Insight:  The Cure for Health Inflation,  A New Set of Relationships, Direct Cash Primary Care Physicians Now in the Middle of the Muddle

I embrace the common,  I explore and sit at the feet of the familiar, the low. Give me insight into  to-day, and you may have the antique and future worlds.

Ralph Waldo Emerson (1803-1882), Nature (1836,1849)

As I was reading my interview posted yesterday  with Josh Umbrecht, a concierge physician in Wichita, Kansas,  a thunderbolt insight hit me:  the cure for health inflation is a new set of relationships  from the bottom-up, not the top-down. 

Let me explain.

What is the scourge of U.S. health care?  

 Inflation.  It’s eating the national budget alive.  It’s the driving force behind health reform and ObamaCare.  ObamaCare is a top-down government  solution with 2 main aims -  universal coverage and lower costs. So far, it is failing on both counts.

What the current sets of relationships, from bottom to top?

·         Patients and doctors

·         Doctors and hospitals

·         Doctors and health plans

·         Health plans, employers, and workers

·         Government and health plans

And what is the current nature of these relationships?

·         Patients and doctors – complicated and growing apart, with frequent 3^rd party intervention into what and how much to pay,  and what is and what is not legitimate.  For whatever reason,  premiums and deductibles  and other costs are rising.

·         Doctors and hospitals -   more than half of primary care doctors,  confronted by lower reimbursements and higher practice expenses, including malpractice expenses,  have entered hospital employment.

·         Doctors and health plans -   health plans,  by  managing  , documenting,  and controlling care,  hope to minimize what it  pays doctors.   Doctor costs are rising as they seek to comply with health plan rules by trying to cope with byzantine coding systems.

·         Health plans, employers, and workers -  employers, through health plans,  cover 160 million workers, and will be required to cover more under ObamaCare.  Employer costs are going up as government rules mount.

·         Government and health plans -  government, to extend access and control costs, is driving up expenses of health plans by forcing them to cover those with pre-existing illness and under parents’ plans and to offer standardized plans covering 10 essential benefits.

Many of these relationships tend to be testy,  and most of them drive up costs.

What is the insight revealed in the interview? 

Simply this:   Change the relationships, i.e. the business model, and you change the whole system.

·         Primary care physicians, by offering  insurance-free services ( physical exams, simple procedures (skin biopsies, joint injections,  lab tests, EKGs,  and so forth),  wholesale generic drugs,  and  24/7 access to their practices, for a fixed monthly fee  can lower their overall health costs by becoming more productive, spending time with patients rather than coding and hassling with insurers, and wrestling with the demands of the new ICD-10 coding system and data entry into electronic health records systems.

·         Primary care physicians can strike up new and more amicable relationships with patients ( relieving them of the anxiety of paying  for routine services and for expensive brand-name drugs),  with employers and health plans (by meeting with them and negotiating lower premiums and deductibles  while eliminating  the need for elaborate coding systems requiring additional personnel  to monitor and enforce).

·         Primary care physicians can simplify their relationships with hospitals by practicing independently and referring their patients to hospitalists rather than being employed by hospitals.

·         Government, health plans, and employers can now concentrate on the  fastest growing area of  health costs   - the  often unaffordable catastrophic  costs of hospital and specialty care, often procedurally related ,  for chronic illnesses in  an aging  population.

Tweet:   Direct pay, insurance-free, primary care changes relationships of the various health care participants and lowers overall health costs.