A Model That Works
There is a model that has been in place in the U.S. for over ten years, but only in very remote corners of the country and on very small scales. There is a provision in the Affordable Care Act allowing this model to become eligible for state and federal healthcare exchanges. In fact, the Centers for Medicare and Medicaid are exploring this model…courtesy of the $4.2 billion allocated under the Affordable Care Act for a Healthcare Innovation Committee…and have already begun a pilot study. Over the next 2 – 10 years, this model will grow rapidly across the country.
The Driver: Quality. In this model, success is measured through customer retention, not through volume of patient visits.
The Method: Provide patients high quality through investment of time, with a wellness and preventive care approach to traditional medicine in a proactive clinical model.
The Incentive: Deliver high quality to get you healthy, keep you healthy, and keep you productive…at home, at work, and at school…and out of the doctor’s office. Not only will we treat diseases, we will also attack the causes of diseases and educate and empower you to attack them also. We want you so healthy and disease resistant that you don’t need to come and see us, unlike traditional primary care practices that simply try to control your symptoms.
Higher Quality for Less Than Half the Cost?
The Health Insurance industry does not function like insurance in primary care. Rather, it becomes a service-delivery/payment-for-service mediator. Let’s examine a peer industry…
It is very likely that you have auto insurance. Why?
Answer: To cover your RISK of large, unexpected out-of-pocket expense resulting from a collision. On average, we pay $65 per month per car for auto insurance. Your risk of filing an auto insurance claim this year is 2.1%.
Do you file an auto insurance claim to replace a tire or rebuild your transmission? Do you file an auto insurance claim to change your oil or fill up with gasoline?
Answer: Of course not, and to imagine doing so seems ridiculous.
Can you imagine the complexity of your life and the inflated costs of auto insurance if this were the case?
This model, one in which insurance administration encompasses the entirety of service utilization, is exactly what occurs in healthcare today.
Why does healthcare cost so much?
Answer: 1) The costs of administrating high utilization of low cost services in primary care inflates the costs of insurance companies to operate. This would be the same as filing auto insurance claims for changing your oil…
…2) the high costs of major medical services typically utilized at the end of life spread across an all- inclusive risk pool of consumers. The high shift in utilization from primary care to major medical and specialty services is partly caused by the poor quality of primary care services.
The Franklin Medical Center AGHEALTH Program offers a model of healthcare called Direct Primary Care. Imagine your healthcare utilization and proportional costs as being similar to the auto industry:
As you age, or if you develop chronic conditions such as diabetes, you may need to increase the amount of insurance coverage that you purchase. However, as long as basic services are not included under insurance administration, the cost savings can be significant.
Forty cents of every one dollar spent in healthcare is spent on the insurance administration process. This does not include costs associated with fraud, abuse, or errors. The total amount is actually closer to sixty cents per dollar.
That is 60% of healthcare costs that can be converted into savings for you and your provider.