A Better Way to Business Survival than Loans, Layoffs and Locking the Doors — Step 4
Add Value Based Primary Care
There is no well-functioning healthcare system in the world not built on proper primary care. The same can be said about health plans.
The difference between “proper” and “improper” primary care is a matter of fee-for-service (FFS) primary care versus value-based primary care (VBPC). The former is sadly the status quo, in which most primary care practices are owned by health systems/private-equity firms and serve as milk-in-the-back-of-the-store to drive patients to high margin services.
In this fee-for-service system, every service and procedure has a charge — and business leaders are billed for each regardless of how helpful they are to the beneficiary. As a result of this flawed incentive structure, primary care appointments are usually very short and often drive referrals to unnecessary, high-margin services such as scans and specialists. It also has a tendency to result in an over-reliance on prescriptions.
While Step 1: Learn how to be liberated from the status quo, Step 2: Optimize health plan infrastructure, Step 3: Carve out PBM are changes that can be made that are invisible to the employee, this step is the first one that is clearly visible to members — in a very positive way! Did you know that 75% of Americans surveyed didn’t have a relationship with a primary care physician? Thousand were asked if they had a relationship with a primary care physician, only 50% said they did. Of the 50% who said they did, they were asked if they could name them or if they’d seen them in the last two years — only 50% of that group could answer in the affirmative. Outdated health plans have enabled this and systematically decimated primary care over the last two decades.
Step 4. Add Value Based Primary Care — The “A” in the LOCAL acrostic
By comparison, in a value-based system, providers typically charge a monthly, quarterly, or annual membership fee that covers all or most primary care services including acute and preventive care. The fee is paid out of an individual’s own pocket, by a sponsoring organization such as an employer or union, or by a health plan offering commercial or government programs, such as a Medicare Advantage plan.
Most commonly, the practice has been devoted to the particular sponsoring entity (e.g., an onsite or near-site clinic for employers/unions), but models that serve multiple clients are maturing. Direct primary care (DPC), which offers care directly to individuals, plan administrators, and employers in a range of practice models from solo practitioners to national organizations, is one example of that.
Without the overhead that FFS carries, VBPC practices can offer a more proactive care model that delivers a substantially better experience for patients, often in one or more of the following ways:
- More time with their provider
- Same day appointments
- Short or no wait times in the office
- Better technology, e.g., email, texting, video chats, and other digital-based interactions
- 24/7 coverage by a professional with access to their electronic health record
- Far more coordinated care
- VBPC also improves provider experience and professional satisfaction, which, in turn, is known to improve the quality of care
From a business standpoint, this model can also lead to significant reductions in downstream costs. The better quality care from the outset, the less follow-up care — and associated spending — is needed later. And when the focus shifts from reactive, episodic care to a continuous care relationship that takes lifestyle factors and chronic illness into consideration, higher-quality, preventative care management will lead to better health outcomes — and potentially less spending — year over year.
When coupled with the other steps, organizations such as the Bennett School District, Pacific Steel and Rosen Hotels are literally spending half what other employers are spending per capita. For a low margin business, that can mean the equivalent of a 25% increase in sales revenue. For a budget constrained organization such as a school district, it’s the difference between maintaining programs and providing teachers raises versus what’s happening in too many school districts — cut programs and cost-shifting to teachers.
I’ve seen multiple organizations — and even entire communities — transformed by employers prioritizing value-based primary care and using saved dollars for higher and better purposes (see books and website for case studies); none better than Rosen Hotels. Check out my TED talk for a deeper dive into the details, but to prove that this approach works, consider this: Rosen Hotels spends 55% less per capita on health benefits than the average employer, connecting their employees to not only value-based primary care physicians, but physical therapists, behavioral health specialists, health coaches, and other health professionals.
There’s no reason you can’t follow in Rosen Hotels’ footsteps, especially since my next post will reveal the fifth and final step of this series.
Next in the series is the “L” in the LOCAL acrostic — Leave behind value-extracting PPO networks:
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Dave Chase is the co-founder of the Health Rosetta (an organization sharing and implementing practical, non-partisan fixes to healthcare), and author of the book, “The Opioid Crisis Wake-up Call: Health Care is Stealing the American Dream. Here’s How We Take it Back.” Follow the link to the book for a free download of the book. Chase’s TEDx talk was entitled “Healthcare stole the American Dream — here’s how we take it back.” See the Health Rosetta website for how to get involved, resources and how to join others to support its mission.
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