What primary care can learn from the financial service industry

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Man looks into the Abyss, and there’s nothin’ staring back at him. At that moment, man finds his character, and that’s what keeps him out of the Abyss.
– Lou Mannheim (Hal Holbrook) in the movie, Wall Street

We hear reform ideas all the time: Primary care physicians need to work at the top of license, physicians need to work in teams, health care must deliver top-notch customer service, the focus needs to be on creating strong physician/patient relationships, and physicians need to be paid for delivering value.

The question then becomes: How does the health care industry implement such ideas?

I believe it would be smart to apply the lessons from other industries.  Specifically, the financial services industry.

My dad has spent over forty years as a financial adviser.  I always looked at him as the ethical Lou Mannheim character (played by Hal Holbrook) in the 1980s movie Wall Street, as opposed to the unethical Bud Fox character (played by Charlie Sheen).  Throughout his career, my dad has helped people from all walks of life achieve their financial goals.

I cannot help but notice that his role is not that different from a primary care physician.  Financial advisers work with clients to overcome financial problems and achieve financial goals.  Primary care physicians work with patients to overcome health problems and achieve health goals.  Each profession is similar in that they focus on the whole person and the entire financial or health care portfolio.  With both professions, the ability to achieve the stated goals is directly correlated to the strength of the relationship between the adviser and client or physician and patient.

My dad’s profession has changed a lot during his long career, most significantly over the past 15 years.  The change has largely been for the betterment of his clients as well as him as an adviser.  For most of his career, he was paid on commission.  He didn’t make money unless his clients made some kind of financial transaction — trade a stock or bond, invest in a mutual fund, put in place an annuity, etc.  It was all about doing stuff: generating activity and production.

Often, his bosses would push a deal of the day and he and his colleagues would work the phones trying to write as many “tickets” as possible (a “ticket” is a financial industry colloquialism for a transaction).  Yes, he worked on developing strong relationships with his clients and was ultimately driven to do what was best for them, but every meeting, every phone call, and every conversation was simply a means to an end.  And that end was activity, commissions, and production.

If you are a primary care physician, does this sound familiar?  The way our health care industry works today, primary care physicians do not get paid unless they generate some kind of patient activity — see a patient face-to-face, freeze a wart, biopsy a mole, etc.  Yes, physicians still want the best for their patients, but they are limited in just how much they can do.  For some physicians who are hospital employed or in a large practice, it is not uncommon to get a tap on the shoulder from a group leader and be told they need to get their production up.  Our society is inundated with advertising imploring individuals to get health screenings that are not that different from my dad’s old deal of the day.

As ethical as my dad is, if a client was financially stable and happy, he largely did not get paid.  In fact, if he chose to surrender to complete greed, there was more financial incentive for him to make someone unstable and generate activity.

This all changed in the past 15 years.  Instead of being incentivized to produce and generate activity, financial advisers like my dad began to change the payment model to benefit the client.  Instead of commissions, they changed to a flat fee based on a percentage of the client’s assets.  Now, a financial advisor has every incentive to help the client grow as financially healthy as possible.  Plus, the happier, healthier and more stable a client is, the less work it is for the financial advisor.

My dad’s role has changed from an order taker to being able to use his full breadth of expertise.  In the past, any staff he had were largely in place to help him generate more activity: clerical work, order entry, etc.  Now, he manages a whole team of people that enhance the client relationship.  When a client simply has a quick question or an order request, they don’t need to talk to my dad, instead, they can talk to someone on his team.  Thus, freeing up my dad’s time to focus on the most complex issues.

My dad’s relationships with his clients are stronger than ever.  He can now focus on complete financial health: not just growing assets and wealth, but maintaining and protecting what his clients already have.  When clients have special needs, my dad can coordinate with other specialists, from attorneys and accountants to art experts.

Plus, financial advisers and other entrepreneurs are free to innovate in whatever way will maximize value for the client.  Individuals can now trade stocks on smart phones and people have access to a multitude of new financial tools.

When is our health care industry going to wake up and make a similar change?  Fortunately, it is already happening at a relatively small level with the direct primary care movement.  Physicians are being paid for delivering value.  Individual physicians and some medical groups like Qliance and Iora Health realize that value is not created by activity but by freeing those on the front lines to innovate and form as strong a relationship as possible with patients.

Achieving true reform does not occur through top-down mandates.  Instead, I am arguing that the solution is rather simple: We need to free primary care physicians to innovate, compete and deliver value on their own, and the key to doing that is paying primary care physicians a flat monthly fee.  It has worked for financial advisors and their clients all over America.  And let’s be clear, such model is not returning to the bad parts of HMOs; if patients don’t like their physician, they should be free to choose another.  Patients should not be locked into a HMO-like gatekeeper structure.  Make physicians compete for business.  If my dad does not deliver value for his clients, the client will simply leave and find a better advisor.

If physicians still want to pursue ACOs on top of this payment arrangement, there is nothing to stop them; the two concepts are not mutually exclusive.  In fact, I could write another post comparing ACOs and population health to managing a financial portfolio like a mutual fund or hedge fund.

In conclusion, implementing many reform ideas does not need to be complicated.  A simple change in the payment model has allowed my dad to work at the top of his expertise, manage a great team focused on delivering great value and service to his clients, and, most importantly, has made his relationships with his clients so strong that he is often invited to weddings and other life events.

When was the last time a primary care physician was invited to a patient’s wedding?

Stick to the fundamentals. That’s how IBM and Hilton were built. Good things, sometimes, take time.
– Lou Mannheim (Hal Holbrook) in the movie, Wall Street

Tom Valenti is founding partner, Forthright Health.

Image credit: Shutterstock.com

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