The Starbucks Method for Primary Care

Whether you like it or not health care financing is transitioning from payment for discrete services to global payment for value. Whether you agree with this trend, or comprehend its meaning, if it has one, is largely irrelevant in the short term. The government of the United States, the Chamber of Commerce, both political parties, all health care stakeholders, and even your own medical associations are fervently supporting, and actively promoting, paying you for value instead of work.

Value is defined by a set of statistical metrics calculated across the spectrum of services you provide, and some that you don’t. So for example, if Starbucks were to be paid for value, they would get say, $2 for a venti latte, plus a fluctuating amount based on the average temperature of their lattes, the ratio of espresso to milk, the percent of air in the foam, the time from door to latte, etc., over a representative period of say 90 days in year one and maybe 12 months in subsequent years. To enable latte valuation, all espresso machines would be fitted with special monitors interfaced to local cash registers and to centralized centers of value. The exact value-based bonus would be calculated by analyzing the statistical distribution of metrics across all coffee shops in the country, adjusted for regional and demographic variation of their clients.

If Howard Schultz would be notified tomorrow morning of a transition to value-based payment for coffee, he would most likely protest loudly, but at the same time he would find a way to get $10 for his lattes while the coffee debates are raging across the nation. And so would every independent coffee shop still in existence. Health care is of course much more complicated than making espresso drinks, but the principle is the same. Unless you find a way to keep your doors open during bad times, you will not be around to enjoy the fruits of your efforts to bring about the good times. Assuming you wish to continue selling coffee, there are two (legal) options to consider: sell fake lattes for less than $2, like they have in every self-respecting gas station, or do what Howard Schultz would do in a similar situation.

The Howard Schultz option for independent primary care could be summarized as the answer to the following question: what do I need to do in my practice, so that I can collect enough revenue to continue providing the excellent care my patients are accustomed to? Below are some suggestions that may allow you to do just that. You could look at these suggestions as encouragement to sell your soul to the devil, or you could look at them as an optimal way for creating enough breathing room for you, and your patients, until common sense prevails. If you are tempted to dismiss this, in view of the recent (partial) success of grassroots efforts to beat back the ABIM MOC, please keep in mind that by and large those who fought ABIM were board certified physicians in good standing. Fighting for a good cause does not mean that you first have to commit financial and professional suicide.

Beginning on January 1st, 2015, Medicare will be paying physicians for chronic care management (CCM) services, if and only if, a certified EHR is used in the practice. This is the first time Medicare is tying payment for a CPT code, to the use of specific technology, and it may very well be a harbinger of things to come. Medicare is essentially stating that unless you buy and use a government certified EHR (not just any EHR), it will refuse to pay you for any work (other than face to face visits) that you do for your chronically ill patients. It is fascinating to note that Medicare acknowledges that certified EHRs cannot help much with CCM services, and you may need other software products for this purpose. Nevertheless you must also purchase a certified EHR.

On February 12th, 2015 the Center for Medicare & Medicaid Innovation Center (CMMI) has announced a new payment model for cancer care, the Oncology Care Model (OCM), modeled after the CCM, but paying four times as much to oncology practices only. The OCM is going to enter pilot phase in 2016, and chances are it will be elevated to an official CPT code shortly thereafter.  Taking the CCM one step further, the oncology care management fee will be paid exclusively to practices that attest to currently mandated meaningful use levels (Stage 2 for now), although meaningful use has practically nothing to do with oncology care.

It is not implausible to assume that these are just the first steps in making collection and dissemination of clinical data, along with kickbacks to the tech and certification industry, a condition for practicing medicine. If you think you can somehow “escape” these mandates by dropping public insurance plans, you should note that the OCM pilot mandates participation of commercial insurance plans in this form of payment. Unlike the puny meaningful use incentives/penalties, both CCM and OCM fees can add up to large amounts of recurring revenues for a complex set of services. If you don’t have a certified EHR, your choices are to either continue performing these services for free, or cease to provide them altogether. Strangely enough, nobody seems to question the legality of such scheme.

Bottom Line

Go ahead and get yourself a (cheap) certified EHR, and use it sparingly if you so desire. Make sure you know how to get all the data out of the EHR, because chances are you will want to dump it when things get better. Keep in mind that even under the best case scenario, technology will not improve overnight. It takes several years to build (or refurbish) a good EHR, and EHR vendors are now operating within a regulatory pay for performance mentality, i.e. studying for the (certification) test and cheating to survive. Even if Medicare drops its ill-conceived meaningful use program tomorrow, it will take time to return to a competitive culture of excellence and customer service, yielding beneficial technology tools for your practice.

It is not likely that value-based payment models will disappear, or be reconfigured to measure benefits to your patients, because there are hundreds of billions of dollars in shareholders profits, and fabulous round trips to Davos, riding on this one simple innovation. It is equally unlikely that physician payments will grow in the near future, and there is every reason to assume that payments will decline sharply, as the system adjusts itself to serving increasing numbers of underinsured poor people. It will be very important for you to strike an optimal balance between keeping your costs down, and increasing your value-based revenues.

Finally, for those insisting that their practice is doing just fine without all this unsolicited advice, this may be so for now. And for a few fortunate physicians, it may be so for long enough to reach comfortable retirement. Perhaps a handful more would be able to extricate themselves from this mess by catering exclusively to the few that need not concern themselves with costs of anything.  Everybody else should find a way to collect $10 for their lattes.

Health care is a massive market…

America is spending $3 trillion on health care every year. Does that number include toothpaste? Surely toothpaste is very important to your health. How about baby powder, diapers, condoms, soap, lip balm, nail clippers, detergents, mops, vacuum cleaners, washing machines, smoke detectors, air filters and air bags? How about everything Nike sells, diet books, your gym membership, bicycles, skateboards, everything Sports Authority carries in its stores, and all Weight Watchers products? And then there is quinoa and edamame, spelt, flax, organic kale chips and those scrumptious gluten-free kelp smoothies. You can also count the entire budget of the EPA, the FAA, the CDC, the FDA and the USDA, and while at it let’s not forget the war on drugs, the war on poverty and the war on terror, and of course education and vacation, sunscreen, traffic lights, firefighters, police and those weirdly bluish ice-melting crystals for your driveway. It sure looks like we are spending all our money on caring for our health.

In America, we spend $3 trillion every year on medical care, not health care. Medical care is what you get mostly from doctors and nurses, mostly in hospitals or clinics, and mostly when you are sick or hurt. Medical care is most often associated with pain, suffering and fear, and is something most people, most of the time, don’t use, don’t need and don’t want. The new thinking says that if we could spend less money on medical care, we could spend more on Bluetooth enabled holographic toothpaste, and that this is a good thing. After all, most of our $3 trillion is spent on a small fraction of sick and elderly citizens, most of whom will never get better anyway. Wouldn’t it be more fun to spend our money on nice things for the majority who is basically healthy, so they can be even healthier, and perhaps forever healthy?

Also $3 trillion is too much money to spend on regular people, who truth be said can’t really afford it anymore, because according to none other than J.P. Morgan, “US labor compensation is now at a 50-year low relative to both company sales and US GDP”, while “[corporate] profit margins have reached levels not seen in decades”, and miraculously “reductions in wages and benefits explain the majority of the net improvement in margins” [emphasis in the original]. When your wages and benefits are at a 50 year low relative to GDP, courtesy of the general plutonomy, and your medical care expenses are at an all-time high relative to the same GDP, courtesy of the medical-industrial plutocrats, you have two basic choices. Start a revolution, or let yourself be wooed by the thieves. Revolutions are hard and very inconvenient for consumers, so sit back and be wooed.

Medical care is sick care. Sick care sounds depressing, and sick care is expensive. Sick care is what happens where health care fails. Health care is cheap and pleasant. Better health care will obviate the need for sick care. Ergo, we should invest heavily in health care right here, right now, and quit funding exorbitantly priced products and services for sick care, because soon, very soon, there will be no sick people. For some, midlife crisis means buying a red Porsche, for Google owners it means spending $1.5 billion on the fountain of youth. For Peter Thiel, it means actually becoming immortal. For CVS pharmacies it means changing the company name to CVS Health. For Apple it means releasing a plebian version of the fountain of youth called simply Health. And for the rest of us, it means paralyzing fear.

The best is behind us. The American Century is over. Ebola is going to kill us all, and if not Ebola then the measles will. And if not disease, then surely we will fall prey to the toddler invasion from Guatemala, or the long-range nuclear missiles of the Russian Empire, or the marauding bands of sociopaths roaming the Arabian desserts in Toyota pickup trucks, raping and decapitating everybody in their path, not to mention the global ice age descending on Boston with the fury of a theory scorned. History teaches us that every great nation has to fail and every governance model is destined to perish and all societies will eventually disintegrate. Today is our turn to die. But then the drums begin to bang and the stars fall from the sky, the moon turns red with blood and the trumpet sounds its call.

Behold the vision of the saints as they go marching in, masterfully weaving the Narcissistic obsessions of the young and healthy with the helplessness and impotence imposed on the marginalized masses. An Apple a day keeps the doctor away. We will solve all your medical care problems caused entirely by your failure to be healthy. We will manage your wellness, your food, your activity, your thoughts, your desires and your disillusion, and we will make sure that you function within optimal parameters. We will take preventive actions at the very first sign of malfunction, long before it becomes sickness or injury. We will keep you, your children and your children’s children, healthy and productive. This is our solemn promise to you and we may even keep it, if you obey us and always do right. As the sign that you are keeping this promise, you must strap this bracelet on every man and boy in your family, and yes, of course dear, womenfolk too.

Here is a free app if you agree to swallow our drugs, and here is a free test if you let us decide what to do with the results, and here is a free toaster if you get a mortgage, and here is free health insurance letting you have any doctor or hospital you want, as long as it’s the one we picked for you. Here is your freely elected representative, programmed to say what you want to hear, on a soft bluish background because we know from your genomic sequence that bluish colors engender your trust in us. No sweetie, we don’t think you’re stupid, but you are weak and frightened. We are just trying to do what’s best for you and we appreciate your input, your tweets, your blogs, your amusing comments, your die-ins and even a little arson and looting, if done in good taste. One day you will be grateful for our guidance and the limits we are setting for you now. Or maybe not, but by then you’ll all be dead anyway, so frankly darling, we don’t give a damn.