Creating the Practice for the Future

Abstract

The transition into the next era of medicine has placed the US health care system in an awkward and ironic moment. At a time when the country faces its greatest need for its physicians to rally to the cause of restoring, protecting, and growing the health of its citizens, the health care system remains antagonistic to physicians. At a time when the country needs more doctors than ever to serve its aging and ailing population, the health care system has made it difficult to choose the practice of medicine as a career. The preservation and elevation of the independent physician in modern society is opined here as a national imperative that has been ignored at risk to the health of the nation.

“The real payers for health care want more health—and a lot less medicine.”

A Path to the Future

Most doctors would be surprised to learn the spectrum of options that lie before them, just beneath the surface of the difficulties of the system in which they exist. In fact, there are just enough cracks in the flawed design of the American health care system to allow physicians to create thriving independent practices by creating health in their communities. While the free market in America’s largest industry is suppressed, it is far from dead. The voice of the consumer in health care is growing louder by the month. With every leap in insurance premiums, deductibles, and maximum out of pocket medical expense limits, the real payers for health care grow hungrier for quality and value in health care. As their individual liberties to choose their providers and approaches to managing their own health are constricted by ever-narrowing networks and coverage, consumers are searching for doctors who think and operate differently—uncensored and less restricted by the perceived heavy hand of the system.

As the growing burden of chronic disease weighs heavier on families across the country, people are becoming disappointed by the notion that the best they can hope for from the health care system is “disease management.” The most powerful voice in the American economy is finally beginning to speak. The real payers for health care want more health—and a lot less medicine. Independent physicians need to embrace the growing enlightenment of the modern health care consumer and reinvent their practices to serve this new generation of patients.

Focus on Value Before Payment

When asked to contemplate an overhaul of their medical practices, many physicians immediately envision their lives unencumbered by the third-party payer system. However, to prosper in the next era of medicine, physicians must challenge themselves to remain focused foremost on the needs and desires of patients as they formulate their visions for the future of their practices. The reason is simple. In the next era of medicine, the patient is the payer.

This reality is understandably difficult for many patients and physicians to accept. Consider the increasingly common 42-year-old patient with a $5000 deductible. Barring a medical catastrophe, she is, for all practical purposes, a self-pay patient hidden behind a pricy insurance card. She is confused by her monthly premium, and the hype of first dollar coverage for “preventive care” has her reconsidering the usefulness of her insurance card’s usefulness in the office of her primary care physician. Meanwhile, doctors maintain the historic necessity to submit claims to her insurance company in order to be paid.

After a visit for her sinus infection, the doctor endures the expense and administrative burden of submitting a claim to the insurance company. She leaves the office assuming the thousands of dollars she spends on insurance have been finally put to use. The charge passes through the insurance company, placing a drop in the bucket of her $5000 deductible, and boomerangs back to her mailbox having been transformed into a confusing notice to pay the doctor herself.

Having learned from experience that these notices can be either erroneous or forgotten over time, she makes no effort to pay—choosing instead to wait and see if anyone is actually going to try to collect. Any ethical dilemma is quickly resolved by recalling the small fortune she is spending for her health insurance. She does not think about the fact that this places a renewed burden on her struggling doctor’s office to chase her for the money. She does not recognize the fact that this process only drives the practice further toward its nearly inevitable collapse into the waiting arms of a hospital system—after which, her appointments will only get shorter and, strangely, her odds of being hospitalized will jump dramatically.

How much easier (and cheaper) would it be if they both simply accepted the oxymoron that largely characterizes the population younger than 65 years? She is an insured, self-pay patient.

Reshaping the Future for Doctors and Their Patients

As they reinvent their practices, doctors must embrace this reality and focus, like other entrepreneurs, on creating remarkable value for their customers. Then, when they marry this vision to a business model, they will discover that they can provide far more value at a lower cost by contracting directly with patients. From this realization has sprung the increasingly popular concept of “direct care.” A world in which the patient is also the payer invites physicians to resume their roles as innovators and scientists. The central focus governing the future of their practices and careers becomes the delivery of real value, which in medicine, equates to the creation of health.

For one simple reason, the physicians best equipped to accomplish this have (or will have) studied functional and lifestyle medicine. The most efficient way to restore and manage health is to treat the causes of disease, rather than to engage in the endless battle of managing the effects (symptoms) of disease. Functional and lifestyle medicine provide a structure and framework to enable physicians to find and address the root causes of illness.

From the foundation of this training, physicians can be creative in the design of their practices and value propositions for patients. Several key principles should serve as guideposts along the way.

1. Provide what consumers know they want: While consumers do not understand the full potential of what modern medicine has to offer, and generally do not yet know to ask specifically for more health rather than more medicine, they have a few strong and clearly articulated desires that physicians must take into account as they reinvent their practices:

2. Price transparency

3. A root cause–based approach to managing health

Contract directly with patients: What would a house or a car look like if the only things their owners did to care for them had to be covered by auto or homeowners insurance? To witness the effects of this type of thinking applied to the care and maintenance of the human body, simply observe the steadily declining health of the American population. Americans must be awakened to the intended purpose of insurance. Quite simply, it is a financial arrangement designed to protect people from financial ruin in the unlikely event of something like a house fire, a terrible car accident, or a stroke. It plays no constructive role in primary care—nor should it. There is no risk associated with primary care. Everyone needs it. And the cost of primary care is too small to threaten people’s financial stability. Therefore, insurance as a means of payment for primary care services only creates cost, friction, and misaligned incentives.

Align the financial structure with the desired consumer behavior: When afforded the opportunity to do away with the third-party payer system in their practices, many physicians flow naturally to the conclusion that they should contract with patients in the same fashion that attorneys, electricians, and plumbers contract with their customers—billing by the unit of time. Others conclude that they should charge by the unit of service (ie, visits and procedures). While these approaches are familiar and seem perfectly sensible at first blush, in medicine—particularly primary care, there is an opportunity to use this financial structure to adjust the way patients behave within the relationship. A preferred structure for many practices should be that of a membership. The key attributes supporting the use of membership models by physicians are:

When patients pay by subscription, they do not have to be charged for every encounter with the practice. Membership models tend to move money to the backdrop of patient interactions—often setting the stage for a deeper, and more trusting relationship between doctors and patients.

Unlike transactional, fee for service structures, membership models generally imply an ongoing, renewing relationship that is ideal for most doctors and patients.

By removing transactional cost barriers and thoughtfully creating certain membership entitlements, patients will engage in preventive and educational services provided by the practice that they would not have seen fit to purchase as stand-alone offerings.

In a membership model, the practice always knows the precise number of patients for which it is responsible—preventing the inevitable overcrowding that degrades service quality in busy, fee for service practices.

Conclusion

The next era of medicine will reward the visionary physicians who recognize and act on the powerful intersection between their functional and lifestyle medicine training and their right and ability to contract directly with their patients.