Medical Malpractice

President Obama promised that after implementation of his new health plan, Americans would be able to keep their doctors and insurance plans and that there would be more access and choice in health care delivery.

The media offers a lot of coverage on the shortage of primary care doctors and how new legislation will exacerbate the problem. One major goal is to increase access to care for all Americans - particularly lower income citizens - by providing health insurance options to more people in order to make care more affordable.

While the right to health care is debated, everyone generally agrees that better access and more affordable health insurance is good. If people are insured they'll make better preventative care choices and see their doctors regularly. Effectively, this means fewer trips to the emergency room for the common cold and less occurrence of heart disease-induced surgeries.

However, 20 to 45 million additional patients represent huge demand that will overwhelm the current pool of doctors. Basic supply and demand teaches there will be a problem: new, government-induced insurance cannot create the tens of thousands of new physicians needed overnight. A shortage of doctors will become an increasing part of life. However, other types of legislation - or the free market - could encourage more students to become doctors and more nurses and physicians assistants to take on changing roles.

Many newly-insured patients and those who already depend on government-sponsored care will have greater access in theory; however they will have long wait times as doctors close their practices to new/Medicare/Medicaid patients. Short of time or immigration, only intrusive federal regulation can remedy this situation.

According to the WSJ, changes which would be the envy of any economic central planner are underway to cut insurance company costs. The plan caps overhead or the inverse of "medical-loss ratios" at 15% for units that offer health plans to large businesses (20% on individual/small business plans). A common response may be "Great... those greedy insurance executives make too much!" however this tightening misses the point and has some interesting consequences.

• First, due to the extensive startup costs of new insurance plans, overhead caps will limit new product development and marketing and fewer will be created.
• Second, starting in 2014 the government will standardize insurance benefits, reducing differentiation and consumer choice. (Perhaps making the prior point moot)
• Third, insurers will choose unorthodox methods (not inherently bad) including vertical integration. Owning practices or hospitals eliminates negotiations with doctors over reimbursement as the insurer would be paying salaries. (The article mentions that by next year over 60% of doctors will be salaried).
• Fourth, of practices not owned by corporations, fewer will be "In Network." As insurers cull their groups of networked doctors, they will be able to exert more force with each that remains.
• Fifth, it is rumored that medical licensure may one day depend on participation in Medicare and Medicaid. Massachusetts is looking to deal with their shortage by effectively doing just that.

Ultimately, as "access" is touted in the form of millions of new insurance policies, access as we know it will disappear. If past social experiments are any example, promising more - albeit with good intentions - without implementing necessary infrastructure improvements will lead to shortage and rationing. Further, with insurance companies owning more practices and closing their networks, and more doctors joining large hospital groups as rank and file employees, "choice" as we know it will suffer as well.

As we face a challenging future leading toward more social programs - even as European countries move to reform their own - what are we to do? The government picked a few aspects of one important point: cost. Lower income folks avoid regular visits in part due to affordability of health insurance/health care, so the government offered to help pick up the tab as a solution (politician method). And, since insurance companies are for-profit and operate like any business; restrict their expenditures as a solution (balance sheet method).

The free market alone may not be best at offering universal access to affordable, quality care. However, the solution is not to adopt another extreme. Opportunities for cost cutting outside of health insurance premiums are many and while some regulation may be necessary most would not impact the personal relationship one has with their doctor. A few include:

• Malpractice insurance (tort reform)
• Medicare/Medicaid (yes, we do need more government spending)
• Medical school tuition (higher education in general needs help)
• Medical school enrollment (capacity for qualified students)
• Pharmaceuticals (we can learn from the Canadians and Europeans)
• Wellness and nutrition programs (save trips to the ER)

One solution would be to restore the relationship between patients and doctors by restricting dependency on big business and big government. Cost cutting measures and an overhaul of "health insurance" from a buyers club for body maintenance to a protection against financial ruin from emergency and hospital care can be blended with a direct care model of service that allows patients to choose their doctor and pay directly.

Models demonstrate that fee for service or all inclusive concierge plans make financial sense for patients and provide stable salaries for health care providers. On the low end a plan offering basic care including office visits and wellness could be as little as $75 per month. For just $250 per month, one could have a full, premium concierge plan. Combined with ER/Hospitalization (catastrophe) coverage, even a top shelf concierge plan for the average middle aged American is cheaper than their current HMO or HDHP bill.

While many scoff at a $2,000-$4,000 annual price, they fail to consider their monthly insurance premium, how much their employer contributes, and all of their co-pays, deductibles, and out of pocket charges. In order to ensure that those in lower income brackets take better care of themselves - and leave the ER for emergencies - it would be both ethical and cost effective to offer means-tested free clinics or even subsidies to cover direct care. While this will take an overhaul of our health delivery system, we believe direct care and concierge medicine are part of the solution and we work hard daily to support implementation through Direct Care Practices.

The Florida Research Partnership (FRP) is a joint effort between the non-profit Society of Direct Care Medicine and Direct Care Group, an industry leader in the concierge medicine/direct care market.

Each brings a unique perspective to the collaborative effort. Due to its independent, non-profit status, the Society brings pure, unencumbered research. DCG in turn provides real world operational experience and the resources necessary to disseminate the products of the partnership.