A Pioneer in 'Flat-Fee Primary Care' Had to Close Its Clinics

http://www.npr.org/sections/health-shots/2017/06/20/533562142/a-pioneer-in-flat-fee-primary-care-had-to-close-its-clinics-what-went-wrong

by happy-go-lucky • 9 years ago

92 113 9 years ago

npr.org

RcouF1uZ4gsC• 9 years ago

I think there is a selection effect. It mentioned that losing some of it's large corporate customers was a big issue. When you sign up a bunch of employees that get this service through their employer, chances are good that most of the people will underutilize the service - thus you have a good profit. If you lose that, and now a lot of your customers have subscribed individually, there is a good chance that they will overutilize the service - after all they paid good money for a reason. Thus your profits will decline.

mjevans• 9 years ago

I suspect that reason might (often) actually be that they are in less than average health and selecting the correct 'plan' for them.

The insanity is forcing patients to compete for health plan coverage. We'd all be better off with a single payer system and locality based dutch-auctions for figuring out who provides the care.

Also, can I please have Dr. Watson (or similar) take actual inputs and determine if further tests are necessary to confirm or reject a diagnostic result? I still want an actual doctor to make the final check on the results, but I'd rather have an algorithm make the guesswork less dependent on one person knowing -everything- (that's what computers are for).

tpeo• 9 years ago

What you're describing looks a lot like adverse selection.

douche2• 9 years ago

When people have skin in the game, they make different decisions than when they are spending other people's money.

lotharbot• 9 years ago

as a patient, Qliance was a phenomenal experience, and easily worth the cost. (I no longer live in the area, but am with a DPC practice where I am now, which is of similar quality.)

I wonder if the problem with losing their big employers was that it changed their patient demographics too sharply and suddenly.

esaym• 9 years ago

If they are talking about "direct primary care", then there are still plenty to choose from: http://www.dpcfrontier.com/mapper/

Animats• 9 years ago

Kaiser offers "flat fee primary care", and they do OK. But they have experience at running that kind of business.

narrator• 9 years ago

I love Kaiser. They are so ridiculously efficient compared to all the other health care providers I've had over the years. Doctor's being salaried and paid by the hospital and the hospital chain being the insurer is really the way it should be everywhere.

oldandtired• 9 years ago

A former travelling companion (on a long distance train trip) moved from Head of R&D for an advertising agency into working in the medical technology industry. After six months or so, he returned to his former job of head of R&D at the advertising agency. When quizzed by the staff at the advertising agency as to why he came back to such a corrupt industry. His comment was that advertising were little children in terms of corruption compared to the medical technology industry.

I had a long discussion with him about what he had seen. He made the statement that every company that he saw would increase their prices for any product that was being sold into health care by at least a factor of 10 over what they would sell the same product for to non-health care areas.

I, myself, have had other conversations with various people (in both drug companies and medical institutions) and it has been common for comments to be made as to the vast difference between drug production costs and the final retail sale prices (even taking into consideration all the development costs, I have seen some of these figures and they are, well ....).

Health care is as exorbitantly priced as legal consultations and representation and the value received is in many ways far less than what you would receive by going to Macca's.

kingkawn3• 9 years ago

Straight up exploitation of people during their most vulnerable moments.

fredley• 9 years ago

The free market is a poor model for providing healthcare. In an ideal free market, market forces work to find the optimum price for a product, depending on how much it costs to create the product, and how much people are willing to pay for it.

In healthcare, though, how much people are willing to pay for a product is anything, if it's the one thing they need to stay alive, or to reduce chronic pain, etc.

brightball6• 9 years ago

It's not. People don't see the prices. It's whatever the insurance company can be convinced to pay. People don't get to pick their insurance plan either because it's locked into corporate contracts for the employees (for most people). This model happens because the government allows companies to tax deduct the cost of health insurance as a benefit but not individuals...which happened from union demands.

When people are totally removed from the cost, people aren't being exploited. Removing people from the cost increases the cost.

douche2• 9 years ago

There's also a lot of stupid shit that you need to have a prescription for that you ought to just be able to go out and buy. Case in point, my dad has a CPAP machine for sleep apnea, and it stopped working a few months ago. You'd think something that is conceptually similar to a vacuum cleaner operating in reverse with a mask on the end would be something that you could just go find on Amazon and have shipped to you in two days, but no, you have to do the dance of the different doctors first, then wait more weeks for it to be shipped, then wait even longer for them to schedule an appointment to pick up the damned thing. It's completely absurd.

tertius10• 9 years ago

Self-diagnosis may be the reason for something like that?

I agree that it's silly in general though.

tim333• 9 years ago

You can get them on Amazon.co.uk. Different regs I guess. https://www.amazon.co.uk/Carejoy-Quality-Screen-Portable-Mac...

crusso5• 9 years ago

factor of 10 over what they would sell the same product for to non-health care areas

That's a key statement.

So these same people charge less for the same product in other fields.

Why?

The reason has to do with the construction of the healthcare industry. Lots of regulations. Lots of middlemen. Laws designed to destroy innovation. Very little transparency for costs and outcomes.

fao_2• 9 years ago

The reason has to do with the construction of the healthcare industry. Lots of regulations. Lots of middlemen. Laws designed to destroy innovation. Very little transparency for costs and outcomes.

Or the reason has to do with the fact that the people that need these treatments are willing to pay any price for it because their life literally depends on it.

I don't see why regulations, and laws "designed to destroy innovation" (i.e. keep people safe from bogus drugs) are a bad thing. (Of course lack of transparency and middlemen are bad). Almost all of the regulations in the medical industry are for ensuring people are safe, and do not succumb to drugs that are no more effective than a placebo.

I think one of the main reasons why the price is artificially inflated is because of the patent laws in this area. Capitalism itself has various safeguards to ensure that the cost does not get too high for people to buy it, and to ensure that monopolies do not grow, but it seems that we have actually created laws (patent laws, mainly) that circumvent these safeguards.

tertius10• 9 years ago

Why? Because the market will bear it. Simple.

1812Overture• 9 years ago

It has nothing to do with that. It's because the person making the purchase decision isn't the person paying. Usually the doctor and the patient will have no idea how much money is actually changing hands behind the scenes.

afpx• 9 years ago

For all the big talk that US republicans do on 'regulations' I'll only take them seriously if and only if they deregulate the health care market. The regulations only enable a demand-heavy, supply limited market which jacks prices to crazy levels (ever try to buy CPAP equipment?).

On the flip side, without some sort of oversight, reporting, and rational tort-enforcement, I'm sure the slimiest of vendors would overtake the market.

maxerickson5• 9 years ago

The focus on discussing regulations in terms of "more" and "less" is a big problem.

Things like whether a regulation is well targeted, whether the costs it imposes are reasonably related to the benefit it provides and so on are much more interesting.

AdmiralAsshat• 9 years ago

It doesn't surprise me.

I did several weeks of physical therapy for back pain. The PT suggested that I get a TENS Unit for pain. She said, "It costs about $800, but don't worry, your insurance will cover it with no copay to you."

Additionally, the pad refills were free and paid by insurance (they stop being adhesive after so many uses). And so for several months I had sales rep calling me once every few weeks, asking if I needed more pads. Again, it cost me nothing, so I'm sure this is a useful service for senior citizens who otherwise might run out--but I'm also positive that this guy was massively upselling the stuff to insurance, or he would not have been so persistent.

I spoke later to my parents, who also had one, and asked them where they got theirs. They said they paid about $50 at Wal-Mart. A cursory look on Amazon reveals similar pricing.[0]

I don't care how much more effective the professional-grade one is, I doubt it could be 20x more effective, and yet it is 20x the price.

[0]https://www.amazon.com/s/ref=nb_sb_noss_2?url=search-alias%3...

tzs• 9 years ago

Prescription drugs are often similar. I don't know how much the pharmacy charges the insurance company for these drugs, but on my insurance I had to pay a $20 copay for metformin, simvastatin, and carvedilol.

Then I found that if I went to Walmart I could buy metformin and carvedilol for $4 each, and I could get simvastatin for $8.50 if I used a GoodRx coupon.

I was also paying a $20 copay for a 120x50mcg bottle of fluticasone propionate nasal spray. I have since found out that I can buy a 5 bottle pack for $35 from Amazon, with no involvement from insurance.

TuringNYC• 9 years ago

Anyone have insights on how Go Forward Health (https://goforward.com/) is doing? I love their concept, to the extent I almost want to work there. However, I wonder if such services would suffer from an adverse selection problem -- their current cost of $149/mo seems almost free these days -- how do they manage high-volume users?

jtokoph• 9 years ago

Just took a tour of the facility a few weeks ago. During the hour (or more?) we were there, nobody came in or out. I think their issue is just getting users at all; so high-volume users would be a great problem for them to have at this point.

They are trying to sell users on the fact that they are a tech company just as much as a medical service. But from what I saw they have a "Body scanner" (glorified scale that also gets height, O2 and pulse) and a bunch of iPads built into the walls.

EDIT: Also wanted to mention their trickery with pricing. They bill annually. The rep will tell you that they have a special promotion where you can sign up for the monthly plan if you sign up shortly after your tour. But the "monthly" plan still requires you to pay an early termination fee of 50% of the remaining annual balance.

Simulacra• 9 years ago

I wonder if unlimited consumption because it's unlimited is more of an American phenomenon. Everything from buffets to unlimited mobile useage, we seem to really love unlimited and we use it pretty aggressively when we can. I wonder why this clinic did not put some controls on things; please correct me I did not see that in the article.

alkonaut2• 9 years ago

"some health care analysts are questioning whether the approach to medical care is valid and viable."

Perhaps just stop trying to figure this out from scratch, look at any of N countries where healthcare is just a solved background issue?

Yes there are issues with people overusing services that don't have an associated cost for usage, and many similar issues.

But every damn country in the world has been adjusting the parameters of healthcare such as per-visit costs, healtcare budgets vs. queue time, expensive treatments vs death-panels etc for usually at least half a century now. These are solved problems.

Shivetya• 9 years ago

sure, but the politicians and such here don't want to solve the problem, or should I say follow the example of other countries. They will regularly cite other countries of how we are failing then comes the litany of "buts" when confronted with issues seen in those countries. The "but litany" is how their solution will fix all raised issues or provide coverage not seen elsewhere for less and better.

which in the end results in nothing getting done as the problems cannot be agreed to. so its mostly hyperbole to claim it is a solved problem. even in nations with free healthcare problems exist, it just depends on what you want to ignore as a problem

refurb• 9 years ago

I come from Canada and I would say healthcare is not "solved" by any means. There are constant struggles with wait times, growing budgets and allocation of limited resources.

There is no magic solution. I do agree that the US should look to other countries for ideas though.

alkonaut2• 9 years ago

Well it depends on the definition of "solved". Having a system where people have access to decent healthcare and it doesn't ruin public finances I mean.

I keep twisting the thermostat a bit but I consider building heating to work in the "solved problem" sense

Public healthcare will never be perfect.

timthelion5• 9 years ago

Meanwhile in the Czech Republic, for caa 50$ a month (for a person making minimum wage, it's double that for median wage workers) there is no copay on anything and the insurance covers everything including sex change surgery (but not facelifts and dental)...

vxNsr• 9 years ago

I always chuckle when I see people compare what amount to 3rd world countries with the US system, my mother was trained and worked in Moscow's largest hospital. The shenanigans that went on there, the level of training and expected knowledge of staff, the baseline expected standard of care all don't even hold a candle to what she had to reach to be considered competent in the US.

On top of that I don't know if this applies to CR as much as other European countries, but homogeneous populations really are easier to care for and create actuarial tables around than the stew of the US; when people bring Sweden with its <50 million pop of white people with very similar ancestry to prove their method might work, they ignore how medicine and the whole industry actually is practiced (and needs to be practiced). Let's wait 20-30 years now that they've taken in 1.5 million refugees from a very different background who are projected to grow 3x faster than the current population before we start trying to emulate unproven theories.

germanier2• 9 years ago

Then take a look at other countries: The German system was introduced 130 years ago[0], survived multiple forms of government, two world wars, the incorporation of a former socialist country, multiple waves of immigration, and still provides excellent care. It just works.

(And modern medicine is not yet at a level where ethnicity is a relevant factor when deciding treatment options.)

[0]: By highly conservatives by the way, to fight the rising social democrats

timthelion5• 9 years ago

I honestly don't know how mixed ancestry and the difficulty of producing actuary tables actually affects whether a system can function. Statistically, over a population of that size, it is a wash and the worse that can happen, is that there would be a procentual change in the overall cost. Furthermore, the French have had a mixed populace for many decades [1] and their system still works (though it is different than that of the Czech Republic and Germany).

The Czech Republic places 33rd by life expectancy, behind the US by just half a year [2], so if the health care in Czechia is on the level of a 3rd world country than so is the US'.

[1] https://en.wikipedia.org/wiki/Demographics_of_France#Before_... [2] https://en.wikipedia.org/wiki/List_of_countries_by_life_expe...

dr_• 9 years ago

The affordable care act has enrolled millions on to some kind of health insurance plan. Even if you are stuck with a high deductible plan, oftentimes that annual check up (preventive care) is fully covered without requiring a deductible payment. And, of course, if you are on Medicaid - you have Medicaid.

If you are relatively young and/or healthy, that's all you would really need.

As a result, their patient population likely gradually dwindled.

I was a proponent of dpc at one point but, now enrolled in a high deductible plan myself, i don't see as much need for it personally. I'd rather take the money and throw it into my health savings account and use it when i need to.

distances2• 9 years ago

Being from Europe, the concept of annual check ups sounds very wasteful. Is this what everyone does in the US?

As far as I see it, schools should teach enough to keep you in a good baseline health and doctors are available if something comes up. What is done in a normal annual check up?

lr4444lr2• 9 years ago

They test for the symptoms of serious chronic health issues: blood pressure, urinalysis, blood sugar, cholesterol levels/ratios, joint reflexes, retina appearance, manual check for swollen tissues... things that might signal underlying conditions.

losvedir• 9 years ago

Wow, I had no idea this wasn't a universal thing! Thanks for asking the question. From some brief Googling, it seems Canada also recommends against an annual health check, and I saw an article in NYTimes arguing against them, too. Fascinating.

DBNO• 9 years ago

For me, I use my annual checkup to get data (i.e. lipid and comp panels, etc, hearing test, electrocardiogram, urinalysis) on myself so I have a baseline of what the data looks like when I'm healthy. Everyone has slightly different baselines, so it's nice to have a better picture/time-series of mine.

Edit: I pay for the additional blood panels

maxerickson5• 9 years ago

Lots of people don't do it.

I guess a minority by population. I needed to make an appointment a couple years ago and the woman on the other end of the phone didn't really believe me that I didn't know where my medical records would be (in the past 10 years I'd had some stitches and a tetanus shot).

ams61102• 9 years ago

I haven't been to a doctor for a "check-up" since I was a kid. Probably been nearly four decades now.

I think for growing kids it's probably a good thing -- if nothing else to be sure you're on schedule for various vaccines.

As an adult, I have regular dental care but I do not see an MD unless I am sick or injured. And "sick" does not include colds/sore throat -- there are good OTC meds for that.

For most people, if you feel "normal", aren't gaining or losing weight unexpectedly, don't tire more easily than normal, your blood pressure is OK, etc. your health is likely fine.

germanier2• 9 years ago

In Germany everybody over 35 is advised to do such a check-up every two years, plus a bunch of different cancer screenings and twice-yearly dental examinations. I would say about a third of the people actually use those offerings.

rincebrain• 9 years ago

It seems to vary between two extremes - people who do it and people who will only reluctantly visit a doctor when at death's door.

I think the former stems from annual checkups in childhood.

Some insurance providers/employers, I suspect for preventative reasons against the latter category above, have started incentivizing annual physicals, so this may shift, but the whole US healthcare system is in such flux I wouldn't put money down on any outcome.

ada1981• 9 years ago

You may want to screen / sort customers based on Attachment style.. it's been found folks with anxious attachment visit the doctor more often and use more resources - but they visit for things that are non-issues, basically they are going for the relationship.

timthelion5• 9 years ago

In Czechia, where there is no co-pay, for a while, a co-pay of $1 was instated, not to help pay for services, but to "prevent seniors from comming just to chat".

driverdan• 9 years ago

A recent EconTalk episode covers the history of this type of system in depth: http://www.econtalk.org/archives/2017/06/christy_ford_ch.htm...

It was widespread until insurance companies forced them out of the industry.

ams61102• 9 years ago

If a straight fixed fee was encouraging people to overuse the service, why not tweak it and try a fixed base fee plus a modest per-visit fee?

A Pioneer in 'Flat-Fee Primary Care' Had to Close Its Clinics

Related Stories