SCHIMPFF: Health care fix: Patients pay doctors

Cutting out insurer middleman would revolutionize care

There are distinct advantages for the patient who pays the primary care physician (PCP) directly: higher quality, lower cost and greater satisfaction.

The fundamental problem in health care delivery today is a highly dysfunctional payment system that leads to higher costs, lesser quality and reduced satisfaction. The core problem? The patient is no one’s customer. With employer-based insurance, the physician’s customer is the insurance company that sets the rates, defines the rules and accepts or denies the bill; the insurer’s customer is the employer. This is much different in concept and function from the professional-client relationship with your attorney or tax accountant. Those relationships are direct — you establish your requirements, negotiate the fee or choose a different provider. In medical care, the patient has no standing in the financial arrangement, whether employer-based insurance or Medicare or Medicaid.

Add to this the non-sustainable business model PCPs find themselves in today. Insurers have kept reimbursements flat for a decade or more. Meanwhile, office costs have risen. With more expenses and static revenue, the PCP tries to “make it up in volume” by seeing more patients for shorter visits. A visit of 12 to 15 minutes may be fine for a quick blood pressure medication check or a sore throat, but it is not enough for good preventive care. Nor is it adequate for the patient who has a complex chronic illness (e.g., diabetes, heart failure or cancer), which consumes 70 percent to 85 percent of insurance claims paid. This patient will need a multidisciplinary team of providers to render all the care needed. Still, the team needs a quarterback, and if care is not well-coordinated by the PCP, the number of specialist visits will skyrocket, as will tests, procedures and expensive prescriptions.

How will primary care be paid for if not by the insurer? By the patient paying directly.

When it is his money, the patient commands more physician time — time needed to do careful assessments, to call a needed specialist and describe the rationale for the referral, and to request a prompt appointment. When the patient pays directly, he will begin to challenge the doctor: “Do I really need to take that test, visit that specialist or take that prescription?” “Will the result of that test alter my care or is it just to be complete?” Questions like these lead to better care and lower costs.

With a direct payment arrangement with the physician, patients can buy a high-deductible policy with its lower premiums for unexpected expensive needs. The patient and physician now have a direct professional business relationship. The patient begins to take a much more active role in the entire care process.

Direct payments save the doctor time and money (estimated to be about $58 per visit) by cutting out the billing functions. This savings alone could allow for more time with the patient at the same level of reimbursement that insurance pays today.

Some employers make high-deductible options available. This should be the standard, with savings going to a health savings account to use toward paying for primary care. Medicare does not have a high-deductible option, but it should. President Obama’s signature legislation, the Patient Protection and Affordable Care Act, or Obamacare, allows for high deductibles in the insurance exchanges, but not for Medicare where there are also no health savings account options. High deductibles would be a useful accommodation and help bring down — today — the spiraling costs of Medicare.

Obamacare also mandates that approved preventive care, including screenings, be offered with no deductibles or co-pays by both commercial and government-sponsored insurance. Why not let the individual choose to either pay for preventive care directly or have free preventive care with correspondingly higher premiums?

Absent change in the insurance model, PCPs are taking steps on their own to change their business parameters. Large numbers are simply closing their practices and being employed by hospitals. Some refuse insurance and accept only direct payment. Other PCPs are switching to retainer-based practices, charging $1,500 to $2,000 per year. They agree to reduce the number of patients followed from 1,500 to 2,000 or more to about 500. This allows PCPs time they need to give comprehensive preventive care and orchestrate multidisciplinary team care for patients with complex chronic illnesses.

There is a strong need now to change the professional relationship so that patients have an incentive to take control of their doctor-patient relationships. Direct payment for primary care services creates the appropriate professional-client relationship that leads the PCP to deliver quality and service while giving the patient the responsibility of taking ownership of his own health and wellness. These are changes in the delivery system that need to occur, and the sooner the better.

Dr. Stephen C. Schimpff is chairman of the Sanovas scientific advisory board and author of “The Future of Health-Care Delivery — Why It Must Change and How It Will Affect You” (Potomac Books, 2012).

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