Forget Health Care Reform, We Need a Health Care Transformation
Does the current health care reform debate sound like a broken record to you? U.S. spending on health care is $2.6 trillion -- 17% of GDP and headed toward 20% without a dramatic fix. Yet not one radically new idea has been proposed to fix the current system. The health care system is so far gone we don't need reform -- we need a disruptive business transformation.
In Washington State disruptive and transformative business models are our bread and butter. Think: Amazon, Costco, Starbucks, aQuantive, Expedia, Zillow - the list goes on. It is this kind of thinking that will uncover a better way to deliver health care to every American for less money than we spend today with 46 million uninsured. We need to do what Costco did for retailing, what Amazon did for the Internet, and what Expedia did for travel.
Washington State already has the disruptive business model that will fix health care. It will ensure that every American has access to quality, affordable health care that allows for one-on-one access to a primary care doctor who can spend more time to fix what ails you on a timely basis.
It's called direct primary care. These practices are not to be confused with pricey concierge practices that also take insurance. Direct primary care practices in Washington State replace insurance with membership fees ranging from $39 to $79 per month, depending on age, for unrestricted access to comprehensive primary, preventive and chronic disease care. Most will also coordinate specialist and hospital care, offering a direct version of what policy experts call the "primary care medical home."
Direct primary care practices were invented in Washington State in 1996 and have now spread to at least 18 states. They are already transforming local health care by eliminating the two most pernicious consequences of the traditional insurance-based system -- first, the massive amounts of needless overhead expense on the 90% of health care issues which are routine and not catastrophic or even expensive, and second, the inverted system of incentives that drive doctors to treat us, rather than cure us.
Direct practices are transformational in four key ways:
1) No insurance means lower upfront costs. Without insurance reimbursement requirements on the 90% of health care issues that should be handled by primary care physicians, we can remove 40 cents from every $1 in primary care that currently goes toward insurance and related overhead. Individuals and businesses in direct primary care practices report savings of 20% to 50% on comprehensive health care costs by adding a wrap-around insurance plan.
2) Monthly care fees align incentives. Direct primary care practices replace the "fee-for-service" insurance-based incentive system where doctors make more money by doing and charging more. An affordable direct monthly fee system means doctors make money by keeping you healthy, not sick, and making sure you see value in your relationship so you don't quit. This fee includes all primary, preventive and chronic illness management for everything from vaccinations and pneumonia to minor fractures and ongoing treatment for things like diabetes, hypertension, obesity and elevated cholesterol.
3) Coordinated, high-quality care and downstream savings. By eliminating the time and cost burden of insurance, providers can break even by seeing 10 to 12 patients a day as opposed to 25 to 30 under the high overhead, low reimbursement insurance-focused model. This allows for unhurried 30- to 60-minute appointments versus the average eight-minute appointment, providing ample time to diagnose and treat patients and coordinate any necessary care throughout the rest of the health care system. This shifts the focus of care away from expensive specialists and hospitals to inherently inexpensive primary care from a provider who knows you best.
4) Increased provider and patient satisfaction. Direct primary care practices provide doctors and nurses with a great living and a great job. With salaries replacing the reimbursement process, doctors can get off the conveyor belt of unmanageable patient loads and reclaim the close long-term patient-provider relationship for which they trained. This shift will re-attract doctors to the practice of primary medicine -- in an era where the primary care doctor is rapidly becoming an endangered species.
Under this model there is still an important need for insurance, but for what it was originally intended -- to cover the rare occurrence of expensive, unpredictable care. Based on how the current insurance-centric, fee-for-service system operates, we estimate that shifting to direct primary care practices, coupled with a wrap-around insurance plan for catastrophic care, could save $1,000 to $2,000 per person per year. That's a total savings of $300 to $600 billion per year, which could go toward providing similar health care to the 46 million uninsured today.
By bundling direct primary care with a lower premium wrap around insurance plan -- either private or public -- the Washington State direct primary care model has the potential to transform our broken health care system. Direct primary care practices offer the potential to revitalize the direct doctor patient relationship without the needless Kafkaesque burden of the insurance reimbursement system. We must be bold and rethink health care if we are to achieve true reform. The time for this health care transformation is now.
Nick Hanauer is a Seattle-based entrepreneur and venture capitalist and the founder of the True Patriot Network. He has helped launch over 20 businesses including Amazon, aQuantive, Insitu and most recently, Qliance Medical.
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The US ranks 37th in the world in providing health care for the "average" citizen, according to the UN WHO. The US does not have the best health care system, just the most expensive.
A lot of the high cost of health care is the greed of the AMA, Hospital Assn, Drug companies and insurance companies. They submit serious inflated bills to see how much they can steal, the insurance companies pay it and raise premiums to the point where nobody can afford this fraud anymore. These stakeholders are making too much money off of sick people.
If 36 other countries are doing a better job at lower cost, you could copy any one of them and it would be an improvement over the current US fraud. (Fraud is when you promise something, I give you money and you don't deliver.)
Nick I think that this is a great solution.
http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande?currentPage=1
Lets try to clear the smoke from the weed! The two single objection hurdles are these. #1 People who have health care KNOW that their companies are going to dump them and tell all their workers to get on the government program which in all likelihood will not be as good as the programs found at AT&T, airlines, auto workers, railroads, federal jobs, Post office, UPS, national trucking firms, electric companies. Is the government ready to tell these companies they cannot close, discontinue, or force out employees health care? I don't think so. #2 where exactly are you going to come up with the money? Your 3 trillion dollars in debt and your credit is no good. Think IOU! Mostly the government is going to have to pay for the schooling of all medical personnel, and thats not loans you pay back, thats actual pay for it!
The insurance companies have been dumping the sickest patients on Medicaid for years, No Change There !
The money is going to come from the 20 to 30% reduction in Administrative cost that comes right off the top for insurance companies, an estimated 4 Trillion over 10 years !
Come on....look at how the government runs everything.
Do you really believe given this track record that the government will reduce admin costs or paperwork??????? That is a total pipe dream. Get real!
By eliminating the middle-man you get same health care coverage without the extra cost. But that would put paper pushers out of work, can't have that -all those extra trees stealing our oxygen. We need that for surgeries!
The DMV is a non-profit government entity. Do you really think medical care will get better by removing the profit incentive? This is the most idealistic and off base assumption that you socialist/liberals make. It's the "evil" profit motive that you folks despise that is in fact responsible for the monumental growth of our economy over the last century.
You people castigate pharmaceutical companies for making a profit but forget it was that very profit motive that spurred the development of some of the most important lifesaving drugs that we now enjoy. Most of these advances would have never been developed in a non-profit environment. You are literally trying to kill the goose that lays the golden eggs. Think about how many medical advances came out of communist Russia or even Western Europe in the last 50 years (like...ZERO). Most of the huge medical breakthroughs have been developed by US based companies striving to make a profit.
Profit is not evil.....it is what motivates people to do their very best job (or at least not get fired). The liberal intelligentsia really needs to rethink this.
1,000 to 2,000 dollar savings per year in the case of my current insurance premium costs come out to a savings of roughly 15%. That's not much in the grand scheme of things, plus I'm paying another $800 in subscription costs. Translation, savings of $200 to $1,200 per month. $1,200 is my current monthly health insurance premium. I have a $250.00 per year out of pocket deductible. I've been to the doctor once, this year for bronchitis that was not covered due to the out of pocket deductible. The presciption had a $10.00 co-pay. So, my company and I have paid $14,510 in the past year for...a $25.00 prescription. Worse, 40% of that has gone in insurance company overhead. How much of that went in someone's pocket as profits or dividends? Too much money is going out of the system in the form of profits and outrageous salaries all derived from the sickness and misery of others. It immoral and the republicans and the insurance companies or doctors making high 7 and 8 figure salaries cannot defend their positions. The only model that is sustainable is a Canadian/British/Taiwanese style healthcare system. Health insurance is the problem, not the solution.
It's not clear with your numbers exactly how much you pay for insurance, but it's clear that you think you and your employer pays too much for it, especially sice you do not use insurance very often. This was my case, but I got a surprise diagnosis of cancer and in that case I can tell you that $14k premium was a bargain compared to the medical bills. Sooner or later you will be faced with a catastropic health crisis as we all do and THAT is really what you're insuring for.
Please also re-think your animosity toward doctors. The majority are not wealthy --certainly not primary care, internal medicine, or family practice physicians. Those who are are usually at the top of their specialty, after speding years of 70 hour work weeks, being called day and night, and contributing to the well-being of thousands. These people are not your enemy.
http://www.pbs.org/video/video/1178899944/program/1113570149
What happens to be such a giant issue is not getting the attention it should. Until it does we will go on with the American way of doing things and wonder why our leaders didn't act before the crisis hits.
My daughter is spending 2 weeks in the Netherlands. I just got an email from her -- she had swollen lymph glands in her neck. Her friend took her to the doctor's office. Hardly a wait time in this smallish town outside Utrecht. Doctor's examination revealed nothing serious, as a first visit. Should return if it doesn't go away in a week. Charge? -- 0.00 Euros, NOTHING. Nada.
Eat it up America.
And what the doctor make, 00 nada! can you eat for that?
Total BS on your part. - Something part of your daily meal plan, I am sure of that!
The doctor is paid a salary by the state. Like any other civil servant.
Maybe the charge was $0.00....but that was not the cost. Somebody paid. Do you think it is fair that some poor Netherlander trying to take care of his own family also had to spring for your daughter too?
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Americans need to get it in their heads that people from other rich countries don't begrudge each other medical attention when needed. MOst are proud of their health care systems and especially proud to help visiting foreigners. It goes with good hospitality.
The Netherlands practices progressive taxation. Yes, they redistribute capital to that it benefits the largest # of people possible. There is not the kind of dire poverty the US experiences. I highly doubt there is even 1 dutch person out there saying "how am I going to feed my family since this American girl saw a doctor for free".
So, yes somebody paid. But they didn't mind. Dutch society doesn't keep its citizens in a constant state of financial insecurity and anxiety. I know that's almost unimaginable to an American.
Everyone pays into it, yes. Crazy isn't it?
The myth of the lengthy wait for primary care is a right wing scare tactic....
AND I have been waiting 2 years for basic primarycare, and I have diabetes. WHY? because I HAVE NO HEALTH INSURANCE and can';t afford $150 for a doctor visit and $600 a month for drugs.
. . . and that one about other countries like Canada who have to ration treatment for some services. When a specific health service is not available in Canada, they hand the patient a Government Chit to take across the border to the US to get treatment. Sounds like they care about people instead of profit, what a concept !
I think all Republicans and Blue Dog Democrats (spit) should drop their government, taxpayer paid health insurance and pay, out of their pockets, for private protection racket insurance. Maybe Bill Frisk could give them a break. Rememer him. Served just long enough to line his pockets.
I Agree !
A complete overhaul would be great, and would allow the doctors in other countries--where Americans are fleeing to for higher quality care--to treat their own populations. http://www.ecohearth.com/eco-blogs/small-earth/442-the-hidden-costs-of-medical-tourism.html
Several leading healthcare administrators have said that real healthcare reform will never be made in Washington as long as the revolving door between government and K Street is left in place. Just this morning, the Senate approved extending the Patent protection period to 12 years on certain Biologic prescription drugs, another give away to Corporate Pharma who can now hold off generic drug manufacturers, and lower drug prices, for a much longer period while they pull down obscene profits.
It is felt that real reform will most likely come from the states and it sounds like Washington state has a good start. Moves are being made in my state Texas to combine several large hospital chains into a public/private partnership and take advantage of the cost savings acquired through consolidation of services. I would prefer healthcare reform at the national level as we have all seen the outcome of Private/Public partnership for taxpers in several areas of our economy. Considering the power of special interest money in Washington, I have to agree that it's just not going to happen through the Federal Government !
how about this anyone.most of these companies were bought when bush was in office.
http://www.carlyle.com/Portfolio/Industry/item8228.html
The good news is that Attorney General Holder has decided to forge ahead with an investigation of the Bush/Chaney crime family and their crime spree over the past 8 years. Obama is not happy with this move but apparently Holder has told him, "Tough Feces". I have finally found someone in the Obama Administration that I like !
http://www.hereinreality.com/carlyle.html
http://archive.newsmax.com/archives/articles/2005/8/10/93657.shtml
The same situation exist in most US large city hospitals. One of the doctors who heads up PNHP.ORG practices medicine in one of Boston's major hospitals, he said they have a couple hundred billing clerks in their hospital. He also said that an equivalent size hospital in Toronto, Canada has three people handling all of their billing needs, a rare occurance in Canada..
There is one billing clerk for each bed at Duke University Hospital: 800.
Everyone on the Right is screaming about Big Government and the push is to privatize everything, from Photo Enforcement of Stop Lights, to Dispersion of Child Support, to the Contractors that cook and clean and maintain bases for our troops. So while government has never gotten smaller, we have private (for profit) middle men that simply drive the prices up and the level of service and responsibility down.
I for one want my government to once again take over the jobs they are supposed to handle. If I get a ticket, I want to deal with the court not a collection agency. If my step daughters child support is late, I want to deal with the State Child Support agency not a third party payment company, and if I need health care I want to deal with my doctor or hospital and simply have them paid out of money I put into a pool that is maintained by a NOT-FOR-PROFIT governmental agency.
I have had enough of every service company ratcheting up the price while they offer less and less of the service I am paying for while make the customer service impossible to use, all so they can generate bigger profits for their share holders.
And when you have to wait weeks or months for necessary treatment, what will you say then?
More right-winger B.S. myth. As if you don't have to wait weeks or months for necessary treatment in the U.S. already. Or go into bankruptcy due to piled-on tests and high-tech, superfluous treatments. Most American health care "providers" are far more worried about their billing procedures than treatment. That needs to change.
And if health care professionals don't like it, they're free to move to whatever free market paradise exists in their teabagger imaginations. But every other advanced country on earth already has more stringent health care controls than the U.S., so lotsa luck there.
Why would he wait any more for treatment than he already does?
Truth be told, there is more waiting now than there was in the old days - I know, I was there.
I think the reason is that the present business model is so bureaucratic that it drives prices up leaving less money for care. So there is rationing.
The word rationing is actually a word that free market economists use all the time. When there is a shortage of goods the price mechanism adjusts the price up to ration the available supply of goods among too many consumers.
If we do not reform and wring inefficiencies out of the system, there will be less and less money available for care as malpractice, administration, bad debts, government deficits, all contribute to a shrinking pool of money actually available for care.
Hanauer's blog shows how there are systems available in medicine that are not being used and which would leave more money left over for actual care because the inefficiencies are wrung out of the system
I pay $170 a week for family health insurance, and my Dr. visits still costs me $30. It used to cost $40 a week with $10 co-pays just 5 years ago.
If I go to my doctor because I am sick or because I have something wrong that I cannot explain, My appointment is at least 3 days off and when I do go, I get a script that costs me $10 to $50 to fill and am told to come back in 4 or 7 days for a follow up. This also costs me $30.
I put off some things because I simply don’t have the extra money to go to the doctor like I should. If we can keep the greedy For Profits out of the system there is no reason it cannot work better that what we have now.
All pro-government health care individuals need to watch this video to see what really happens in someplace like Canada:
http://www.youtube.com/watch?v=q2jijuj1ysw&eurl=http%3A%2F%2Fhotair%2Ecom%2Farchives%2F2009%2F07%2F14%2Fvideo%2Dcrowders%2Dmagnum%2Dopus%2Don%2Dcanadacare%2F&feature=player_embedded
Is that really what you want?
No thanks, I get enough Pro protection racket info from corporate media.
Of course you won't view it.... I mean, what real use is there in seeing the other side and viewing a factual hidden camera expose and interviews with real Canadians who are NOT in some Michael Moore movie, right?
I challenge you to view it and refute any of the experiences presented.
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