Performance Management / HR

Part 3: Achieving More Time with Your Primary Care Physician

This is Part 3 of a 4 part series by Stephen C Schimpff, MD covering the important topic of Healthcare in the US, that will be available each Friday in the month of June.

PCPs in private practices realize that they are currently in a non-sustainable business model and are in a production-intense environment seeing 24 or more patients per day from a panel size of 2500 or more. Combined, this prevents them from granting the patient the time needed for listening, thinking, preventing and coordinating. They are frustrated, tired, burned out and see that insurers, in general, have tied their hands with flat reimbursements yet they have rising office/overhead costs. They also realize that their patients are frustrated as well. Many are looking for an innovative way to return to a practice format with fewer patients under care thereby allowing for much greater quality care yet maintaining a reasonable income.

Doctor and PatientWhat many PCPs have decided is that it is time to no longer “tinker” with the current payment system but to simply exit from it entirely and create a new approach that will offer more effective prevention combined with health and wellness management in addition to coordinated chronic disease management along with the usual care of episodic events. This is the pathway to improved health, improved quality, reduced costs overall and improved patient and provider satisfaction.

The most effective transformations to date are those initiated by primary care physicians (PCPs) themselves. These are broadly termed direct primary care and have subtypes of direct pay (pay at the door) or membership and retainer-based (concierge), each with multiple variations. In each the patient pays the PCP directly. The patient becomes the customer/client of the physician – a professional contractual relationship without the intermediary of the insurance company. About 1% of PCPs are switching to some form of direct primary care practices each year with about 7% currently in these types of practices.

Direct pay practices are essentially a return to the past. Typically, the doctor refuses all insurance and expects the patient to pay a fee at each visit – “pay at the door.” Doctors who use this model can charge a reduced amount and still earn a good income but often continue to have a panel of 2500 plus patients. This means that they are saving the administrative costs but are still seeing too many patients per day to give the highest level of quality.

If the PCP is to actually reduce the workload such that there is ample time to give quality care, there needs to be fewer total patients under care. Increasing the visit fee while reducing the number of patients seen per day is one approach.

Another is the membership/retainer/concierge model. Here the patient pays a fee to the PCP on a monthly, quarterly or annual basis. These fees range from about $40 per month ($480 annually) to about $165 per month ($2000 annually). This is a form of capitation but with the patient not the insurer being the customer. With the lower rates the PCP tends to reduce the panel size to about 700-1000 and at the upper fee end, the panel size tends to be about 450-600.

The PCP gives each patient whatever time is necessary for their care, including office visits within 24 hours of a call, visiting the patient in the emergency room, hospital or nursing home; use of email and 24/7 access via the doctor’s personal cell phone. The more expensive plans generally include an extensive annual evaluation and many laboratory tests.

Often thought of as for the elite, the rich or the 1%, in fact the lower level plans are actually “blue collar.” They are affordable by many and in some locales the PCPs find that most of their patients are among the uninsured. Many direct primary care physicians make arrangements with laboratories to do testing at greatly reduced rates in return for immediate payment. And some PCPs purchase common generic medications at wholesale rates and make them available to their patients for free or at cost. Often the savings on medications for those with chronic illnesses is more than enough to cover the membership fee.

Today, primary care accounts for about 5% of total health care expenditures. Direct primary care increases total primary care costs to perhaps 7-8% but with consequent significant reductions in the overall costs. But most important is the increase in quality while reducing patient and physician frustration.

Next time – Part 4: What Can a Small Company Do To Reduce Its Health Care Costs?

 stephen schimpff book coverStephen C Schimpff, MD is a quasi-retired internist, professor of medicine and public policy, former CEO of the University of Maryland Medical Center, senior advisor to Sage Growth Partners and is the author of The Future of Health Care Delivery- Why It Must Change and How It Will Affect You

Category: Performance Management / HR

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About the Author: Stephen Schimpff

Stephen C Schimpff, MD is an internist, professor of medicine and public policy, former CEO of the University of Maryland Medical Center, chair of the Sanovas, Inc. advisory board, senior advisor at Sage Growth Partners and is the author of …

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