to extrapolate how that would play out. But if you want some help visualizing the scenario, here’s a brief vignette. https://lnkd.in/eUGeCKv
Self-insured employer health plans are in a unique position to break out of this dependency paradox.
By contracting with a Direct Primary Care practice and re-routing subsequent encounters away from the more expensive insurance-based protocols, Self-insured employers can utilize creative plan designs to cut costs and improve employee satisfaction.
Data from the Qliance experience, and supported by other self-insured employer’s experiences, utilization of efficient primary care via the DPC model reduces unnecessary downstream care by approximately 50%, with the resultant aggregate cost savings of nearly 20%.
The caveat being, as we double the number of primary care visits combined with longer visits to adequately address problems, the need for emergent visits, ER visits and specialty intervention drop significantly.
A similar level of savings for direct-pay lab tests was noted in data published in 2014 by CMT journal comparing lab fees charged to a Direct Pay practice by the lab vs. the CPT billed charges by the lab (assuming patient had no coverage or had not met their deductible). For five common blood tests the savings was 89% by not using insurance, with lab billed charges of approximately $782 compared to a direct pay cost of $80. Plum Health, a direct primary care practice in Detroit, shows similarly impressive lab test savings of 87% on six common blood tests; $811 vs $106.
Many Self-insured companies are beginning to discover the value and savings in this approach, while breaking free of the coverage trap and the myth that health insurance equates to health care; and the realization that so-called “access” to inflated pricing and the phony discounts used to fleece the buyer is no longer a conversation they are willing to have.
Implicit in the mission of this blog is to support independent professionals, not just medical professionals, and the unencumbered ability to pursue their chosen profession; and to do so without excess gov’t restrictions.
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.