
A Pioneer in 'Flat-Fee Primary Care' Had to Close Its Clinics - happy-go-lucky
http://www.npr.org/sections/health-shots/2017/06/20/533562142/a-pioneer-in-flat-fee-primary-care-had-to-close-its-clinics-what-went-wrong
======
oldandtired
A former travelling companion (on a long distance train trip) moved from Head
of R&D for an advertising agency into working in the medical technology
industry. After six months or so, he returned to his former job of head of R&D
at the advertising agency. When quizzed by the staff at the advertising agency
as to why he came back to such a corrupt industry. His comment was that
advertising were little children in terms of corruption compared to the
medical technology industry.

I had a long discussion with him about what he had seen. He made the statement
that every company that he saw would increase their prices for any product
that was being sold into health care by at least a factor of 10 over what they
would sell the same product for to non-health care areas.

I, myself, have had other conversations with various people (in both drug
companies and medical institutions) and it has been common for comments to be
made as to the vast difference between drug production costs and the final
retail sale prices (even taking into consideration all the development costs,
I have seen some of these figures and they are, well ....).

Health care is as exorbitantly priced as legal consultations and
representation and the value received is in many ways far less than what you
would receive by going to Macca's.

~~~
crusso
_factor of 10 over what they would sell the same product for to non-health
care areas_

That's a key statement.

So these same people charge less for the same product in other fields.

Why?

The reason has to do with the construction of the healthcare industry. Lots of
regulations. Lots of middlemen. Laws designed to destroy innovation. Very
little transparency for costs and outcomes.

~~~
fao_
> The reason has to do with the construction of the healthcare industry. Lots
> of regulations. Lots of middlemen. Laws designed to destroy innovation. Very
> little transparency for costs and outcomes.

Or the reason has to do with the fact that the people that need these
treatments are willing to pay any price for it because their life literally
depends on it.

I don't see why regulations, and laws "designed to destroy innovation" (i.e.
keep people safe from bogus drugs) are a bad thing. (Of course lack of
transparency and middlemen are bad). Almost all of the regulations in the
medical industry are for ensuring people are safe, and do not succumb to drugs
that are no more effective than a placebo.

I think one of the main reasons why the price is artificially inflated is
because of the patent laws in this area. Capitalism itself has various
safeguards to ensure that the cost does not get too high for people to buy it,
and to ensure that monopolies do not grow, but it seems that we have actually
created laws (patent laws, mainly) that circumvent these safeguards.

~~~
crusso
_their life literally depends on it._

That would only explain emergency procedure costs.

Everyday healthcare costs that are not life-or-death are also extremely high.

 _Almost all of the regulations in the medical industry are for ensuring
people are safe_

Are tax laws that benefit employers and lock employees into healthcare plans
there to keep people safe? How about laws that prevent companies from selling
insurance across state lines? Allowing companies to confiscate unused FSA
money at the end of every year?

And even then, there are many regulations and laws that I'm sure are
ostensibly to keep people safe in the short term - but they have the negative
effect of stifling innovation that could bring down costs and make people
safer in the long run. Look at the disastrously-slow pace of the FDA drug
approval process that has continued for decades.

~~~
fao_
> That would only explain emergency procedure costs.

No. It also includes maintenance medicine.

If I stop taking my asthma medicine, my quality of life would rapidly
deteriorate and I would sooner or later have to be admitted to A&E for an
asthma attack. So my life depends on those medicines. The same for people with
Depression, Chronic Pain, Severe Vitamin Deficiencies, etc.

> How about laws that prevent companies from selling insurance across state
> lines?

That seems extremely logical given how much variation in local law exists in
North America.

> but they have the negative effect of stifling innovation that could bring
> down costs and make people safer in the long run

 _could_. Given the sheer amount of bad science in medicine at the moment
(e.g. refusing to publish negative studies), it is not likely. Medicine is
difficult, and where we have rushed drugs through we have an extremely poor
track record (Such as, a type of SRIs being prescribed, that later was
discovered to raise the incidence of suicide among adolescents. In this
specific instance this was known before it went on market, but the papers were
not published).

------
alkonaut
> "some health care analysts are questioning whether the approach to medical
> care is valid and viable."

Perhaps just stop trying to figure this out from scratch, look at any of N
countries where healthcare is just a solved background issue?

Yes there are issues with people overusing services that don't have an
associated cost for usage, and many similar issues.

But every damn country in the world has been adjusting the parameters of
healthcare such as per-visit costs, healtcare budgets vs. queue time,
expensive treatments vs death-panels etc for usually at least _half a century_
now. These are solved problems.

~~~
refurb
I come from Canada and I would say healthcare is not "solved" by any means.
There are constant struggles with wait times, growing budgets and allocation
of limited resources.

There is no magic solution. I do agree that the US should look to other
countries for ideas though.

~~~
alkonaut
Well it depends on the definition of "solved". Having a system where people
have access to decent healthcare and it doesn't ruin public finances I mean.

I keep twisting the thermostat a bit but I consider building heating to work
in the "solved problem" sense

Public healthcare will never be _perfect_.

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RcouF1uZ4gsC
I think there is a selection effect. It mentioned that losing some of it's
large corporate customers was a big issue. When you sign up a bunch of
employees that get this service through their employer, chances are good that
most of the people will underutilize the service - thus you have a good
profit. If you lose that, and now a lot of your customers have subscribed
individually, there is a good chance that they will overutilize the service -
after all they paid good money for a reason. Thus your profits will decline.

~~~
mjevans
I suspect that reason might (often) actually be that they are in less than
average health and selecting the correct 'plan' for them.

The insanity is forcing patients to compete for health plan coverage. We'd all
be better off with a single payer system and locality based dutch-auctions for
figuring out who provides the care.

Also, can I please have Dr. Watson (or similar) take actual inputs and
determine if further tests are necessary to confirm or reject a diagnostic
result? I still want an actual doctor to make the final check on the results,
but I'd rather have an algorithm make the guesswork less dependent on one
person knowing -everything- (that's what computers are for).

------
Animats
Kaiser offers "flat fee primary care", and they do OK. But they have
experience at running that kind of business.

~~~
narrator
I love Kaiser. They are so ridiculously efficient compared to all the other
health care providers I've had over the years. Doctor's being salaried and
paid by the hospital and the hospital chain being the insurer is really the
way it should be everywhere.

------
driverdan
A recent EconTalk episode covers the history of this type of system in depth:
[http://www.econtalk.org/archives/2017/06/christy_ford_ch.htm...](http://www.econtalk.org/archives/2017/06/christy_ford_ch.html)

It was widespread until insurance companies forced them out of the industry.

------
lotharbot
as a patient, Qliance was a phenomenal experience, and easily worth the cost.
(I no longer live in the area, but am with a DPC practice where I am now,
which is of similar quality.)

I wonder if the problem with losing their big employers was that it changed
their patient demographics too sharply and suddenly.

------
timthelion
Meanwhile in the Czech Republic, for caa 50$ a month (for a person making
minimum wage, it's double that for median wage workers) there is no copay on
anything and the insurance covers everything including sex change surgery (but
not facelifts and dental)...

~~~
vxNsr
I always chuckle when I see people compare what amount to 3rd world countries
with the US system, my mother was trained and worked in Moscow's largest
hospital. The shenanigans that went on there, the level of training and
expected knowledge of staff, the baseline expected standard of care all don't
even hold a candle to what she had to reach to be considered competent in the
US.

On top of that I don't know if this applies to CR as much as other European
countries, but homogeneous populations really are easier to care for and
create actuarial tables around than the stew of the US; when people bring
Sweden with its <50 million pop of white people with very similar ancestry to
prove their method might work, they ignore how medicine and the whole industry
actually is practiced (and needs to be practiced). Let's wait 20-30 years now
that they've taken in 1.5 million refugees from a very different background
who are projected to grow 3x faster than the current population before we
start trying to emulate unproven theories.

~~~
germanier
Then take a look at other countries: The German system was introduced 130
years ago[0], survived multiple forms of government, two world wars, the
incorporation of a former socialist country, multiple waves of immigration,
and still provides excellent care. It just works.

(And modern medicine is not yet at a level where ethnicity is a relevant
factor when deciding treatment options.)

[0]: By highly conservatives by the way, to fight the rising social democrats

~~~
timthelion
> (And modern medicine is not yet at a level where ethnicity is a relevant
> factor when deciding treatment options.)

Perhaps OP was refering to the fact that the decendets of slaves in America
are MUCH less healthy than the rest of the population.[1]

[1]
[http://archive.independentmail.com/features/columnists/what-...](http://archive.independentmail.com/features/columnists/what-
specific-health-concerns-exist-for-african-americans-
ep-411884270-348754091.html)

------
TuringNYC
Anyone have insights on how Go Forward Health
([https://goforward.com/](https://goforward.com/)) is doing? I _love_ their
concept, to the extent I almost want to work there. However, I wonder if such
services would suffer from an adverse selection problem -- their current cost
of $149/mo seems almost free these days -- how do they manage high-volume
users?

~~~
jtokoph
Just took a tour of the facility a few weeks ago. During the hour (or more?)
we were there, nobody came in or out. I think their issue is just getting
users at all; so high-volume users would be a great problem for them to have
at this point.

They are trying to sell users on the fact that they are a tech company just as
much as a medical service. But from what I saw they have a "Body scanner"
(glorified scale that also gets height, O2 and pulse) and a bunch of iPads
built into the walls.

EDIT: Also wanted to mention their trickery with pricing. They bill annually.
The rep will tell you that they have a special promotion where you can sign up
for the monthly plan if you sign up shortly after your tour. But the "monthly"
plan still requires you to pay an early termination fee of 50% of the
remaining annual balance.

------
dr_
The affordable care act has enrolled millions on to some kind of health
insurance plan. Even if you are stuck with a high deductible plan, oftentimes
that annual check up (preventive care) is fully covered without requiring a
deductible payment. And, of course, if you are on Medicaid - you have
Medicaid.

If you are relatively young and/or healthy, that's all you would really need.

As a result, their patient population likely gradually dwindled.

I was a proponent of dpc at one point but, now enrolled in a high deductible
plan myself, i don't see as much need for it personally. I'd rather take the
money and throw it into my health savings account and use it when i need to.

~~~
distances
Being from Europe, the concept of annual check ups sounds very wasteful. Is
this what everyone does in the US?

As far as I see it, schools should teach enough to keep you in a good baseline
health and doctors are available if something comes up. What is done in a
normal annual check up?

~~~
ams6110
I haven't been to a doctor for a "check-up" since I was a kid. Probably been
nearly four decades now.

I think for growing kids it's probably a good thing -- if nothing else to be
sure you're on schedule for various vaccines.

As an adult, I have regular dental care but I do not see an MD unless I am
sick or injured. And "sick" does not include colds/sore throat -- there are
good OTC meds for that.

For most people, if you feel "normal", aren't gaining or losing weight
unexpectedly, don't tire more easily than normal, your blood pressure is OK,
etc. your health is likely fine.

~~~
distances
Just to expand on this, Europeans do get doctor's visits every now and then
even if there's nothing clearly wrong, as sick leaves extending a couple of
days usually requires a medical certificate. This doesn't obviously usually
include blood analysis or other such tests though.

Disclaimer: I'm extrapolating from personal experience of a handful of
countries, this of course doesn't necessarily apply to all of Europe.

------
esaym
If they are talking about "direct primary care", then there are still plenty
to choose from:
[http://www.dpcfrontier.com/mapper/](http://www.dpcfrontier.com/mapper/)

------
ams6110
If a straight fixed fee was encouraging people to overuse the service, why not
tweak it and try a fixed base fee plus a modest per-visit fee?

------
Simulacra
I wonder if unlimited consumption because it's unlimited is more of an
American phenomenon. Everything from buffets to unlimited mobile useage, we
seem to really love unlimited and we use it pretty aggressively when we can. I
wonder why this clinic did not put some controls on things; please correct me
I did not see that in the article.

------
ada1981
You may want to screen / sort customers based on Attachment style.. it's been
found folks with anxious attachment visit the doctor more often and use more
resources - but they visit for things that are non-issues, basically they are
going for the relationship.

~~~
timthelion
In Czechia, where there is no co-pay, for a while, a co-pay of $1 was
instated, not to help pay for services, but to "prevent seniors from comming
just to chat".

