By MATTHEW HOLT & CLAUDE
You’ll recall that a few weeks back I gave Claude some prompts and my entire corpus of work on THCB and asked it to write a piece. It was about 70% my ideas and 50% my writing tone. I’m back trying it again. This time I gave it a lot of prompts from some Linkedin pieces and comments I wrote and then I spent about 20 minutes editing it. This one is about 85% my idea and maybe 70% my tone? I have rewritten something in every paragraph. But it’s a hell of a lot faster than me writing from scratch. So I am going to keep experimenting like this for a while.
This started as a LinkedIn post. The Center for American Progress’s new 10-point health reform plan is just more incrementalism and worse too boring for anyone to pay attention. Goozner’s own proposal, capping out-of-pocket expenses, isn’t much better. We’ve spent nearly a century proving that incremental reform in American health care doesn’t work — we still have tens of millions uninsured, patients going bankrupt, and outcomes that trail most of the developed world. And of course it enables profiteers to massively extract wealth from the system. In other words, from us.
My alternative: go to the barricades and blow the whole thing up. We need revolution because modest evolution cannot work.
My proposal, which you should go and read is to give everyone a voucher for primary care, but make it Concierge care for all.
The post got some pushback, and some of the objections reveal something important. My idea isn’t too complicated, but so many of us are so imbued in our broken system that we can’t see beyond it. And to be fair, it’s only after 35 years looking at it, that I’ve got the “burn it all down” religion.
My Basic Idea
My proposal is Concierge Care for All. Every American gets a voucher worth somewhere between $2,000 and $3,000 a year, which they have to spend with a primary care physician (or primary care organization) of their choice. Each PCP or equivalent takes on a panel of around 600 patients — roughly 1/3 to 1/4 what a typical fee-for-service PCP practice manages today, and the same as most current direct primary care practices.
That’s $1.2 to $1.8 million in annual revenue per physician; enough to pay the doctor $500,000 to $600,000 a year and still leave $600,000 to $1.3 million for clinical staff, technology, and overhead. This is basically the MDVIP model. It works. People who use it love it. And the latest studies show that it saves a lot (31%) on hospital emergency room use and inpatient costs. That alone saves a significant fraction of what this transition would cost.
The bulk of what a PCP does in this model is managing chronic illness — diabetes, hypertension, heart disease, COPD. These are the conditions that drive the majority of health care spending but which our current system sucks at managing. A well-resourced primary care practice, freed from the hamster wheel of volume-based billing, can do this proactively and can deploy the technology to do it at scale. Remote patient monitoring, AI-assisted care management, continuous data from wearables and home devices — the tools that many digital health companies have shown working well — all of that gets directly integrated into primary care where it belongs. The PCP organization is the purchaser of those technology services. This is basically the logic behind CMS’s new ACCESS program, except that ACCESS tries to bolt these capabilities onto the system from the outside. In this model they’re baked into primary care practice because the PCP wants to manage their patients and has the professional ethics and responsibility to do so.
I’d include a lot of mental health and dental care in the definition of primary care, as well as minor urgent care. Plenty of primary care groups in the US and elsewhere do that now, even though we’ve historically pretended that the head isn’t connected to the body and the teeth are outside it.
What isn’t there is equally important. No co-pays, no coinsurance, no deductibles, no claims. No staff managing all that bureaucratic crap. Your PCP manages your care, knows you, and when you need a specialist or a scan or a surgery, they refer you.
What About Specialty Care?
Gary Levin asked the question: what do you do with specialty care? My answer is that specialists and hospitals operate on fixed global budgets, allocated by the government — the same way it works in most other countries. Of course we are spending way more than them, so we will have both higher paid specialists and better treatment. We just won’t have hospital execs paid like Cy Young winning pitchers.
We’ll keep the existing organizations: the academic medical centers, the regional hospital systems, the specialty practices. We’ll just stop paying them per transaction and start funding them as institutions. Everyone is salaried. Nobody has an incentive to over-treat.
Importantly nobody has an incentive to deny care either. Specialists will compete on prestige and outcomes — which are transparent to PCPs, who control the referrals. That’s actually a healthy competitive dynamic, just not the one we have now.
But “Walk Me Through a Claim”
Lori Block pushed back on the financing and asked me to walk through what happens when someone needs heart surgery. What about the claim? Bottom line. There are no claims
So if a PCP notices something concerning with your heart and it’s outside the scope of their practice–don’t forget what Bob Wachter is saying about AI making PCPs as smart as specialists, they refer you to a cardiologist via immediate telemedicine, or send you right out for a scan. The specialist and imaging facility, radiologist et al are operating under a regional budget for specialty care. The cardiologist orders imaging, consults with your PCP, and together with you they determine surgery is warranted. You go to a hospital and get treatment, and later get referred down to whatever level of nursing care or home care you need.
By the way, most of this all happens today and is already substantially funded by the government. The only difference is there’s no incentive for the hospital to go looking for the high margin procedures and incent its surgeons to do more of them.
Also we are saving money in admin. At no point does anyone send the patient a bill. At no point does an insurance company’s utilization management team decide whether the procedure meets their “medical necessity” criteria. At no point does the patient find out six weeks later that the anesthesiologist was out of network. None of that back and forth that costs billions happens. No need for the tens of billions we spend on RCM.
There are no claims in this scenario because there is no claims-based system. There are just professionals, funded by global budgets, making clinical decisions.
What About Insurers and Hospitals?
Lori also raised the bogey man question: isn’t this just government-paid healthcare? Yes, it is. But 70% of major insurers’ revenues and almost all their profits already come from the government. Medicare, Medicaid, ACA subsidies, et al. Same thing is true for the big hospitals systems, with a byzantine system of Federal subsidy. We’re already paying for this.
Todd Guren raised the insurance risk question directly — who absorbs the $50 million claim if you get rid of the insurers? The answer is: there are no $50 million claims in a system where hospitals and specialists operate on fixed budgets and can’t price-gouge. Those numbers are an artifact of the current system. The federal government takes the catastrophic risk, which it effectively already does.
Do We Have Enough Primary Care Doctors?
Jeff Goldsmith — health futurist, and the person who persuaded me that value-based care doesn’t work and that we can rely on the professional ethics of doctors — raised the sharpest objection: where do the PCPs come from? We need roughly 600,000 primary care physicians to panel the entire country at 600 patients each. We have about 250,000 now. That’s a real gap, and 23% of current PCPs are already over 65, so that current number is going down
But the solution is hiding in plain sight. There are around 100,000 to 150,000 physicians doing internal medicine and emergency medicine who could transition to primary care without much friction. And there are 400,000 nurse practitioners in America, many of whom are already functioning as primary care providers.
And of course a lot of specialists who went into specialty medicine because that’s where the money is. Plenty of them will move to being a PCP when they discover they can make $600k a year being one— with a manageable panel, no insurance hassles, and the ability to care for the whole of their patients’ health. Financial incentives created the workforce distortion we have now. Financial incentives can fix it. Not to mention we can change some rules around the interstate practice of medicine and give them better tools to manage their patients’ health. Not every specialist will quit to be a generalist, but plenty will.
We’ve spent forty years proving that incrementalism in American health care policy hasn’t worked. The American people know the system sucks. All we have to do is explain how we fix it by giving them great concierge care.
Matthew Holt is publisher of THCB and Claude will soon either make a world of abundance or wipe out humanity. (Delete where applicable)
