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.
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.)
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 !
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!
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.
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.
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.
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".
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.
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 !
http://www.carlyle.com/Portfolio/Industry/item8228.html
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 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.
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
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?
I challenge you to view it and refute any of the experiences presented.