The Best of All Worlds

As a consultant, I spend a lot of time on airplanes and subsequently get to meet a new “person in the next seat” almost every week. Once the small talk is over, the conversation is nearly the same every time. “Oh, you work in healthcare! What do you think about all of this reform stuff anyway? Is there an answer?” I’m always very cautious how I frame my answer. As those of us who work in this world know, there is not AN answer so I am very careful not to endorse one model or the other, keeping the conversation turned toward the general nature of reform and the complexities it entails. 

Well today I am breaking my own rule. I want to talk about a model that just might work. I’m not sure if my inspiration was generated by the storms this weekend, making me feel a bit like the good Dr. Frankenstein, but I began to consider what a new model of care might look like if we took the best parts of some good models and built an entirely new “beast.” My thoughts are not entirely complete and your feedback is welcomed, but here goes….

The model is based on the following premises:

  • Some of the best and brightest physicians have become frustrated with the complexities of billing, the noise of paperwork, and the inability to care for an unmanageable number of patients to make ends meet. As these complexities worsen, more and more physicians will either leave practice, seek out a partner (read “hospital”) to accept the growing economic risk, or move to a model of “cash for care”.
  • A small number of the sickest patients consume a large share of available medical resources. In many of the new models proposed, safeguards are built in so that physicians don’t select these patients out of the care model as the risk for caring for them poses too great of a financial penalty.
  • Carrots work better than sticks.

So here is the plan. Why not pay the best and brightest physicians to care for the sickest patients as simply and effectively as humanly possible? Let’s take the best parts of a concierge model of care, throw in a bit of primary care medical home and a touch of Dr. Gawande’s hotspotting model and see what we get.

The model would work like this. Take a population of no more than 300-400 patients with at least one chronic disease as their primary diagnosis and assign them to one physician. This physician would be responsible for the care of those patients and those patients only. But rather than pay the physician through any type of complex, CPT driven payment mechanism, pay them cash. No billing, no coding, simply cash up front. Sound too much like capitation? Here would be the key difference. In a capitated model, it is assumed that too much care is given and the payments are designed to reflect the risk of managing care down to a certain level of payment and reimbursement. Physicians are motivated by avoidance of an undesired negative financial outcome. In this model, the assumption up front would be one of excellent care. Remember, only those physicians who have demonstrated that they are already the best of the best in caring for complex patients would be invited. Physicians would receive payments based on their continued provision of the highest quality care to patients - not just to avoid negative outcomes, but assure positive ones. Payments would be based on the assumption that at least one hospital admission for at least half of the patients would be avoided on an annual basis. Although current payment structures for hospital care are based primarily on the volume of admissions, this model will set the stage for a value based model of reimbursement that is likely represents the next iteration of hospital payments. If you assume that a hospital admission for a chronically ill patient can quickly add up to $10,000 or more, you would very easily have enough cash flow to run a practice.   In order to assure that excellent care was given, outcome based quality and cost metrics would be measured on all patients. There would be no “quality bonuses”. Quality care is assumed and paid for on the front end. As long as the highest quality is continually demonstrated, physicians would be allowed to continue practicing in this model.

So in the end here is what we get:

  • Patients who need the most care get focused attention from the best physicians leading to better outcomes of care than they can achieve in our current fragmented system.
  • Unnecessary care, in particular expensive hospital based care, is reduced, thus decreasing total costs to the system.
  • Physicians are rewarded (instead of penalized) for caring for complex patients with financial recognition, and by minimizing the administrative burdens inherent in practices currently.

As always, the devil on any idea like this is in the details, but if we are to come up with meaningful solutions we may need to develop a tolerance for living out here closer to the edge of creativity, avoiding the gravitational pull of current thought and the status quo.

.....And Now for Something Completely Different

Last week the healthcare world was all abuzz. The federal government was set to begin the journey that every player in the marketplace has been waiting for, the road to the accountable care organization. Over 300 industry leaders gathered in Baltimore to hear just how this was going to occur, to hear the “new normal.”  Well… that’s not exactly what was heard. Although there were some mentions of changes to safe harbors and inclusion of all players, not a lot of new and different ideas were shared. While following those who were live tweeting the event, comments like “ an ACO a PHO without the H?” and “Without antitrust legislation, we’ll have only large hospital networks remaining..”  and even “..capitation is on the horizon” were the norm of the conversation.

The closer we get to implementation of this “new” model, the more similar it appears to ideas that have been tried (and failed) before. It seems we have not yet developed the appetite for a model that is new and truly different.

Apple’s iPad has been out for less than a year.   It is anticipated that within the year it will have its own category of electronics, and will outsell netbooks by a large margin within the next two years. The iPad was expected to do well, but not this well. The iPad, like healthcare reform, was promoted as something new and truly different. But the iPad was not only new and different, it was also better for the customer…at least at some things. It made doing things that customers truly wanted to do (get information fast) better and easier, even at the cost of not being as good at others (word processing, gaming, etc.).

In an article in Kaiser Health News this morning, the author outlines how many industry players are lining up to make ACO’s work – not for the patient, our customers, but for them, the providers of services. These industry insiders all seem to be afraid of what they might have to give up under this new model of care, and are looking to make sure they maximize their own gains. There may be a lesson for us to learn from our friends at Apple. If we truly want to improve our model of care, we are going to need to give some things up. Everything cannot stay the same with different titles. Different for the sake of different is not going to cut it either. If healthcare is truly going to be reformed, we need to come up with both “different” and “better” – for the providers AND for the patients. So the question remains, does the highly publicized and government-endorsed accountable care organization meet these standards? Based on those attending the listening sessions this past week, I’m afraid the jury is still out.