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Saturday, September 22, 2012

A trickle down idea from a rich 1% Democrat

An interview with Leslie Michelson in in today's WSJ. My wife pointed it out to me immediately this morning. She told me, "You need to read this". Mr. Michelson has created a company, Private Health Management, which assists the 1% in navigating the health care system. The mission of this company is to summarized:
Strictly defined, Private Health isn't part of the growing phenomenon known as concierge medicine, where doctors charge a retainer for more face-time and personal attention, and often take their practices off the commercial and government payment grid. Private Health isn't an insurance company either and maintains no contractual or financial relationship with its doctors. "We don't buy access," Mr. Michelson says. A large part of what Private Health does is simply match patients with physicians, which isn't as obvious as it sounds. "People do not know how to choose doctors. It's one of the most important things you can do to promote your own health and that of your loved ones, and it's: 'My friend's cousin's relative went to Dr. Smith, and he was terrific.' Well, how do you know he's terrific?" So Mr. Michelson built a series of proprietary algorithms to distinguish "the few who are the very best" from "the many who are very good," based on "the factors that predict excellence."  
However, I think the key statement comes somewhat later in the interview:
"As the biomedical revolution took off," Mr. Michelson says, "there should have been a counterbalance of somebody taking the position of the general contractor, the manager, and investing in the systems, the technologies and the processes to keep up." But the organization of medicine as an industry didn't change. So the health-care delivery system, to the extent it qualifies as a system, "has no quality control, no integration, no coordination." Doctors "tend to operate in an independent and isolated way, and even specialists who've been treating the same patient for years and years typically never, ever speak to one another."

How true. I think of all the times I try to call another physician, being provided their contact number by our shared patient, only finding myself up against the same barriers patients face when they attempt to call. I patiently wait for the admonishment to call 911 if I am in acute distress followed by the phone tree, prioritizing those who want to pay their bills of schedule appointments for high margin interventions. Often, I end up hitting "0" for the talk to a human option only to be told the office is at lunch or will get back to me when they can. I suspect that my office is the same way (perhaps worse). We end up not talking and hoping for the best. If something goes wrong they will likely reach someone else.

The business plan of Private Health Management is to basically supply an uncovered service to people who can pay for it. In that sense it is similar to concierge care or provision of lasik surgery or botox injections. The bad news it is not covered by insurance. However, the good news is that it is outside the constraints of the present day third party payment system. I would say the trade off is more than worth it if you can come up with the dough.

The sad truth is that despite all of the talk about rewarding coordination of care, there is no explicit and consistent payment of time devoted to such activities within the current payment structure. There may be a few ongoing experiments which are likely to disappear when their grants dry up. If the public were to wait for  the current players in health to development of such a key element of care, it would never happen. As a precondition for development, the mainstream players would insist it develop as part of the current payment system. I am afraid that it would quickly be co opted by those who fare well under the current payment structure which rewards expensive and fragmented care.

If this function can develop outside of the conventional payment models, what does that mean for how and where treatment happens and where market  power will reside in the future? For those of us who presently are so buried with business that we cannot take on more, why would we be so inclined to fast track some rich 1% who had paid a premium for access to some other rich third party?   The financial relationship is going to end up being much more nuanced.  Furthermore, assuming that entities such as PHM have their own physician teams assisting clients, how does that work when the direct care happens within systems where the PHM physicians are not credentialed and in states where they are not licensed? Maybe the business model, by claiming that they are not in the care delivery business, can circumvent these issues. That could spawn the development of a new opportunity for health care providers to shed their licenses, reinventing themselves as consultants who cannot prescribe or take call, shunting all the grunt and technical work to focused practitioners who wait for business to be shunted from the likes of PHM.

Ultimately, for optimal care the care coordination piece must be embedded locally. Someone needs to be in charge. Someone other than the patient or their family needs to be the general contractor.

1 comment:

  1. Retail clinics and freestanding EDs are examples of innovative delivery of health care that have disruptive power. Their traction in the market relies on convenience and the fact that they are cheaper alternatives to their more expensive counterparts. Accordingly, they have entered the industry at the low-end and because they cater mainly to non-consumers of health care, have strong potential to move up-market to displace more expensive venues of care.

    Concierge medicine and disease/patient management services, on the other hand, are costly services. The trade-off for concierge medicine is convenience but how they will be enabled up-market, if ever, is not clear. Meanwhile, disease/patient management services provide convenience and are being enabled by employers who are not only serving as early adopters but have the capacity to enable these services up-market. The fact that services like PMH are not regulated by insurance is a positive. It puts them squarely in the realm of the free market where early adopters can create demand, initiate supply, and subsequently drive down costs BEFORE being co-opted by the regulatory and value-killing realm of insurance markets.