Chris and Jay discuss novel ways of implementing employee benefits, why there are barriers to change, and the upcoming FMMA conference.
The old aphorism is true, leopards don’t change their spots!
For these three entities that oppose the new HHS price transparency rules, and for many others to be sure, there is no incentive to hold down healthcare care costs. In fact, the incentives of the current system of healthcare financing are such that it’s in their favor for prices to always go up.
In all cases, whether it be a percentage of claim cost, percentage of premium or percent of discount margin, these same price-hiding crony pals continue to benefit financially when the price of medical care rises.
In a typical insurance-based practice, meaningful face-to-face time between doctor and patient is somewhere between 5-10 minutes. Interesting, but surprisingly, shorter visits tended to result in more prescriptions being written and less time trying to get to the root of clinical problems. And prescribing is usually a poor surrogate for good counsel and reassurance.
“What do you get when you mix low overhead with high technology and wrap it around an excellent physician-patient relationship? You get an ideal medical practice – a practice model designed to enhance doctor-patient relationships, increase face-to-face time between doctors and patients, reduce physician workloads, instill patients with a sense of responsibility for their health and cut wasted dollars from the entire system.”
The quote above is NOT from a Direct pay doctor or advocate, even though it precisely describes the attributes of DPC. The quote is from the American Association of Family Physicians: The Ideal Medical Practice Model: Improving Efficiency, Quality and the Doctor-Patient Relationship.
Notice how many of the characteristics of the Ideal Medical Practice looks very similar to the characteristics of a typical Direct Primary Care practice. The ability to provide exemplary service is a natural element that arises from Direct Primary Care and other direct-pay models.
This direct engagement, absent the complexities and barriers created by the third-party network billing apparatus, enables a level of lifestyle-friendly involvement that naturally leads to a more satisfactory patient-doctor relationship and potentially superior clinical outcomes.
It’s hard to argue with cheaper and better.
“…it is important for employers to be fully aware of what the regulations may impact them to safeguard against inadvertently putting themselves, or their employees, in an untenable situation.
It is important for an employer looking to offer an unconventional or untraditional benefit package to speak with an independent health plan attorney or CPA (not employed by the agency selling the program) regarding potential liability and compliance with federal and state laws regarding employer sponsored health plans.
Can your employee afford to reimburse the IRS for taxes not collected on an inappropriately structured HSA? Can your business afford a fine of $100 per day per employee for every day that the unqualified arrangement was offered? These are just some of the potential liabilities.”
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. The savings can be substantial even after accounting for membership costs.
The Pillars of the FMMA were created due to the wildly varying definitions of free market and transparency. As this movement grows, many want to utilize the work of the true free market warriors to create new programs, products, and schemes that are not truly free market, or transparent. All members agree to abide by the literal definition of the Pillars, and the spirit and intent in which they were created.
These names are, in many ways, synonymous with the current free market movement, and for good reason. These men are the mavericks of healthcare. When Dr. Smith and Mr. Kempton were introduced in 2011 by a mutual friend and client, they had no way of knowing that their partnership would become what it is today and create an entire movement in the healthcare space.
Jay Kempton: When you understand how this business really works, you can see the effect of the dysfunction which I just described; but when you learn more about the cause, you can see that the patients’ actual financial concern is not even on the radar of so many entities that are part of big healthcare. Hospitals really do not understand that the gouging of pricing that they do trickles down into basically wage stagnation to employees. They say, “We’re raising our prices, but it only hurts the big insurance companies.” No, that’s never the way it works. It eventually makes it way as an increased cost to the employer. They can’t afford to just absorb the increase, so how do they offset that? By lowering or decreasing the increase of wages or they reduce the benefits, or both.
What is the greatest obstacle that this movement and the FMMA faces?
Dr. Keith Smith: The answer may be counterintuitive. I think the greatest obstacle the FMMA and this movement faces is ourselves. We are so programmed and conditioned to look to outside leaders or to the government for solutions and answers. They are ultimately responsible for all the problems that have led to our current system. The answer is looking to ourselves and having the courage to face the possibility that, in innumerable ways, we have been duped. Admitting that is a very personal and difficult experience for many people—to look in the mirror and acknowledge that they’ve been lied to. Even worse, we have believed these lies and have acted accordingly. People must acknowledge that it is a ground up movement, not one where solutions rain down on us from our rulers or our leaders. They must do their own thinking and not allow those who would like to be protected from innovation to stop us.
Jay Kempton: The obstacle that’s not so benign is how people in the healthcare business get paid. Brokers, consultants, and agents have tremendous influence over employers and patients, and the way that they see healthcare. Many people in the employee benefits business get paid when they make money off the problem. In other words, they’re making a percentage of the healthcare spend. The problem gets bigger, their income goes up.
If you could tell someone just one thing about the free market in healthcare what would it be?
Dr. Keith Smith: The one thing I would tell them is that the free market is not about sellers having their way with consumers. The free market is not about brutalizing the poor, or people who are trying to pay for their own care.
The free market is about an exchange between buyers and sellers that is mutually beneficial, where both parties emerge feeling like it was a good exchange. Any time that the media quotes some corporate healthcare exec or politician bemoaning the tough future that one of the sellers might face given some policy that might be enacted should be discounted or ignored. The focus has to be on the consumer, and on whether a consumer’s decision to buy A or B is a value to that person. The one message that I would give is to know that this movement is about servicing consumers. Period. Any concerns or desires that sellers have to be protected from the preferences of consumers must be seen as the source of the problem that we all face in health care today.
Jay Kempton: The free market and healthcare is the only true healthcare reform that has a chance of being sustainable. Anything else is just rearranging the deck chairs on the Titanic.