April 1st, 2009 by AlanDappenMD in Primary Care Wednesdays
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Imagine yourself a patient 2400 years ago. By chance, Dr. Hippocrates is your “preferred provider.” You and Dr. Hippocrates have a long standing relationship, and you’ve seen him in person many times, including for a comprehensive check-up and medical history. Since his office is located 20 miles away, getting there requires a Herculean effort. With the help of friends, donkeys, walking and several days of delay you luckily arrive before closing time at 4 pm on Wednesday. You remember well the weekends, the evenings and the holidays that you got to the office sicker than a dog, only to be left in the street until the clinic re-opened.
When you arrive, many sick patients greet you, their expressions fatalistic. All have made similar journeys, and some are very sick. A line strings out the waiting room door that is two hours long. Dr. Hippocrates is rushing to finish the day’s work, see the last person and go home to supper and his family. With so many people to see and not much time, Hippocrates flies through the patient histories, relying only on his memory, knowledge and expertise to prescribe treatments and cures, moving quickly from one patient to the next.
For you, an herb is prescribed and you make the arduous journey home. Two days later you’re feeling worse. Maybe it’s the herb, maybe it’s the wrong diagnosis, maybe it’s the exhaustion from the ordeal. Yet one thing is for sure, taking the trip back to Hippocrates is too daunting to consider.
Fast forward to present day, and consider yourself as patient. Fortunately, the science of medicine has changed exponentially. Sadly the business model and the experience of getting that care is egregiously similar. Every time you need to use health care in today’s world, a gauntlet of obstacles stands between you and the service. First, there’s the receptionist answering the phone, then the scheduler fitting you into a limited number of times to come to the office, with all available slots being at least two days in the future. Upon arriving at the office, a waiting room stuffed full of sick patients greets you. Next, the person at the in-window verifies your insurance eligibility. On to the nurse who greets and reviews your history, then a wait again for the hurried doctor to rush in, and in 10 minutes or less, reduce your problem to a prescription. You’re ushered out and to the window where the co-pay is made and next a follow-up visit scheduled. The bill proceeds to the billing specialist and somewhere along the way (often months later) you might get an insurance adjustment charge. The next day you wake up with a rash. Maybe it’s the drug, maybe it’s the wrong diagnosis, but taking that trip back through that system is going to give you pause and it’s not just the pause of your time or life interrupted. For most day-to-day health care this story has repeated itself ad infinitum from antiquity until today.
A huge unexamined question in primary health care revolves around the requirement of “forced” office visits. Why do you think you are going to the obligatory ritual of the office visit for every medical problem be it a prescription refill, poison ivy rash, allergic runny nose, tick bite, urinary tract infection among thousands of other problems. Do medical experts really need to “see” you to protect you, themselves, or build a relationship?
The answer to this conundrum once analyzed is simple: No. As a matter of fact, the majority (over 50%) of routine primary care health problems can be taken care remotely, by phone, email, IM, or even online chat, if the doctor and patient have a pre-existing relationship. And why don’t more primary care practitioners use the convenience of remote access to get their patients the fastest initial and follow-up treatments possible? It’s about the money. Insurance companies pay a doctor to help you by seeing you face-to-face. Since doctors are beholden to insurance companies payments to cover the cost of your visit and since your copay doesn’t even get close to covering the cost of running the business. So the primary docs elect to put you through The Funnel.
When the idea is first suggested, most people disbelieve that phone consultation alone between a doctor and patient could handle more than 50% of the medical issues sent through the funnel of the mandatory office visit gauntlet. Don’t misread this, talking with your doctor doesn’t mean that you don’t need to be seen in person sometimes too. Likewise, all patient-doctor relationships should begin first with a face-to-face visit, complete with check-up and the discussion of the patient’s prior medical history. However, just open your eyes to the possibility of a new idea. I’ll let this uncomfortable thought settle in for while and will check back on your progress in my next post.
Until next week I remain yours in primary care,
Alan Dappen, MD
March 26th, 2009 by Dr. Val Jones in Expert Interviews, Opinion
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When most people think of “cash-only” medical practices, plastic surgery and dermatology procedures are top of mind. But there is a small contingent of primary care physicians who offer low-cost “pay-as-you-go” services. Yearly physicals, well-child visits, screening tests, vaccinations, and chronic disease management are all part of comprehensive primary care options available. And this costs the average patient only $300 a year.
It is estimated that 75% of Americans require an average of 3.5 office visits per year to receive all the medical care they need. If the average office visit is 15-20 minutes in length, then that averages out to 1 hour of a physician’s time each year. How much should that cost? Dr. Alan Dappen (founder of Doctokr Family Medicine, a cash-only primary care practice in Vienna, Virginia) says, “$300.” But insurance premiums are often closer to $300 per month for these Americans, and that doesn’t include co-pays for provider visits.
So why aren’t people buying high deductible insurance plans, saving thousands on premiums per year, and flocking to cash-only primary care practices? Dr. Dappen says it’s a simple matter of mindset – “People have been conditioned to believe that if they pay their insurance premiums, then healthcare is ‘free.’ In reality, their employers are taking out $3600 or more per year from their paychecks for this ‘free’ care. But since employees don’t see that money, they don’t miss it as much.”
A high deductible health insurance plan (where insurance doesn’t kick in until you’ve paid at least $3000 out of pocket in a given year) costs about $110/month for the generally healthy 75% of Americans (you can check rates at eHealthInsurance.com). That’s a savings of at least $2280/year for those who switch from a regular deductible plan to a high deductible plan.
What are the odds that the average, reasonably healthy American will outspend $2280/year? I asked Alan Dappen how many of his 1500 patients spent more than $2000 on his services per year. The answer? Three.
“Most Americans who buy-in to low deductible plans pay a lot more in premiums than they’ll ever use. They’re essentially betting against the casino, and we all know who wins on those bets.”
So I asked Alan Dappen if “the casino” was making most of its money on the “healthy” 75% of its enrollees to subsidize the cost of the sick 25%.
“Sure they are. And I suppose if enough people saw the light and switched to high deductible plans with cash-only physicians, it might force change in the health insurance industry. Perhaps the government would use our taxes to help subsidize the sicker patients.
The bottom line is that at this very moment, 75% of Americans could be saving thousands of dollars per year on their healthcare costs – and have their very own cash-only primary care physician available to them 24-7 by phone, email, home visit, or office visit. The cash-only doc can afford to offer these conveniences because they are paid by the hour to do whatever the patient needs done, without forcing the relationship to conform to insurance billing codes. In fact, the physician saves a bundle on coding and billing fees – and can pass that on to the patients.”
I wondered about the outrageous costs of laboratory fees and radiology charges for people who don’t qualify for the insurance company negotiated rate. Dappen explained:
“My practice has negotiated similar rates with local labs and radiology groups. Screening tests and x-rays are very reasonable.”
I asked Dr. Dappen who uses his services.
“I see both ends of the spectrum. The high-powered executives who don’t have the time to wait in a doctor’s office and enjoy the convenience of handling things with me via phone or house call. For them, time is money, and by losing half a day or more traveling to a doctor’s office and waiting for their 15 minute slot, they might lose $5000 in billable work time. On the other end I see patients with no insurance or high deductible plans. They enjoy the same conveniences, and end up paying an average of $300/year for their healthcare. This is high quality care that they can afford.”
I guess the only thing preventing this model of healthcare from taking off is the courage of individuals to try something new. I myself have switched to a cash-only practice with a high deductible health insurance plan, and have saved myself thousands a year in the process. I love the convenience of knowing that my doctor has all my records in his EMR, I have his cell phone number, and he can renew my prescriptions with a simple email request. I can’t imagine why more people aren’t doing this.
Alan Dappen says, “They just have to wake up out of the Matrix.”
**For more in-depth coverage of the rising trend in cash-only practices, check out MedPage Today’s special report.**
March 18th, 2009 by AlanDappenMD in Primary Care Wednesdays
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The U.S. government finally has announced intentions to become involved in our $2.2 trillion healthcare system. Now everyone wants to say something. Most longtime players in healthcare indignantly rebut any new input and opinions with “How dare you! … You stay away from my holy cow of entitlements (insured patients), or salary (doctors), or bonuses (insurance companies), or profits (pharmaceutical companies), or the ability to sue (lawyers.)”
I join my voice to President Obama’s statement that the single most important problem to solve in our healthcare systems is cost. The tidal wave of catastrophe rushing towards America is the expenditure of healthcare dollars doubling every 7-10 years.
Few will argue against the ideal of universal health coverage, yet this noble ideal comes with an enormous price tag and many less than honorable behaviors by all players in the system. The wasted and misallocated money lost every year in healthcare makes Madoff’s Ponzi scheme look like child’s play, and yet it continues. We finally have awoken the dormant giant of politicians to do what no one else says they will do, and the government’s intervention in the form of healthcare reform seems imminent.
Doctors were captains of the healthcare system until 1980s. They were dethroned because health care costs had doubled every seven years since 1945. Then insurance companies gladly took the helm. Guess what? After 20 year of their leadership, the price of healthcare has continued to double on average of every 10 years. Now the government is positioned to step in and fix it.
Big Brother might “force” each of us healthcare players to be held accountable including all of us as patients. This fear of change leads to finger pointing, name calling, blaming, grandstanding, and claiming, “Oh the ridiculous price healthcare … it’s not my fault and I shouldn’t have to change or fix it.” Nothing could be further from the truth. We all have to fix healthcare, and never forget, it’s about the price.
How do we create a health care system that provides the widest access, the best bang for the buck, the fairest distribution of money, and inflates at the same speed as the rest of the economy?
For primary care, two pathways are clear: the career path or the professional practitioner path. With the career model, doctors can work for someone else (like Kaiser, Medicare, an insurance company, or a hospital), and can expect a salary and benefits. In return, these employers oversee and influence how career doctors do their jobs, their hours, their interactions with patients, how they communicate with patients, and often what medications should be prescribed. We have 20 years of experience with the “career pathway.” We allowed others to interfere in the doctor patient relationship, help us ”manage” our patients, and decide what’s “reimbursable.” The soul of our work and the trust of our patients evaporated. Many believe this pathway will spell the extinction of the primary care “specialist.”
The other pathway is the primary care doctor as a professional, with a mission that focuses on the patient not just for quality, but for trust and price, and following these key objectives:
- Restoring the soul and viability of the doctor patient relationship,
- Delivering the highest quality care, and
- Restoring a pricing integrity which reduces cost.
This professional primary care doctor will restore the patient-doctor relationship with a modern office that is mobile, can be reached anywhere and anytime, has virtually no staff, minimal overhead costs, transparent pricing, and is powered through a customized software that finds the patient chart, instantly looks up any pharmacy or radiology center, can contact any specialist, can instantly look at differentials, drug interactions, gets notifications when patients have something “due,” has a large number of patient education resources that can be emailed to the patient including articles from the medical literature and refereed internet sites that can educate patients, and does all the billing from the same platform the moment that the note is closed.
An individual’s day-to-day health is not “best managed” under third-party payers. We need insurance or government to manage expensive problems or catastrophe, like cancer, serious injuries or ongoing health problems. Yet sixty years of conditioning has left most unable to see the obvious: extract the day-to-day care cost from the insurance model and return these funds to all Americans (about $700 billion/year), stop holding the consumer hostage, make doctors compete again for the consumer on price, quality, knowledge, access, convenience, relationship — just like every other service industry. Finally, bring an end the $20 co-pay mentality for the patient and “the funnel” for the doctor.
This is possible, and is being done today with the practice I founded, doctokr Family Medicine, (www.doctokr.com). Our patients pay out-of-pocket for all the primary and urgent care healthcare services they receive. We charge on a transparent time-based fee basis, where five minutes of the doctor’s time costs around $25. Our patients can contact or see us anytime, day or night, and consult with us via phone, email, in our offices or by house calls, with over 50% of all of our patients’ healthcare issues being resolved by phone or email. About 75% of our patients pay less than $300 per year for all of their primary and urgent care needs. We’ve built a relationship with each patient and spend as much time as they want with us.
In the weeks ahead I invite all readers and colleagues to consider the road less traveled. Consider primary care doctors standing-up, reclaiming their profession, embracing and being embraced by the American population. And imagine happier patients and doctors, healthier patients and that the delivery of that care costs 50% less than now.
Until next week, I remain yours in primary care,
Alan Dappen, MD
March 4th, 2009 by Dr. Val Jones in Primary Care Wednesdays
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By Alan Dappen, M.D.
What Goes On In the Back Office
“The Funnel” details how physicians’ must treat patients if they expect to stay in business. Herding patients through “The Funnel” is meant to depersonalize every problem into 10-15 minute slots. It’s not that doctors don’t care, in fact, morale on the assembly line of primary care is terrible. It’s just that there seems to be no solution doctors have found to sustain the financial realities they face under the insurance-driven system. I’d like to show you some cold hard numbers.
The healthcare system has been a gold rush of opportunity. In sixty short years the healthcare has brought wealth to lawyers, drug reps, insurance companies, malpractice coverage, transcriptionists, billing specialists, authorization departments, performance evaluators, and certification organizations, just mention a few. Each fill their niche, presumably to add value and quality to the service. As they’ve tagged along in the healthcare system, the patient’s $20 co-pay covers less and less, while a physician’s office pays for more and more. Those that are making money off of the healthcare system are often predatory, inadvertently driving up the cost to the patient, hence causing insurance premiums to double by 2016.
Below details the monthly expenses for a typical primary care physicians practice (not supporting obstetrics). Most of the expenses listed are in line with a those costs for running a typical business. However, what is alarming are the salaries for administrative, or non-physician, staff salaries, which consume about one third of the incoming money received. Many members of this staff are billing specialists needed to negotiate the ever-changing rules and regulations of the third-party insurance providers and receptionists, as well as schedulers and managers to get you into The Funnel.
Table based on both Medical and Dental Income and Expense Averages, 2004 Report Based on 2003 Data, published by the National Association of Healthcare Consultants; and expense records provided by doctokr Family Medicine.
Doctors, like all of us, can’t work for free, and want to receive a paycheck that will allow them to live comfortably, raise a family and pay off their large debts from medical school. Let’s say the above medical office paid their doctor a yearly salary and benefits of $162,750, the office then would need to bill $36,845 a month to stay in business. Since a doctor can only physically see patients a total of six hours per day (or 120 hours per month), this equates to a doctor needing to bill $307/hour to simply break even. At a more granular level, each minute costs the doctor roughly $5. Doctors have figured out that they can further reduce this per minute cost if they band into larger group practices.
But here’s the rub: the patient pays for 3-4 minutes of the physicians overhead (the $20.00 co-pay), leaving the doctor and his staff to bill and fight for every dollar they can make from the insurance company. Six hours of “patient care” translates to another four hours of uncompensated work while the physician completes medical notes, follows up with hospitals, specialists, and labs, answers patient call and prepares for the next day. The standard work week is 50+ hours before adding nights on call and weekend coverage which is done for free.
How do doctors survive? They employ billing specialists, they speed up their visits, they “upcode” their notes when possible. But most importantly, doctors deploy “The Funnel,” which brings us back to where we’ve started.
Until next week, I remain yours in primary care,
Alan Dappen, M.D.
February 18th, 2009 by Dr. Val Jones in Primary Care Wednesdays
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Dr. Val’s note: this post is Dr. Dappen’s continuation of “Sneaky Things That Doctors Do To Survive Financially.”
***
The Funnel
By Alan Dappen, M.D.
Back to the gridiron we go. Two powerful teams square off. It’s Team Doctors vs Team Insurance. You, the patient, the object of our affection, have bought entry to this game through two payments. The first serves as your season ticket, and is the $800/month fee (coverage for a family of four) that goes to Team Insurance. You gain admittance to today’s game through your $20 dollar co-pay, which is collected by Team Doctor.
The $20 co-pay is really a ruse to distract attention away from Team Insurance and the plays the Doctors are about to pull. In reality, $20 co-pay doesn’t come close to covering the cost of an office visit (more about this on a future posting). Team Insurance is supposed to make up the difference of these costs for Team Doctors. To stay in the game, Team Doctors must hit Team Insurance just right to cough up enough money to cover their bills. On the other hand, Team Insurance hits back, denying and delaying payment of claims from Team Doctors, pocketing plenty of money to keep their fans (share holders) screaming “We’re Number One.” The focus of this game is on money, with the patient distracted by the $20 co-pay, believing it is fair payment and the middle man (insurance) works in their best interest.
Now let’s look at “The Funnel,” the number one play Team Doctors use to recoup their money. Let’s say you have a typical medical problem and contact your primary care provider for help. You inadvertently have stepped into the playing arena. To get you the help you need, Team Doctors will run you through “The Funnel.” This formation is the most effective play used to sustain doctors financially. Keeping The Funnel packed to the brim with patients is critical to the success of a medical office, with this success hinging on seeing at least 25 patients a day and keeping the simple problems coming back to ensure the cash follows.
Here’s how The Funnel works:
1. Overloading: Also known as seeing patients for anything. Insurance companies will only pay primary care providers for a face-to-face visit, and not a phone call or email consultation. Ironically, 70% of typical day-to-day primary care problems can be solved by a phone or email conversation only. Doctors need payment from insurance providers to stay in business so only conduct office visits, no matter what the problem. Think back on some of your medical needs and how they were handled: Need a prescription refill? Need to ask a simple question? Need an antibiotic? Need to set-up or discuss a lab test? Need a follow up? Make an appointment to be seen. Welcome to the funnel!
2. Get the patient through as fast as possible: Keeping the flow rate constant through the funnel means limiting opportunities where patients can slow their transition through the neck of the funnel, possibly plugging it up, and thus slowing the doctors’ chance for cash. Four major strategies keep the pay/time ratio flowing properly for Team Doctors:
a. Ration the long visits, like a physical, by making patients wait 6-12 weeks to come in for them.
b. Divide and conquer the 20 minute visit. Invite the patient to stick to one problem per visit and then invite her to return to the top of funnel on another day for any additional problems.
c. Find ways to “increase value” of visits by requesting additional tests or services, like “How about we do an EKG?”
d. Turfing the “complicated (time consuming)” issues to other practices. Ever been sent to a specialist that your doc couldn’t solve your problem 10 minutes? This is why.
3. Get the patient to come back, as often as possible. Also know as a refilling The Funnel. Continuous, fast-paced repeat business is the most important measure of a financially solvent office. Imagine this: Medical partners who get to know their patients and consequently care for their well-being create liabilities if that caring takes longer than 10 minutes on average per patient.
I invite readers to write in their examples of being part of the funnel. Did the funnel compromise your care or inconvenience you? Why would the doctors run you through the funnel?
Lastly is the question: What can you do about The Funnel? Better understand the system, why the funnel exists and why it’s important that you, the patient, take control of not only your care, but how it’s paid.
Until next week, I remain yours in primary care,
Alan Dappen, M.D.
