By MATTHEW HOLT AND CLAUDE
You’ll remember that a few weeks ago I gave Claude some pointers and my entire body of work on THCB and asked him to write an article. It was about 70% of my ideas and 50% of my writing tone. I’ll try again. This time I gave him a lot of pointers from some Linkedin articles and comments I wrote and then spent about 20 minutes editing it. This is about 85% of my idea and maybe 70% of my tone? I have rewritten something in each paragraph. But it’s much faster than writing from scratch. So I’m going to continue experimenting like this for a while.
This started as a LinkedIn post. The Center for American Progress’s new 10-point health reform plan is simply more incrementalism and, worse, too boring for anyone to pay attention to. Goozner’s own proposal, which limits out-of-pocket spending, isn’t much better. We’ve spent nearly a century proving that incremental reform in American health care isn’t working: We still have tens of millions uninsured, patients going out of business, and outcomes that lag behind most of the developed world. And of course, it allows speculators to extract massive wealth from the system. In other words, from us.
My alternative: go to the barricades and blow everything up. We need a revolution because modest evolution cannot work.
My proposal, which you should go read, is to give a primary care bonus to everyone, but make it concierge care for everyone.
The post received some criticism, and some of the objections reveal something important. My idea is not too complicated, but many of us are so imbued with our broken system that we cannot see beyond it. And to be fair, it was only after 35 years of watching it that I acquired the “burn it all” religion.
my basic idea
My proposal is Concierge Care for All. Each American receives a voucher worth between $2,000 and $3,000 a year, which they must spend at a primary care doctor (or primary care organization) of their choice. Each PCP or equivalent sees a panel of about 600 patients, about 1/3 to 1/4 of what a typical fee-for-service PCP practice handles today, and the same as most direct primary care practices today.
That’s between $1.2 and $1.8 million in annual revenue per doctor; enough to pay the doctor between $500,000 and $600,000 a year and still leave between $600,000 and $1.3 million for clinical staff, technology and overhead. This is basically the MDVIP model. Works. People who use it love it. And the latest studies show that it saves a lot (31%) on the use of hospital emergency rooms and on hospitalization costs. That alone saves a significant fraction of what this transition would cost.
Most of what a PCP does in this model is manage chronic diseases: diabetes, hypertension, heart disease, COPD. These are the conditions that drive most healthcare spending, but that our current system fails to manage. A well-resourced primary care practice, freed from the hamster wheel of volume-based billing, can do this proactively and can implement the technology to do it at scale. Remote patient monitoring, AI-assisted care management, continuous data from wearable and home devices – the tools that many digital health companies have proven to work well – all of that is integrated directly into primary care, where it belongs. The PCP organization is the buyer of these technological services. This is basically the logic behind CMS’s new ACCESS program, except that ACCESS attempts to build these capabilities into the system from the outside. In this model, they are integrated into primary care practice because the PCP wants to manage their patients and has the professional ethics and responsibility to do so.
I would include a lot of dental and mental health care in the definition of primary care, as well as minor urgent care. Many primary care groups in the United States and elsewhere do that now, although historically we have pretended that the head is not connected to the body and that the teeth are outside of it.
What does not exist is equally important. No copays, no coinsurance, no deductibles, no claims. There is no staff to take care of all that bureaucratic garbage. Your PCP manages your care, gets to know you, and refers you when you need a specialist, scan, or surgery.
What about specialized care?
Gary Levin asked the question: what do you do with specialty care? My answer is that specialists and hospitals operate on fixed global budgets, allocated by the government, the same way it works in most other countries. Of course, we are spending much more than them, so we will have better paid specialists and better treatment. We simply won’t have hospital executives paid like Cy Young-winning pitchers.
We will maintain existing organizations: academic medical centers, regional hospital systems, specialty practices. We will simply stop paying them per transaction and start funding them as institutions. Everyone gets paid. No one has any incentive to try too hard.
Importantly, no one has any incentive to deny care either. Specialists will compete for prestige and results, which are transparent to PCPs, who control referrals. Actually, that’s a healthy competitive dynamic, but not the one we have now.
But “Walk me through a claim”
Lori Block turned down funding and asked me to explain what happens when someone needs heart surgery. What happens with the claim? In a nutshell. There are no complaints
So if a PCP notices something related to your heart and it’s outside the scope of their practice, don’t forget what Bob Wachter says about AI making PCPs as smart as specialists: they refer you to a cardiologist via immediate telemedicine or send you directly for a scan. The specialist and imaging center, radiologist and others, operate with a regional budget for specialized care. The cardiologist orders images, consults with your PCP, and together with you determines that surgery is warranted. You go to a hospital and receive treatment, and then you are referred to whatever level of nursing care or home care you need.
By the way, most of this happens today and is already substantially funded by the government. The only difference is that there is no incentive for the hospital to pursue high-margin procedures and encourage their surgeons to perform more.
We are also saving money on administration. At no time does anyone send a bill to the patient. At no time does an insurance company’s utilization management team decide whether the procedure meets its “medical necessity” criteria. At no point does the patient find out six weeks later that the anesthesiologist was out of network. None of that back and forth that costs billions happens. The tens of billions we spend on RCM are not necessary.
There are no claims in this scenario because there is no claims-based system. There are only professionals, funded by global budgets, who make clinical decisions.
What about insurers and hospitals?
Lori also raised the boogeyman question: isn’t this just government-paid healthcare? Yes it is. But 70% of the major insurers’ revenues and almost all of their profits already come from the government. Medicare, Medicaid, ACA subsidies, etc. The same goes for large hospital systems, with a Byzantine system of federal subsidy. We are already paying for this.
Todd Guren directly raised the question of insurance risk: Who absorbs the $50 million claim if you ditch the insurers? The answer is: there are no $50 million claims in a system where hospitals and specialists operate on fixed budgets and cannot raise prices. Those numbers are an artifact of the current system. The federal government assumes the catastrophic risk, something it already does.
Do we have enough primary care doctors?
Jeff Goldsmith, a health futurist and the person who convinced me that value-based care doesn’t work and that we can trust doctors’ professional ethics, raised the most pointed objection: Where do PCPs come from? We need approximately 600,000 primary care doctors to analyze the entire country with 600 patients each. Now we have about 250,000. That’s a real gap, and 23% of current primary care physicians are already over 65, so the current number is declining.
But the solution is hiding in plain sight. There are about 100,000 to 150,000 doctors practicing internal medicine and emergency medicine who could transition to primary care without much friction. And there are 400,000 nurse practitioners in the United States, many of whom already work as primary care providers.
And, of course, many specialists who went into specialized medicine because that’s where the money is. Many of them will become PCPs when they discover they can earn $600,000 a year as a PCP, with a manageable panel, no insurance issues, and the ability to care for their patients’ overall health. Financial incentives created the labor distortion we have now. Financial incentives can solve this. Not to mention, we can change some rules about the interstate practice of medicine and give you better tools to manage your patients’ health. Not all specialists will stop being specialists and become generalists, but many will.
We have spent forty years demonstrating that incrementalism in American health policy has not worked. The American people know the system sucks. All we have to do is explain to them how we solved it by providing them with excellent concierge care.
Matthew Holt is the editor of THCB and Claude will soon create a world of abundance or end humanity. (Cross out where appropriate)