State Run and Free Healthcare Clinics ? ? ?
“For goodness sakes, of course the employees and the retirees like it, it’s free,” says Republican State Sen. Dave Lewis.
11,000 Helena state employees, retirees, and dependents now go to a state run healthcare clinic which is free. No co-pays, no deductibles, doctors are salaried, wait time is a few minutes, and visits are up 75%. Of course, the skepticism is high:
– “I thought it was just the goofiest idea”
– “If they’re taking money out of the hospital’s pocket, the hospital’s raising the price on other things to offset that,” Lewis suggests . . .
– He (Lewis) and others faulted then-Gov. Brian Schweitzer for moving ahead with the clinic last year without approval of the state legislature, although it was not needed.
One year has passed and what about today’s feelings ?
– “They’re wonderful people, they do a great job, but as a legislator, I wonder how in the heck we can pay for it very long,” Lewis says. (me)Someone changed his mind.
– division manager Russ Hill says it’s actually costing the state $1,500,000 less for healthcare than before the clinic opened. (me) Sounds like it will fund itself in the end.
– “Because there’s no markup, our cost per visit is lower than in a private fee-for-service environment,” Hill says.
Some of this may not sit well with physicians; but, why the big difference ? ? ?
– Physicians are paid by the hour, not by the number of procedures they prescribe like many in the private sector. The state is able to buy supplies at lower prices.
– Bottom line: a patient’s visit to the employee health clinic costs the state about half what it would cost if that patient went to a private doctor. And because it’s free to patients, hundreds of people have come in who had not seen a doctor for at least two years.
– Hill says the facility is catching a lot, including 600 people who have diabetes, 1,300 people with high cholesterol, 1,600 people with high blood pressure and 2,600 patients diagnosed as obese. Treating these conditions early could avoid heart attacks, amputations, or other expensive hospital visits down the line, saving the state more money. and lower costs over all in the end (me).
– That personal attention has proved valuable for library technician Pamela Weitz. A mammogram late last year found a lump. “That doctor called me like three or four times, and I had like three letters from the clinic reminding me, ‘You can’t let this go, you’ve got to follow up on it,’ ” she says.
This is what is meant by improved quality and better outcomes from healthcare as opposed to a services for fees scenario.The patients appear to be happier as well as the doctors employed by the state run clinic.
– Clinic operations director and physician’s assistant Jimmie Barnwell says this model feels more rewarding to him. “Having those barriers of time and money taken out of the way are a big part [of what gets] people to come into the clinic. But then, when they come into the clinic, they get a lot of face time with the nurses and the doctors,” Barnwell says
Maybe it is a fluke; but at least, one state tried it with what appears to be good results. I live in Michigan where the state Repubs have been haggling with the teacher and state employee’s unions over paying for healthcare insurance. I could see this model working here for both groups as well as Detroit workers and retirees where the city is seeking to end it for retirees and cut it for workers. In the end, it appears it could save Michigan and Detroit money which is sorely needed in “some” cases. It is interesting a state which is 50-50 in politics appears to have found a way out of the healthcare cost and insurance quagmire. Montana’s State-Run Free Clinic Sees Early Success
Another thing streamlined is that there is no complex billing department. The typical medical office usually has a big staff that does nothing but deal with insurance companies. (Obviously, the insurance companies also have to have huge staffs doing nothing but dealing with those calls on the other end.)
I found a 2009 family practice office budget for a five physician office which runs about $3M/year, or $600K per doctor employed. Each physician produces 7,200 relative value units (RVUs) of medical care per year, and the clinic provides 60,000 RVUs overall. About $1M of the budget is for other staff salaries i.e. not the doctors. Another $1M goes for the doctors salaries and benefits. This leaves roughly $1M for rent, insurance, computers, medical gear, telephones, and medications. (Rent, medications and drugs are about $200K, $140K and $75K respectively.)
The overall profit of the operation is about $200K. That can come off the top.
I’m not too sure how to get the overall revenue number down from about $3M to about $1.5M. Granted, if half the staff is doing billing, that’s almost $500K right there. A larger clinic probably has other efficiencies and can buy in larger quantities which might be another $200K. The cost of handling phones and reception surely rises more slowly than linearly. I can accept the cost dropping to $2M (about by 1/3) by a combination of scaling and dropping the billing department.
Still, I’d love to know if this budget I found is realistic or highly optimistic. I know that family practice physicians have recently, since 2009, become much more profitable thanks to RVU readjustments. Even more, I’d love to see how this kind of thing scales. I’m guessing it scales better than most people think.
It’s not a fluke. It’s a successful model with a wealth of research behind it. This is what happens when facts trump politics.
It cuts out the middle man and his profit, and spends it directly on healthcare for the employees. It reduces cost, improves healthcare, and expands coverage to more people.
Where is the downside? An insurance exec who loses his airplane?
Let’s hope it’s catching.
There are some support savings from all the billing people vanishing.
I suspect you could pay the doctors a bit less because their working environment will be better (no arguing with insurance companies, a bit less administration).
I used a cash-only doctors office in San Francisco once. It was rather surprisingly different from other doctors offices I have been to. The usual swarm of medical-office workers at the front just wasn’t there. The place appeared to consist of a receptionist just sitting at a desk, 4 doctors and one probable nurse setting things up. I filled out a history questionnaire, signed one form, saw the doctor for ten unhurried minutes or so finding out I had some bronchitis, got a prescription for some common medication. They offered to fill it for me right there, telling me it would be about $5 less if I went to a pharmacy where my insurance would cover it. I paid cash on the way out (I think it was $80 or so) and that was that.
Definitely seemed like way less than half the labor involved in a normal insurance-taking doctors office visit.
It is not the labor . . .
Billing manipulations often yield unanticipated consequences. Many years ago (in a galaxy far away), the legal profession billed its institutional clients (corporations and insurance companies) with a simple one liner: “for services rendered: so many dollars”.
The clients decided that that practice left too much discretion to the law firms and that they needed some “metrics” to justify the costs of dealing with the legal system and so they insisted on hourly billing.
It wasn’t too long (20 years, maybe) before they decided that the hourly billing system was too easily manipulated and that something else should be the basis for billing so they insisted on case billing: one price for a project or case.
So, instead of at the end of the matter, at the beginning the clients were quoted a price to handle the matter. “For services to be rendered” so to speak.
Once, responding to a request for a quote to handle a body of matters for an institutional client, I gave the client a number which turned out to be a significant savings on what the client was paying another firm to handle the same or an equivalent body of cases. The general counsel insisted that I reveal my calculations in coming to the number I had and I “showed my work” (hello grade and secondary school). The general counsel then complained that my number, assuming that my underlying assumptions and calculations were correct, gave me too high a billable hour rate. It was apparently unimportant that the lesser rate he was already paying was yielding higher total costs.
Moral: all systems can be gamed. Sometimes recognizing a good deal is impossible in the bright light of concentration on what are thought to be the components. Medical pricing is a bit like legal pricing.