A study in Minnesota compared the cost growth of retail clinics compared to the emergency department, urgent care clinics and physician offices.
Costs are all venues rose, suggesting the more providers in an area doesn’t necessarily lower costs. The axiom of competition lowering prices doesn’t apply in healthcare.
Physicians make up for lost revenue by simply doing more. There will always a demand for care, evidenced by universally long waiting lists. Ways to squeeze in more patients, and subsequently performing more tests, can always be found.
In the current physician payment environment, any threat to physician revenue can be responded to by doing more.
Congress is currently meeting to discuss alternatives to the payment system. Our friend Pete Stark actually gets it right in his statement:
The current payment system rewards physicians who increase the number or intensity of the services that they provide, irrespective of what is needed. This drives up spending. Unfortunately, spending growth has not been matched by an equivalent improvement in outcomes. Our recently enacted legislation provides a window of opportunity to look at how physician payment rates are updated. We need to use this time to examine payment system reforms that encourage better care coordination, higher quality care, and more efficient use of resources.
The typical answers bandied about are pay for performance or capitation/bundled payments.
Pay for performance has its own problems, discussed earlier this week.
That leaves capitation, which essentially is a fixed payment over the course of care. In theory, physicians and hospitals would be incentivized to provide to most cost-effective care in order to achieve maximal financial benefit.
This approach was tried in the 1990s, with sharp backlash from patients. Why? The American public likes unfettered access to tests and will push back against any perceived financial reason obstructing that desire.
That is why any movement towards a capitated payment model needs to be accompanied by a comprehensive patient education campaign to convince patients that too many tests are not in their best interest.
Related posts:
- Retail clinics don’t make money
- Retail clinics are not for patients with chronic disease
- Why doctors need to embrace retail clinics
- Flea on retail-health clinics
- The retail clinic era is over, and why pharmacy-based clinics are doomed to fail
- Regulating the retail clinics
- Are retail clinics living up to expectations?
{ 5 comments }
Fact: most people seen at retail clinics or urgicare do not need to be seen at all.
What did people do 40 years ago? “Take 2 aspirin and call me in the morning.” The fact is that most of the conditions treated at urgicare and retail clinics are either self limited, ie colds, or treated over the counter, ie poison ivy.
Urgicare and retail clinics do not lower costs. All they do, in a consumer driven world, is increase utilization. Furthermore, they undermine primary care doctors by “stealing” easy cases, leaving us with the 80 year old medicare patient with 20 problems. These clinics also present the doctors as the problem, ie “I don’t like my doctor because he did not want to see me at 8 pm for a cold.”
“…There will always a demand for care, evidenced by universally long waiting lists…”
That is only true in healthcare systems where patients and physicians are playing with other peoples money. My HSA and cash patients are very careful about the relative value of my recommendations. My BCBS and Medicare patients rarely care about value or cost.
There is a very real moral hazard to having so much of our healthcare prepaid or paid by others.
Was the purpose of retail clinics to save money, or to meet a demand for care that traditional providers weren’t meeting?
How about go back to the areas with retail clinics and see whether existing providers changed their offerings. Did they extend hours or open on a weekend? Did they, as one blogger describes, start up a service for 5-minute problems?
While competition might not result in cost savings if it shook up the way business was done with benefits to the consumer then it’s not a wash.
How about convincing some docs that they could do without ordering some of those expensive tests? At the urging of my PCP, I went to an allergist. She ran ~15-20 blood tests, at a discounted rate of ~$700. Adding on the scratch and patch tests, the allergist’s discounted fees almost covered my entire $1500 deductible. The result? Nobody knows what I’m allergic to, but the allergist really got excited about my thyroid antibodies being off the charts (LabCorp reference rate 1-7, mine were 3000). Stick a fork in it, I’m done.
Yet another post indicative of the failure of physicians to think like businessmen, or have any concept of the value of their time.
Who cares if costs at all venues rose? The question is did the patients pay more? And did they feel like they got better service? And did the physicians who staffed these clinics make more?
Here’s another problem:
“Physicians make up for lost revenue by simply doing more. There will always a demand for care, evidenced by universally long waiting lists. Ways to squeeze in more patients, and subsequently performing more tests, can always be found”
Kevin, are you really so blind as to see the ignorance of this statement? You are selling a service which is in high demand, but you think the answer is doing more work to make more money. And you’re hoping Congress changes that for you!
Who cares if the American public pushes back? The question is will your patients? Or will they value your time more, and your increased job satisfaction?
Think, physicians, think!
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