Over at Are You A Doctor? I am referred to a bundling system which very well may change the way the business of health care is done in this country.
Prometheus as it's known.
This is the guiding principle of a pilot payment model called Prometheus, which, by January 2010, will be used to calculate insurance coverage for 80,000 workers in Rockford, Ill., and has already caught the eye of the White House. Why? Because it turns the current insurance reimbursement system on its ear.
I am a strong believer in the bundled payment model. It is a third party version of concierge care, which I think is an excellent way to practice medicine. Bundled care is not capitation in the classic insurance sense. It forces all parties involved to provide cost effective care in the most efficient way possible. It forces suppliers to cut their prices in cut throat competition. It squeezes unhealthy and bloated expenses from the current delivery system. It gets rid of the entire bloated fee for service billing and collection system. The article above discusses heart failure in a 60 year old slightly overweight gentleman with GERD and CAD. The algorithm has determined that this patient's yearly expenses should be $20,750. If the patient costs less to manage, the extra savings generate profit.
For bundled care to succeed, it must carry profit potential. Profit will always drive efficiency, and that's what this country needs. Profit in fee for service generates health care inflation. Profit in bundled care will generate the right care.
I believe, when done correctly, bundled payments lead to the most cost effective and efficient care possible. When given the the choice between fee for service vs bundled care, bundled care will always lead to less health care inflation. We have to accept that health care costs money. There is a moving continuum between doing too much and doing too little, between paying too much and paying too little. I believe that when priced appropriately, bundling provides the perfect balance. The key to success comes not in the failure of bundled systems to align all the forces (which it always will), but rather that the algorithms used to determine the bundled price adequately accounts for expense and profit potential.
Remember, if physicians have are unable to generate profit in the payment model presented them, they will walk away, leading to LOSE-LOSE for everyone. Bundling works when payment structure is modeled appropriately. If you find the right price, patients, doctors and government all win.
Why? Because the incentive will be to do less unnecessary care, not more. Many folks worry that the driving motivation to do less may mean that patients get less adequate care. In fact, if you think about this rationally, doing less care that may make a patient worse would increase the costs incurred by the physician by increasing complications. The physician has every incentive to provide the right care, even if it costs them money, to prevent future complications. It is the perfect way to align the forces of all parties involved.
And it will work in a WIN-WIN-WIN if paid for appropriately.
Physicians are also given enormous freedoms to create system processes that increase their productivity, reduce their overhead and further drive efficiencies of scale both within their office as well as within hospital systems. When given the freedom to innovate, I would not underestimate a physicians internal drive to maximize their income through greater efficiencies. Efficiencies that can only be created when you remove the archaic and destructive fee for service model.
Many current physician visits can be managed by nurses(or even a nurse tech, med aid) by phone, by email, by Twitter, or even a nurse office visit. Allowing physicians to concentrate their time on more complicated levels of care that their training allows them the latitude to dissect. I would not underestimate, by any means the billions upon billions of dollars of savings that could be generated, monthly, from increased physician productivity in the setting of increased access to care in a payment model that lets physicians decide what works best for them and their patients.
If we allowed physicians the creativity to induce efficiency in their practice, you would be surprised at how much greater productivity we could achieve per physician in this country. I know for a fact that the way I am forced to practice medicine would never be acceptable to any corporation in this country, corporations that find themselves accountable to their shareholders.
I am economically accountable to no one. The physician pen, it's been said, is the most expensive part of health care. And that statement holds true no matter where you go in this country.
Being economically accountable to no one is a terrible way to do business. But it's the way we are currently forced to practice. There are no winners in this current payment model. Except those that take advantage of it.
There are many different ways to bundle care. You can bundle care by disease. You can bundle care by doctor. You can bundle care across doctor and hospital. You can bundle care by regional districts, counties, cities and states.
Does it matter? Yes. The more aspects of care you can bundle, the greater the efficiencies. Patient care does not happen in a bubble. Whether you are in the ED, the primary MDs office, the subspecialist office, the radiology suite, the lab, the nursing home or the hospital, the more entities you can involve in the bundled model, the greater the cooperation, the greater the efficiencies and the greater the cost savings.
For example, there is little cooperation between hospitals, each looking to increase their market share in a community. If you can imagine one bundled payment for all hospitals within a county, district or locality, you would suddenly find both hospitals working together to increase efficiencies of scale, if not for any other reason but to maximize their own profits by driving down their operating expenses.
The larger the bundling, the greater the savings. I personally believe localities , (cities, counties) that bundle care between hospital, doctors, nursing homes, labs, radiology suites etc have the incredible opportunity to provide the right access without market saturation and achieve cost efficiencies that force suppliers to reduce their costs of everything medical.
Cities have the unique opportunity to drive innovation outside medical care by increasing access to trails systems, parks, community gardens, and other healthy lifestyle initiatives, that could be paid for with savings generated from decreased health care costs (both direct and indirect), increased productivity from reduced illness and greater tax revenue from a healthier more productive society.
Now, the question is are patients and physicians ready for a radical change in the way we do business? I think the answer is yes. I for one would welcome anything that would stop making physician a major part of the problem by being accountable to no one.
