I think he is describing case billing, where one charges a flat rate for the care of a sick patient and provides whatever professional services, labs, hospitalization, re-hospitalization, etc is required.

I think McCain is saying we need to the free the system up to experiment a bit with different market models. An example would be for a hospital to set up a diabetic program and then charge a flat rate per annum for for all diabetic patients who enroll, covering routine care and complications.

This is done by at our local Ob facility as so many are uninsured–go and pay the flat rate early in the pregancy and it covers the doctor, the hospital, and complications—in effect insurance for a specific episode.

Normally the marketplace would generate these kinds of experiments but there is very little of the free market in US healthcare now and the providers play by the rigid rules of goverment and private insurers. The CPT code system itself is a fixative.

Capitation simply ran down. As rate competetion escalated it got down to who could best keep sick people off their panel, not answer there phones, and otherwise avoid providing care. With case rates, people will at least be selling to sick people. Now whether they will really give the care needed, I imagine will be variable. I can see the same kind of games unfolding there.

The bottom line will always be the professionalism of the decision makers, whether MBA’s or MD’s. I’ll take my chances with the MD’s, although they bear watching, however much they may resent it.