There are other profit-making arrangements besides fee-for-service. If doctors are salaried by a profit-making group, paid a fixed amount, then there is no direct incentive for doctors to schedule lots of visits and lots of tests for patients.

Doctors don’t prescribe antibiotics so they can make a profit. They don’t make any more money when they whip out their prescription pad and give the patient a prescription. Doctors prescribe antibiotics because their patients, sick with a viral infection, are apt to demand something from their doctors.

In any case, prescribing antibiotics for viral infections is only a tiny part of the total health care cost picture. Surveys have repeatedly shown that it’s the BIG chronic illnesses–cancer, Alzheimer’s, arthritis, heart disease, kidney disease, AIDS–that are the big cost drivers. We’re able to keep patients alive–but often their disease cannot be cured, so their disease requires constant management and expensive treatments.

Isn’t that a problem in and of itself? No? Really? How can it not be? Combine it with the threat of litigation and you have a system that actively encourages over-treatment, also known as “defensive medicine,” which reaches the apex of incoherence in the rampant prescription of antibiotics for viral infections. No? This is not incoherent? Really? How can that etc. etc.

That was a while ago. One of the better articles I have read about the cost of health care cost was in the June 1 New Yorker. The Cost Conundrum, by Atul Gawande.

Well worth reading.

I used to have Kaiser when my children were growing up. At the time I felt Kaiser was very good at primary care but their specialty care had a long way to go. Of course 90% of what kids need is primary in nature. Kaiser specialty care has come a long way since then.

Wow…

Thanks, L&W! Very enlightening. (*NOD*)

Re: Sftor1 // Jul 31, 2009 at 1:59 am –

“I don’t understand these continued ad hominems on Otto.”

Really…???

Hmm… interesting; very interesting…

(*GRIN*)

BILL

Go Otto.

And very similar to Dem legislators who don’t read what they vote on. Otto likes to comment on what he doesn’t read, or possibly comprehend.
The part where you state that 90% of the claims workload is from primary care and eliminating that would be a major cost savings seems very plausible.

……….You never did fess up you worked in the industry as you obviously do…..go on be a man not a mouse…..it would also make your contributions more credible to those few like myself who follow them …..otherwise a not too slanted description of how the system works in practice……but then you get into pie in the sky land…….many of the European systems use the capitation formula for primary care……it seems to work although as ever there are arguments about reimbursement levels………what you never really address is how we make a $2.4 trillion system into a $1.4trillion system which would still put us at the top of the peer group in expenditures but means $1 trillion of economic activity has to be squeezed out of the system over say a ten year period

More clarity…Kaiser Permanente is a “non-profit” health care company. they own their brick and morter and equipment. They hire and employee all staff with the exception of the doctor. the doctors all belong the the Permanente Medical Group. this part of the company is very much FOR PROFIT. Last I checked (this morning) Kaiser is not all that much more competitive than other HMO programs. Although they have consistently improved their delivery every year for the last 15 years I have studied them. All their hospitals are retro-fitted and they have electronic medical record technology which is utilized across their business.

Medical groups are not a magic bullet as they are more likely to increase profit, than decrease the cost to the consumer. Also, they are closed circuits, meaning you can’t access care outside of the medical group.

My suggestion has always been to separate primary care from other care, have all primary care doctors on salary based on a per member per month rate with limited membership which statistically can be handled by one doctor. the number happens to be 2000 patients. What if 2000 of your neighbors went to the best doctor in the community and said, we want to pay you $250,000 a year. We won’t sue you, we won’t ask you to bill an insurance company. In fact, we also want to hire two nurses who can be trained to do a lot of the stuff you do. We’ll pay them each $50,000. Doesn’t that sound like a good deal? It would cost the patient $14.58/per month for primary doctor care. Oh, yeah, we’ll pay the rent. that will add another $1.50 per month to our cost.

I actually would build this out quite a bit, adding in all primary care (mental health, chiropractic, vision and oral health ). But an interesting thing happens when you totally exclude these claims from the cost of providing insurance. The cost of the insurance and the cost to administer the insurance drops dramatically. 90% of claims are primary care. that is a dramatically reduced work load.

Layer on top of the primary care coverage private individual medical insurance which is based on fee-for-service Medicare rates. The consumer can pick a plan which reimburses at the medicare rate, or medicare plus 25%, 50%, 75% and 200%. Using quality outcomes, education and length of experience, doctors would be ranked at 1, 1.25, 1.50, 1.75 and 2.0. If you wanted to go to the very best doctor in the country, he would earn his 2.0 (or double pay) and you would choose between paying the insurance premiums of a 1.0-2.0 plan. Either way, you pay for what you want and you have the freedom to do what you want.

That’s the point–and that’s the problem.

If you really want to bring down health care costs and keep them down, you have to fundamentally change how medicine is delivered in this country. You could totally zero out the insurance companies’ profits, and after that you would find health care costs rising again–because of the way medicine is practiced.

Encouraging doctors to join into medical groups, in which they will be salaried by the group, is one promising avenue. (Virtually all of my own doctors are in groups of three or more doctors. That’s the wave of the future in Massachusetts where I live.) That helps eliminate incentives for unnecessary visits and concomitant tests.

Another is to expand the base of the pyramid. We need more primary care physicians, and lots more Nurse Practitioners (NPs). Doctors don’t like NPs much, because they see them encroaching on their turf. So be it. That’s competition–the American way.