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.
My last several posts have been, shall we say, a bit on the frustrated side, so I’ve decided today to change my approach and embrace my inner optimist. Rather than lament the challenges surrounding us as we all swim our way through the muck and mire of healthcare reform, I have resolved to focus on the positive and share some of the new care models that are being tried by some very innovative folks. To be sure, these ideas are not what has been in the mainstream press and not one of them has the momentum of ACO’s, but I believe there are some real pearls in each of them. This list is not complete by any stretch and I would love to hear about others that I might have missed.
As all of us who work in healthcare know, we are all swinging for the fences to hit the home run of 
The outlook for Medicare has improved substantially, or at least 
Now, maybe I shouldn’t have been so surprised. Healthcare is, after all, supposed to be about the patients we care for. My curiosity piqued, I looked at our new law, the PATIENT protection and affordable care act to see how our focus on patients compared. The proposed law in Great Britain is very direct – “The Government’s ambition is to achieve healthcare outcomes that are among the best in the world. This can only be realized by involving patients fully in their own care.” They have dedicated the first section of their new law to ways for the patient to lead his or her own care and focus on shared decision making.
As a father of three teenage boys, my life is rarely dull. Their insights and slant on most things are generally entertaining to say the least. Last night as I was sitting at my dinner table, my 16 year old son caught my attention. “Dad, the folks who make video games have got it figured out. They are marketing geniuses. They must be rolling in money.” Curious, I asked what he meant. He went on to share with me that on his new gaming system, there was a small avatar that sat in the lower right hand corner of the screen. According to my son, this avatar had no purpose whatsoever. It was not part of the game. It didn’t even move. It just sat there and blinked. The gaming company, it seems, has developed a system of buying “points” as imaginary money and with this money you can customize and dress your avatar in any way you wish. My son, perplexed by this, said “Dad, why would anyone buy something that has absolutely no value?”
There is no doubt that cost control will be a major component of efforts to overhaul the current healthcare system. These efforts are now only vaguely spelled out in the Patient Protection and Affordable Care Act (PPACA) and include such approaches as the development of 
Risks are inherent in any invasive procedure. But the incidence of hospital-acquired sepsis and pneumonia are preventable and manageable. Without doing so, the costs are extraordinary. For example, Healthcare Financial Management Magazine recently reported that 
