IN THIS ISSUE:
? Physicians Respond to Consumer Driven Health Care
? Health Benefits Reform Meeting in Washington
? Shadegg to Introduce CHOICE Act
? Herzlinger in Harvard Business Review
? Head in the Sand
Physicians Respond to Consumer Driven Health Care
Once again, I need to apologize for missing a week. I think you’ll understand when I tell you how busy things have been. First, we had an enormously successful briefing on Friday, June 18. We brought together six leaders of the new wave of physician practices under the banner “Consumer Driven Health Care – Physicians Respond.” The presenters included:
? Robert Berry, MD, of the PATMOS EmergiClinic in Greeneville, TN. Dr. Berry is wholly independent, takes no insurance, and serves a community of 16,000 residents in a county with only 60,000 people. He operates strictly on a cash basis, and while 51% of his patients are uninsured, the rest all have insurance coverage. He finds that by reducing insurance-induced overhead, he can spend more time with his patients, charge them affordable fees, and make as much money as he would working in a hospital ER.
? Alieta Eck, MD, of the Zarephath Health Center in Zarephath, NJ. Dr. Eck and her husband, John Eck, MD, founded this clinic using volunteer physicians and donated space. They have brought real medical care to a largely uninsured and low-income population. In New Jersey, it is impossible for anyone but the rich to afford coverage if one’s employer doesn’t provide it, thanks to the horrendous regulations in that state. The Drs Eck have even arranged inpatient services at reasonable prices at a local hospital, and are looking at facilities off-shore to serve more patients.
? Raymond Davies, PhD, Director of Business Development at SimpleCare/AAPP. This program has grown dramatically under the stewardship of Vern Cherewatenko, MD. It now includes some 24,000 patient members and 1,500 physicians, all of whom prefer to work on a cash basis (though some continue to accept insurance payments). They avoid CPT codes, preferring to charge by the length of a visit.
? David MacDonald, DO, President of the Liberty Health Group in Charlottesville, VA. Dr. MacDonald was a cofounder of SimpleCare and is now spreading the word through a new company. He reports that the physicians he works with spend more time with their patients, have more time with their families, charge less than they did ten years ago, and make as much income as before – all because of dropping out of insurance programs.
? Tom Reed, Chairman of Personalized Physician Care (PPC) in Naples, FL. Mr. Reed said that the physicians he works with are serving almost entirely a population that is well-off and on Medicare. PPC charges an annual fee to deliver services that are not covered by Medicare or most other insurance companies. The result is a lighter patient load, better service, more accountability and much greater satisfaction for both physicians and patients.
? Marcy Zwelling-Aamot, MD, Choice Care, Los Alamitos, CA. Dr. Zwelling recently switched to a retainer medicine practice so she could spend more time with and provide better care to her patients. She had meetings with her patients to explain the change, and 75% signed up within a week. She says, “It’s all about choice – choice of physician, of care plan, of hospital, and of medication.”
From the poorest to the wealthiest and everywhere in between, these physicians are serving their patients better by rejecting insurance company rules and restrictions. Let’s hope the insurance companies are listening.
SOURCE A webcast, copies of the slides and bios, and a transcript are all available at: http://www.kaisernetwork.org/health_cast/hcast_index.cfm?display=detail&hc=1174
Health Benefits Reform Meeting in Washington
These physicians stayed over Friday night for a meeting of the Health Benefits Reform List at the Hotel Washington on Saturday, June 19. They were joined by a mix of brokers, attorneys, economists, and Hill staff for a roundtable discussion of the next steps needed to move to a consumer-based health care system.
Madeleine Pelner Cosman, PhD, Esq. gave an enlightening presentation on “Unshackling American Medicine.” She explained how over the years increasing numbers of laws have been enacted subjecting physicians to criminal penalties for acts that in any other context would be considered civil torts. Physicians are often sent to jail for mere billing errors or disagreements about the level of medical necessity of a particular procedure.
Grace-Marie Turner outlined for the group the plans for a new Galen Institute initiative – the Consumer Choice Community. This Community will bring together activists from every field and every part of America to work together to advance consumer-based health care. The Community will focus mostly on changing the way Americans think about health care and health care financing, to move the country from an entitlement to an empowerment mentality.
We also heard from Tom Miller, Esq. of the Joint Economic Committee, Scott Nystrom, PhD from the Senate Special Committee on Aging, and John S. Hoff, Esq. a Deputy Assistant Secretary at HHS. The meeting broke up too soon and the conversations continued long after the official adjournment.
SOURCE: For more information on the Consumer Choice Community, click here: http://www.galen.org/cccintro.asp
Shadegg to Introduce CHOICE Act
Congressman John Shadegg (R-AZ) is unveiling a new bill this week intended to restore the right of Americans to shop for insurance coverage across state lines. At this writing, the bill doesn’t yet have an HR number, but it is called the “Creating Healthier Options in Insurance through Choice and Efficiency Act” (CHOICE), and should be searchable on Thomas. The bill would enable individuals to purchase insurance coverage that is regulated by another state, much as the Interstate Commerce Clause of the Constitution envisions. It should go a long way to restoring competition in insurance markets and encouraging insurance companies to become more innovative. The bill is being introduced at a press conference on Wednesday, June 23, featuring House Speaker Dennis Hastert.
SOURCE: More information about the bill should be available at http://thomas.loc.gov.
My statement on the CHOICE Act: /assets/ChoiceAct.pdf
Herzlinger in Harvard Business Review
In the last issue I briefly mentioned an article by Michael Porter and Elizabeth Olmsted Teisberg that was published by the “Harvard Business Review” and reviewed by the “Boston Globe.” It’s an interesting piece with many worthy ideas, but like many academics, they tend to default to government control when they don’t have an answer to a particular problem. The authors object to the large “discounts” hospitals give to payers that have no economic justification. They call for price transparency, but aren’t sure how to make that happen, so they want the federal government to regulate it. They aren’t sure that people will buy adequate coverage, so they want the federal government to “mandate a minimum level of coverage.” They worry that some people may choose not to buy coverage at all, so they want the “government to require health coverage for all.” Academics seem to feel they must have all the answers, and if they don’t have the time or interest to deal with some aspect of a problem, they say “let the government do it.” They completely miss the power of an engaged citizenry, working through market mechanisms, to solve problems in a decentralized fashion.
The better paper in the same volume is one by Regina Herzlinger, “Let’s Put Consumers in Charge of Health Care.” Reading Professor Herzlinger’s debate of the issue is like watching Muhammad Ali box in his younger days. She sets up her opponent with lightning jabs and then delivers an uppercut that puts him on the floor. In this case, she says, “The idea of putting consumers in charge of health care rubs many in the health care establishment the wrong way? (but) underestimating the intelligence of consumers is nothing new?.” She says, “When consumers apply pressure on an industry, whether it’s retailing or banking, cars or computers, it invariably produces a surge of innovation that increases productivity, reduces prices, improves quality, and expands choices.” And this is the reality that Porter and Teisberg miss in their article.
SOURCE: It costs $16.95 to download this collection, but it is well worth the money. http://harvardbusinessonline.hbsp.harvard.edu/b02/en/common/item_detail.jhtml?id=6956
Head in the Sand
Speaking of the health care establishment, I gave a presentation to some CFOs of major hospital chains in Chicago last week. I will be writing a lot more about this in the future, but I want to share some quick impressions with you. During the discussion after my presentation, one of the executives asked, “Do we have our heads in the sand?” That is an understatement. These folks were celebrating the regulatory “barriers to entry” that keep out competition. They defended consolidation and centralization of their industry, arguing that information systems require it (huh?) They are terrified of having to talk to their customers about prices or about collecting bills. They dismissed the criticisms of overcharging the uninsured and self-pay patients as a plot by insurance companies. They think they can ignore KB Forbes by accusing him of being sponsored by Pat Rooney. They are worried about Dick Scrugg’s lawsuits, but don’t have a clue what to do about it. I don’t have any paper on all this yet, but in case you are similarly delusional, there’s a link to “The Wall Street Journal” article on the Scrugg’s suits below.
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