The Boomer parents of Millennials may have complained about their kids leaving messes around the house, however Boomers are leaving an exponentially bigger mess for their kids. Millennials will see their future stolen if the healthcare cost beast that Boomers have largely ignored isn't slayed.
Healthcare’s hyperinflation-driving fortress has been impenetrable to forces trying to disrupt it over the last couple decades. Whether through regulatory capture to protect the status quo or self-inflicted mistakes (e.g., HMO “gatekeeper” and denial of care debacle), healthcare has been remarkably resilient to forces that have driven change in virtually every other sector.
At long last, the gig is up and the fix is in (the good kind of “fix”). It’s coming from the edges and is largely unnoticed by incumbents who haven’t delivered any productivity gains in over 20 years (unless you measure productivity by getting out bigger bills).
In the United States, direct primary care (DPC) is primary care offered directly to the consumer, without insurance administration. It is an umbrella term, incorporating various delivery systems that involve direct financial relationships between patients and healthcare providers outside of the volume-driven insurance-based model. It can be implemented in a range of practice models from solo practitioners to organizations national in scope.
Direct Primary Care (DPC) is primary care model that offers patients, physicians and purchasers an alternate to fee-for-service (FFS) payment arrangements. In traditional arrangements primary care physicians are paid in FFS model, meaning they are reimbursed by the volume of services they provide. DPC offers a meaningful alternative as healthcare purchasing shifts from a volume to a value model.
DPC typically charge a membership fee on a monthly, quarterly or annual basis. This membership fee covers all or most of primary care services including acute and preventive care. The fee is paid for individuals out of their own pocket or via a sponsoring organization such as employers/unions or via health plans managing government programs such as Medicare Advantage. Most commonly, the practice is devoted to the particular sponsoring entity (e.g., a near site clinic for employers/unions or a Medicare Advantage-based clinic devoted to seniors).
DPC should not be confused with concierge primary care. Concierge care often adds a layer of enhanced access and amenities, paid for on a subscription basis, to a base of traditional fee-for-service primary care.
A Transparent Medical Network offers employers and organizations such as unions a set of fair and fully transparent pricing for medical services/procedures ranging from a specific treatment (i.e., knee replacement) to a specific condition (i.e. diabetes). Providers provide up-front pricing at significantly reduced rates in exchange for increased patient volumes, quick pay, reduced friction and the avoidance of claims/collections problems – all factors that allow for providers to have greatly reduced prices while netting a similar amount to standard insurance billing. Services and procedures are typically bundled, meaning there is just one bill for the all the services rendered across a specific treatment or condition, multiple providers and sometimes multiple settings. Another dimension of transparency is that the network is open to any provider who has sufficiently high quality indicators and is priced fairly...
Let's face it, your health benefits stink. Given the massive amount of money spent by employers on health benefits, it's brutal to look at just how bad the status quo is for health benefits. Great people are operating inside of a horribly designed system as this NY Times doctor/columnist/patient painfully describes. Far more resources have been directed towards administrative overhead designed to optimize revenues than to optimize the Quadruple Aim. Fortunately, smart employers such as a small manufacturer and a small hotel chain have proven how you can spend 30-50% less per capita AND provide great benefits.
The fact is that most payroll increases for companies have gone to pay for healthcare's hyperinflation, rather than wages. Forward-looking organizations recognize that we can expect much more from this large of investment.
The Health Rosetta is the model health benefits package that wildly outperforms the status quo. The positive impact for employees and their community are breathtaking when they are employed. In contrast, we see teacher strikes with health benefits being a core issue of contention. The cost of healthcare's hyperinflation on a typical American family's nest egg has been $1M. Most people haven't made these connections, nor do they know how much better things are when the health benefits are optimized. This is a core reason behind thedocumentary I'm working on -- i.e., to catalyze a movement that is a partnership between increasingly dissatisfied clinicians and individual citizens (aka patients, consumers, people)...
Open Sourcing What Works in Health & Wellness
HEALTH TOO IMPORTANT NOT TO OPEN SOURCE
Few argue that we have a fully optimized healthcare system. In fact, many argue the opposite. The horrible under-performance of status quo health benefits points out just how bad it is. However, I have good news for you. All of the components of a high achieving health ecosystem have not only been created — they have been proven with solid evidence backing them up. When an organization employs components of the Health Rosetta, the results are breathtaking. For example, a small manufacturer saved 30% per capita on health benefits costs versus their peers while a hotelier saved 50% per capita versus their peers.
[Update: Since originally publishing this piece, the Health Rosetta has become the call-to-action for a documentary being directed by an Academy Award nominated filmmaker,investment thesis for a venture fund and business coalitions have structured their annual conference agendas around the Health Rosetta.]
For an example of how the Health Rosetta would flesh out a particular area, see Transparent Medical Network, Value-based Primary Care or Concierge Style Employee Customer Service. These three examples were prioritized first as they have the shortest ROI period and can be layered in at any point during a benefits period (i.e., no need to wait for annual benefits changes)...
For the last several years, I have been closely analyzing the consequences of healthcare’s under-performance. The waste and sub-par performance have convinced me that there is no greater immediate threat to the American way of life and the American Dream than if we continue the status quo healthcare system. Naturally, there are other threats (e.g., climate change) but none that are not only severely impacting the nation today but have a negative impact that is growing far more rapidly. Further, if we solve healthcare it frees up resources to address other challenges facing (education and climate change being at the top of the list)...