Cut Costs By Keeping Patients Out of the Hospital

Cut Costs By Keeping Patients Out of the Hospital

The Atlantic posted a great article about Medicare and a private concierge medicine company providing exceptional preventative care. Give it a read.

The story covers Dr. Dougher, who works with HealthCare Partner as a primary physician in Los Angeles, California. But this is no ordinary doctor handling 1,500 patients, seeing 30-40 a day in a jam-packed office. No, Dougher sees six to eight patients per day, doing house calls for those too elderly to leave their homes.

Here’s an important highlight:

“Dougher’s employer [HealthCare Partner] receives a fixed fee each month for each senior citizen enrolled in the plan, equivalent to what Medicare would pay for a similar patient, and is responsible for paying for all of their medical care, from doctors visits to hospitalizations to surgeries.”

This is good news for Californians. The bad news, though, is that this is a news item, and not the norm. However, it’s reassuring to find out that Medicare is working within a concierge model.

Another point worth noting:

“This payment system creates a remarkable alignment of interests: It is irrelevant that Dougher’s home-visit unit would lose massive amounts of money in a traditional fee-for-service system. Dougher’s job isn’t to see a lot of patients; his job is to take great care of… patients… so they remain healthy and stay out of the hospital, saving HealthCare Partners thousands of dollars each time a hospitalization is prevented. Everyone wins except for the hospitals that see fewer patients admitted and hence less revenue.”

Again, this is sensible. This is business that makes money, and that prioritizes health, and in doing so, forges relationships. It’s not great news that hospitals are receiving less money. But, The Atlantic might be not be presenting the whole side of the story. Yes, if you want to sell burgers, more is going to be better. But hospitals are different. They don’t get paid well for all patients. They can actually LOSE MONEY when Medicare patients come in for unsubstantiated reasons. And also, if a Medicare patient returns within 30 days with the same diagnosis, the hospital can actually be fined. This isn’t the entire picture, but just because a hospital sees fewer patients, does not automatically mean it’s suffering in terms of revenue.

However, it is a shame that the same insurance companies that are charging impossible rates, leveraging higher deductibles, are also trying to short hospitals on payments by cutting deals. And as we’ve seen, hospitals then pass on ridiculous prices to uninsured patients, just to get out of the red. And THAT, doesn’t seem sustainable.