Primary Care’s Dilemma

Brian Klepper

Posted 9/12/12 on Medscape Connect’s Care and Cost Blog

Early in the new documentary, Escape Fire, which provides detailed portraits of US health care’s craziness, we meet Erin Martin MD, a young primary care physician in The Dalles, OR, who ultimately abandons her practice with low income patients. Time and financial constraints have frustrated her efforts to provide the care she believes is necessary to make a difference in people’s lives. Later, we see her in a business meeting with other primary care physicians in her new practice, reviewing financials. To maintain the practice’s revenues, they’ll need to see more patients, which means shorter patient visits. The defeat is palpable to her, to her colleagues and to the audience.

A few days ago, Rob Lamberts MD, 18 years into his practice, announced on The Health Care Blog that he was dropping out, leaving to go solo in a Direct Primary Care (DPC) practice catering to patients who can pay out-of-pocket rather than through insurance. Dr. Lamberts, a regular and characteristically sunny columnist, is workmanlike but chilly in his explanation.

Primary care doctors in these circumstances are not anomalies. Trapped inside a system that gradually has devalued their work while overvaluing specialty services, they have been forced into unpalatable choices. They can continue in practices that pay them far less than their specialist colleagues and require ever-faster churning of increasingly complex patients, many of whom need more of their time. They can take a primary care position with a health system, though many docs have complained about referral quotas.

Or they can move into a DPC practice which, at least theoretically, would provide a better income and work environment. There would be fewer patients and more time with each one. In the model Dr. Lamberts describes, he would see about 1,000 patients, or about one-third of his current caseload. The practice would not take insurance, so the paperwork and time involved with billing/collections would disappear.

As is generally the case, the numbers are the bottom line. Are enough patients eager to have more of a primary care physician’s time and attention? Are they willing to commit to a monthly primary care fee to keep the practice afloat? Thompson Temilade Aderinkomi provides DPC practice calculations that should be interesting reading to physicians contemplating this path. He estimates that, to make ends meet, a DPC practice needs to charge at least $40 per patient per month.

Keep in mind that, for patients, this would be on top of the cost associated with a health plan. An important question is whether aligning with a good Direct Primary Care practice can make lower cost health plans feasible, reducing overall health care costs. This is the teaser that Qliance, the rapidly-growing Seattle-based investor-owned DPC practice offers in one of their press releases:

“Through Qliance, patients and employers are getting exceptional care and saving up to 50 percent on comprehensive health care costs when bundled with a lower-premium insurance plan.”

Qliance is an evolved, corporatized DPC practice. It may be fair to assume that they’re a top contender to dominate this space, based on their successful lobbying effort to insert a DPC provision in the 2009 health care reform law.

Monthly patient fees vary between $49-$129. A drug dispensary, lab and x-ray are onsite at the clinics but, except for the first prescription drug filled, incur costs beyond the monthly fee.

Qliance’s physicians have only 500-800 patients in their panels, which provides generous visit time. For context, consider that the typical rank-and-file primary care doc working in a fee-for-service insurance environment sees between 2,500-3,200 patients. A Johns Hopkins internist told me last week that she has, on average, 7 minutes with each patient. In my firm’s advanced medical home clinics, caseloads run 1,600 patients – 2x-3x the Qliance ratio – which translates to very ample 20 minute office visits, on average. More time invested in visits is rewarded with higher satisfaction rates.Qliance trumpets this, and so does my firm.

In a presentation posted on the Forbes site, Qliance hints at impressive results, with primary care associated with significant declines in emergency and specialty visits, hospitalizations, surgeries and advanced images. They claim an $864 per patient average cost reduction associated with their approach, which they project could mean a $268 billion (10%) health system savings if generalized to the entire US population.

The business value question is whether an investment in DPC can consistently save more money than it costs. Hard claims reduction numbers for Qliance that support the $864 figure may be available, though I didn’t see them in their presentation or their site. For employers and other purchasers considering integrating DPC into their health benefit offering, this proof of financial performance matters, and will be the hurdle to success in the market.

Difficulty in nailing down immediate significant cost reductions is understandable, though. Primary care is powerful, but its positive impacts may take time to manifest. Real traction over health costs requires broader and more aggressive approaches that include enhanced analytics and clinical decision support, onsite wellness/prevention and disease management, management of downstream services and cost-effective acquisition of high value health care products/services. Few organizations have developed these capabilities to date.

And then there’s the question of whether there are enough affluent patients to go around, enough to afford this level of personalized attention beyond the cost of conventional coverage. Most families will find the cost prohibitive.

Like onsite clinics, DPC practices appear to be evolving rapidly to provide better full continuum medical management and financial impact. For primary care physicians seeking to escape, they are a solution, but one that may compromise mission for money.

Primary care’s dilemma is the smoking gun of the health care industry. Despite a mountain of data showing that more primary care produces better health at lower cost, it has been compromised by the politics of Medicare’s and commercial health plans’ reimbursement approaches. Since both are acutely aware of primary care’s potential, the only rational conclusion is that the leadership in both arenas are comfortable with poorer results at much higher cost.

Of course change is occurring, but it is slow, sporadic and only available in pockets. For most patients, purchasers and primary care physicians, the choices are still extremely limited. They’ll likely remain that way until more meaningful reforms occur, possibly through policy but more likely through the marketplace.

About Brian Klepper

Brian Klepper is a health care analyst and the Chief Development Officer of WeCare TLC onsite clinics.
This entry was posted in Brian Klepper, Health Care Cost, Innovation, Market Dynamics, Medical Management, Physicians, Policy/Law/Regulation, Politics, Quality and tagged , , , . Bookmark the permalink.

One Response to Primary Care’s Dilemma

  1. DoctorSH says:

    The marketplace with patients paying first dollar for primary care services is the only way to bring down costs of care. The govt can get involved by funding HSA accounts for lower income individuals. Third party insurance can be used for emergency and hospital care, which is where it is needed.
    The high costs of care today are due to the third party system, so the solution is not give this system more power.

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