A country doctor’s proposal for health insurance reform

In the forty years since I started medical school, I have worked in socialized medicine, student health, a cash-only practice and a traditional fee for service small group practice. The bulk of my experience has been in a government-sponsored rural health clinic, working for an underserved, underinsured rural population.

Today, I will make a couple of concrete suggestions, borrowing from all the places I have worked and from the latest trends among the doctors who are revolting against the insurance companies by starting concierge medicine and direct primary care practices.

Because I am a primary care physician, I will mostly speak of how I think primary care physicians should be paid.

I will expand on these concepts below, but here are the main points:

  1. Have the insurance company provide a flat rate in the $500 per year range to patients’ freely chosen primary care provider, similar to membership fees in direct care medical practices.
  2. Provide a prepaid card for basic health care, free from billing expenses and administration.
  3. Unused balances can be rolled over to the following years, letting patients “save” money to cover co-pays for future elective procedures.
  4. Keep prior authorizations for big-ticket items, both testing and procedures, if necessary for the health of the system.
  5. Keep specialty care fee-for-service.
  6. Have a national debate about where health care ends and life enhancement begins and who should pay for what.

Health insurance needs to be simple to understand and administer. It needs to promote wellness, and it needs to remove barriers from seeking advice or care early in the course of disease. It needs to empower patients to use health care services wisely by aligning patients’ and providers’ incentives.

Health insurance should not be deceptive. It should not promise to pay for screenings (colonoscopies and mammograms) and stop paying if the screening reveals a problem (colon polyps or breast cancer). It should offer patients the right to set their own priorities for their health while demanding concern for our fellow citizens’ right to also receive care.

Health insurance is not like anything else we call insurance; all other insurance products cover the unexpected and not the expected. Most people never collect on their homeowners’ insurance, and most people never total their car. Health insurance, on the other hand, is expected by many to be like a bumper-to-bumper warranty that insulates us from every misfortune or inconvenience by covering everything from the smallest and most mundane to the most catastrophic or esoteric.

What would it look like if Johnny or Fido puts mud prints on the living room wallpaper and Dad makes a claim on his homeowner’s policy? Or if Sally spills chocolate ice cream on the beige upholstery of mommy’s new car and the auto insurance has to pay to have the seats recovered?

In today’s health care, everything is potentially a covered service, and there are no incentives to limit one’s claims against the insurance companies. I believe we need to make patients view health care spending as their business, and the money as their money.

My proposal for payment reform in health care can work in a single-payer system or with multiple payers, both public and private insurers.

Have the insurance company provide a flat rate to patients’ freely chosen primary care provider, not the $3 per member per month we used to get from the HMOs of yore but real money. Something in the order of $500 per year would be more reasonable for the primary care physician to manage a patient’s health care. This would cover maintenance of a patient-focused and updated medical record, care coordination, management of medication and communication issues, access to medical triage and treatment capacity and one yearly visit for personalized screenings and care planning. For a panel of 1,500 to 2,000 patients, this would bring in $750,000 to $1,000,000.

Keeping in mind that the annual per capita health expenditure in this country is $8,500, that would gobble up a mere 5.9% of the pie. The billing for this would be very simple; just a head count multiplied by the monthly fee. For comparison, physician practices in the United States now spend $82,975 per physician per year interacting with payers, according to the Commonwealth Fund. Roughly speaking, that means doctors spend more than one hour every day working to pay the billing department and to do the free work we perform for the insurance companies. Imagine the improvements in patient service an extra hour a day per physician would make possible.

The advantage with this kind of system is that it would promote shared resource stewardship between doctors and patients. Primary care doctors would be incentivized to maintain large enough panels of patients to get the basic funding, but they would need to maintain patient satisfaction with their service in order to keep that funding.

Like cash-only direct primary care practices, with a financial foundation covering basic operating costs and with elimination of billing expenses, practices receiving insurance money up front can keep the total visit costs low. With overhead already covered, per-visit cost could be almost in line with today’s patient co-payments.

I believe that under this model, primary care could do a much better job being responsive to patients’ needs than in today’s $7 per minute hamster-wheel race for the insurance money.

Provide a prepaid card, similar to EBT cards for food stamps, or department store gift cards, that patients can use for the average number of annual visits (3 to 4) with their primary care physician and a basic amount for laboratory tests as well as “blanket approved” ancillary services like initial visits with counselors, dietitians and physical therapists. Again, no billing, so we could do much more for less money.

Beyond the basic level of primary care, higher co-payments and prior authorizations could indeed have a role. Money from the basic allotment not spent in a given year could be rolled over to cover future co-pays, such as for elective surgeries. This would help reduce the tendency to spend down the account every year with a “use it or lose it” mentality.

Specialty providers should not be paid by capitation, as some people have suggested, because the market forces that would make it necessary for primary care doctors to maintain a satisfied (and healthy) patient population would not work as patients often wouldn’t know how to rate their specialist until they needed the care. By that time it may be too late to “vote with your feet” and go elsewhere. Who would sign up with a brain surgeon, just in case he needed one?

At the risk of offending my specialist colleagues, the hassles of insurance billing and prior authorizations must seem at least a little easier to bear when you make your living doing fifteen minute cataract surgeries for $3,000 each than when you treat complicated diabetes, hypertension and heart disease in fifteen minute intervals for less than $100.

For catastrophic illnesses, like cancer, eliminate co-payments altogether and provide monies to reduce barriers to care, like transportation to daily radiation treatments, which can be burdensome on patients and families.

This may be controversial, but we as the country that spends twice what other countries spend on health care need to talk openly about setting priorities. Going back to the example of homeowners’ insurance above, if all my neighbors make insurance claims to essentially pay for redecorating their homes, and my premium goes up, do I have the right, or even the obligation, to speak up and say that they are hurting their neighbors when their claims increase all our premiums?

Some of the difficult conversations we need to have concern the shifting definition of disease in our culture. Things that used to be seen as normal aging or just life in general have gradually become diseases, especially when new and expensive drugs are marketed directly to consumers. This is why I propose that diseases like cancer should be better covered than runner’s knee, benign enlargement of the prostate (and this is a sixty-year-old male talking) or restless leg syndrome (even though it was described by a Swede from my alma mater). Even temper tantrums are a disease now, and I can think of several $200 per month drugs doctors prescribe for them. And, by the way, most newer brand-name drugs seem to cost at least $200 to 250 per month. We all need to be aware of what tests and treatments cost, so we can assess their value.

As a Swedish American, I can honestly say that health care with no market forces is not an ideal system, but for market forces to have a chance to work, consumers (patients) must think of the money they spend as theirs, not someone else’s. Before that money landed in the insurance companies’ or government’s coffers, it was on the top line of each of our pay stubs. We need a health care system that keeps us thinking of our nation’s health care budget as our own.

“A Country Doctor” is a family physician who blogs at A Country Doctor Writes:.


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  • LeoHolmMD

    Some of the best ideas I have seen.
    The insurance companies will take issue with #3 since profit comes from non-utilizers and the well pay for the sick, short of that.
    Point #6 for sure. Way too much “medicine” is about undoing lifestyle or culture. Those should be dealt with directly.
    I think this would solve a lot of problems as is. Well done.

  • QQQ

    When the government tells you that you MUST buy health insurance, that
    is tyranny. It is yet one more area of your life that the government
    wants control of.

    Obama is trying to tighten to noose around our necks. He recently said
    he was going to “re-brand” his oppressive healthcare package.
    “Re-branding” is a sales job to try to make something that is not good
    into an “attractive” product. This failed product is not being changed.

    With Obamacare, the US government is almost completely controlling our
    lives. Now you MUST have healthcare insurance or pay a fine. You lost
    the choice of healthcare coverage – you only get to choose how much you
    will pay in premiums, deductible, and co-payments. You don’t get to
    choose what is covered. Or whether to be covered. There is no guarantee
    you can keep your doctor.

    Never forget that personal and religious freedoms aren’t taken away all
    at once. Rather it’s done a little at a time so no one sees or realizes
    what’s happening. If people are lied to often enough, most begin to
    believe the lie. All of a sudden you wake up and realize what you
    thought was there, isn’t any longer. When your leaders are corrupt,
    elitist liars and cheats, it’s time to leave!

    The freedom loving America that we came to love no longer exists. The
    freedoms and privacy of 40 years ago are gone forever. People don’t seem
    to notice or care anymore. People say “America, love it or leave it”
    Well, we love America but have lost faith in the corrupt, elitist,
    hypocrites running it….

    • Patient Kit

      The US government is not almost completely controlling our lives. Far from it. Healthcare reform is a work in progress and badly needed. There are some good things in the ACA and some bad things. We need to fix the bad things or move forward — not backward — to something else. I suggest re-reading the OP for some good ideas.

      And, FYI, pre-ACA you did not have any of the guarantees you think you had. People with pre-existing conditions could not buy health insurance. There are many of us and anyone living in a human body could develop a new pre-existing condition at any time. And employers were under no obligation to provide health insurance. They could do — and did do — whatever they wanted at any time. You had no guarantee that you could keep your doctors pre-ACA, unless you could pay cash for everything you needed medically.

  • Patient Kit

    I like your ideas a lot, Country Doc. I especially like your ideas for financing primary care. Your suggestions are a good alternative to DPC (which I’ve been convinced by discussions here won’t work for many patients.) I think your plan might work for both docs and patients.

  • Patient Kit

    Since I’m going to need insurance to cover everything else besides primary care anyway, I’d like that insurance to continue to cover primary care as well rather than pay for a DPC membership on top of the insurance. I do not want catastrophic health insurance that only covers major emergencies, however that would be defined. I need to see my specialists more often than my primary care doc. I can self-treat most of the minor stuff that some people run to their PCP for. As I said, I like Country Doc’s ideas, including his way of having insurance cover primary care.

  • Patient Kit

    Sure. I’m fine with offering myself as a case study of an American in search of healthcare.

    For the last year I’ve been covered by Medicaid so almost $0 out of pocket costs for me this year other than $1 a month for a few prescription meds. No premium, copays or deductible But before you bite my head off for accessing the safety net of Medicaid when I really needed it to save my life, I did, work full-time and pay heavy taxes for decades, since I was 18 (I’m fiftysomething now).

    Before that, for 20 years, I had a very comprehensive employer-provided Blue Cross plan. My employer paid the entire premium and I had very reasonable copays and no deductible. When I got laid off from that job, I COBRA’d that plan for as long as I could @ $700/mo.

    Since you may have missed my story posted on KMD numerous times, here’s the short version: After I got laid off from a job I had for 19 years and after I lost my longtime Blue Cross plan, I was diagnosed with ovarian cancer. Great timing, huh? At that point, needing life-saving surgery asap, since I was totally broke (spent my savings keeping a roof over my head), I applied for Medicaid. And my life was saved.

    Now I’m trying to rebuild from nothing. I just started a freelance/consultant job that does not provide any health insurance. I’m continuing to look for a permanent job that does come with health insurance. For now, I’m still covered by Medicaid but I don’t know how long that will last. I may be making just enough money to be booted off Medicaid but not enough money to buy my own insurance. I’m still supposed to see my GYN oncologist every 3 months to monitor for recurrence of cancer that includes blood tests and sometimes imaging. I just had a CT scan last month, for example. I need insurance that will cover that sort of thing. Access to primary care is important to me but it’s the least of my worries.

  • Lisa

    Except your figures are wrong: I pay $100 a month for my insurance; my large employer pays $550. I don’t have a deductible if I use a preferred provider (all of my doctors are preferred providers). I have a $20 co-pay for office visits, $250 for hospitilizations. If I go out of network, my deductible is $1,500.

    Most people (individuals) do not pay $800 a month for insurance. They either get insurance through their employer and the total costs are less than $800 a month or they can get insurance through ACA. For fun, I checked the insurance prices of the California exchange and the price of the best plan for a woman in my age group was equivalent to my insurance costs. The max out of pocket was well under $12,000. More like $2,000.

    I also think you are underestimating the number of people who will need specialist care. The life time risk of US woman developing brest cancer is one in eight. What about other cancers? What about people who are injured, who need an orthopedic surgeon? Among the people I know, many people see specialists more often than they see their primary care doctors. 60% of the people I know are not obese, not diabetic, not hypertensive. People I know do have cancer, have other serious diseases that they have to manage, have had serious injuries or joint replacements. DPC and catastrophic coverage does not address their needs, as it does not address mine.

  • HJ

    A membership practice in my area costs $170.

    For $294 a month I can get a bronze plan with a $5000 deductible and a $6350 out of pocket max.

    For $475 a month I can get a gold plan with a $1500 deductible and $10 primary care visits. With an out of pocket max of $4500.

    Gold plan…
    a good year…$5710
    a bad year…$6150

    Bronze plan with DPC
    a good year…$5568
    a bad year…$11918

    Bronze plan without DPC…
    a good year…$3538
    a bad year…$9878

    • Papa Omega

      What is your employers contribution?

      • Lisa

        I believe HJ is referring to purchasing insurance through an exchange, as an individual. Therefore, no employers contribution.

        From many people the ecomomics of paying membership in a DPC and insurance to cover care other than primary care don’t make sense. I’ve heard over and over how DPC will save people money, but I think many people don’t use primary care all that much and the proposal of Country Doctor outlined makes more sense than trying to convert the whole country to DPC.

        • Patient Kit

          Lisa, you are so lucky to still have good comprehensive insurance via your employer and I know you realize how good that is.

          I’m amazed at how many posters here keep trying to tell me that very few people are seriously ill or injured in the US. In this era of many people surviving major medical crisis and living long lives, who knew that we are so rare and that most people only need a primary care doc. So many busy specialists for a population of such healthy Americans.

          I get especially frustrated when I’m told here that not many people have cancer. Really? I think it’s hard to find anyone who doesn’t know someone who has been touched by cancer. I’ve used myself as an example here to try to make it more real for all these people who have never known anyone with cancer. But then they hone in on the specificness of my personal case and ignore all the people with serious heart disease, stroke, Parkinson’s, MS, HIV, ALS kidney disease, spinal injury, etc — none of which I’d want a generalist to treat.

          I’ve been told so many times now on KMD how rare serious illness is in America that I’ve started to draw a few conclusions: (1). There are massive amounts of people out there who just do not want to believe it could ever happen to them or anyone they love and they are heavily invested in that delusion. The reality is that it can happen to any one of us at any time, often with no warning. and (2). There is a widespread healthier-than-thou attitude out there that manifests in the belief that the healthy shouldn’t have to pay so much in our healthcare system because some other people can’t stay healthy like them. So deadset against spreading the risk or helping anyone — until, suddenly, they are the ones that need the help. Then tunes change.

          We’ve talked a lot about how successful the real enemy’s divide and conquer strategy has been: Patient v doc. Primary care v specialist. Docs v NP/PAs. New docs v old school docs. patient v doc, primary care v specialists, new docs v old school docs, Private practice v employed docs. We often forget to mention another one that I hear more and more here: the healthy v the sick.

          And yet, I persist in believing that many people are not good candidates for the catastrophic/DPC plan. An awful lot of healthcare falls between a visit to your primary care doc and that one day in the hospital post-major surgery. Sigh.

          • Lisa

            PK, I am lucky to have good insurance coverage through my employer. Having good benefits (health insurance and medical leave) have made things a lot easier for me in the past six years.

            I agree with you. People do not want to buy insurance that they do not think they need. People would not buy car insurance or home owners insurance if they were not forced to. Health insurance is the same – why should you buy insurance when you are perfectly healthy? But all it takes is a major illness or injury to demonstrate the value of insurance and access to medical care.

      • HJ

        Lisa is right…I looked up what it would cost me to buy an individual plan on the exchanges in my state.

        For me, I receive my healthcare coverage through my spouse’s employer. For the family, we pay about $500 a month…this includes dental, vision and short term disability. It has a deductible of $3000 per person or $4500 per family. Also included in the plan are 4 doctor visits with a co-pay of $20. I went to the doctor once last year to renew my prescriptions. Adding DPC clearly costs more than just using our employer sponsored health plan.

    • Patient Kit

      I doubt that a DPC membership fee would be $65/mo here in NYC either but it’s not an option I’m interested.

      The exchange plan examples you listed sound reasonable. I’m definitely looking at the options on the NY exchange in case I have a gap between when Medicaid cuts me off and when I find job that comes with comprehensive insurance. Or if I can start making enough money as a roaming consultant/freelancer to be able to afford one of the better exchange plans, that might work too.

      We have about a dozen insurance companies, each offering 4 levels of plans, on the exchange. I know that the hospital system where I’m currently recieving most of my medical care is accepting at least 6 of the plans, all levels. I don’t think the bronze plans would be good enough coverage for me, but silver or gold might work. And this year, I probably qualify for a subsidy since I’m just getting back on my feet and had no income for the first half of the year. Besides cost and coverage terms,
      the plan I’d pick would definitely depend on which
      docs accept them.

      The ACA and the exchange plans are far from perfect but they are a better option than the options I had before Jan 1, 2014 when the pre-existing condition clause kicked.

      Just last week, a friend in CA told me that she’s very happy with the platinum insurance plan she bought on the exchange. A year ago, she was working at Microsoft with good insurance provided by that employer. Since she was used to good insurance, I’m encouraged that she likes her exchange plan.

      Since I jumped into the DPC discussions here, I’ve asked friends and family what they think about DPC. So far, nobody I know is interested. For those who want it, go get it. I’m certainly not stopping anyone from doing that. But I think it benefits us all to share whatever we know about the advantages and disadvantages of all of the options.

  • John Hunt

    Lots of great ideas here. And the government is the only barrier to implementing them in various forms on trial basis within the free market of ideas.

    But there may be room to implement these ideas even within the controls and limitations created by Obamacare, JCAHO, CMMS, AMA and the various narcissistic Boards.

    The various entities emerging now to compete with dysfunctional and indeed idiotic health insurance companies may adopt some of these ideas. Health sharing ministries could adopt some of these ideas. Voluntary community organizations like the Lions Club, the Masons etc, used to have doctors for the families… They might pick up on these ideas and start flushing first-dollar health insurance out the door..

    The government has to STOP subsidizing the bad insurance, and get entirely out of the way of free market of ideas. If they would get out of the way, American’s health care could thrive and strive and reach for the best once again.

    Disempower government. Re-empower freedom.

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