$1 Primary Care = $6 Saved on Healthcare

primary care vs. emergency care

Robert W. Morrow, M.D.

That is a simple equation that is truer now than ever, since the cost of care once someone is really sick continues to rise quickly.

Primary care decreases the need for expensive tests and procedures, and focuses on preventing and managing chronic health issues. Catch things early and over time, with the help of your trusted, neighborhood doctor (if you can find one), you will see better public-health indices across the board.

I have had an artisanal* small family practice for 37 years, and have remained focused on those who chose me for their care.  For me, the evolution of the “healthcare system” has increased the uncertainty of my practice, specifically uncertainty in what and when I will get paid for my work.

If I sold beer, you would pay the price of the beer, and that number would cover the costs to make and distribute it, as well some profit.

Every day, however, I perform health evaluations and treatments with no clear expectation of how much, or when, I will be paid.  Despite many years of experience on the front lines of healthcare, I simply have no way to predict what charges a healthcare payer will approve and finally send my way.  There is no guaranteed salary for serving my community, only a debilitating uncertainty about keeping my practice afloat.

Payers may make noises about the importance of primary care, but in practice they are doing all they can to reduce or deny reimbursement for my work. It is not unusual for a small primary care office in the New York City area to have less than one month’s operating cash on hand.

Like mine.

How has this happened to my colleagues and to me? And to you?

First, you need to understand that the “system” in the term “healthcare system” is not one that is tuned to providing excellent care.  It has been bastardized by the financialization of the economy in general.  A financialized healthcare system puts far more emphasis on the value of its stock, than the health of those whom it  ostensibly serves.

Rapidly expanding and consolidating health systems have seemed inevitable and perhaps even an improvement. Larger systems can get higher payments and find efficiencies, right?  Yes to the first; no to the second.

Your local health system — let’s call it MegaCare Wellness — is busy buying and building.

The rule of financialization is that much more money can be made by massive borrowing to buy competing healthcare offices and hospitals, than by worrying about the messy details of keeping people healthy.  To play the financialization game requires that they take on debt by issuing bonds and then let Wall Street dice up those debt obligations  to sell to the next sucker down the line.

If that sounds familiar, that is because this is exactly the same playbook that Wall Street used in the notorious “sub-prime” crisis of 2007 and 2008.

Financial transactions on this scale — $100’s of millions a pop — immediately reward the leaders of the big healthcare systems in a way that a really good group of artisanal healthcare providers never could.  A patient visit or even an expensive procedure brings in nothing when compared to the acquisition of a competitive system in a neighboring region.

To borrow, a healthcare corporation needs a good balance sheet and a convincing business plan.  So the leaders of these behemoths work hard to lay folks off and delay payments to vendors (including healthcare providers like me).  And while they are at it, they engineer the take- over of their workers’ retirement funds and reset the seniority clock to year zero, further reducing their obligations.

They also change work rules.  You will know this has happened when no one answers the phone at your clinic, or if you call about a billing mistake and you get only a robot response (if you are lucky), or a collection agency.

You may also have noticed your healthcare providers are often grumpy. The doctor and nurse seem more hurried and harried. Waits are longer, there is a strain on simple housekeeping obvious in the bulging waste bins.

Heathcare According to LIBOR

When interest rates were low, bonds were cheap to obtain and service.  As interest rates rise, MegaCare Wellness may well get into trouble.  The increase in debt by the massive healthcare institutions means that they are vulnerable to financial shocks that have no direct relationship to the delivery of healthcare.

And those shocks are already starting to course their way through the healthcare bloodstream.   For example, publicly traded Community Health Systems Inc.  is struggling to refinance only $2 billion of its total debt, which is well over $10 billion.

All this means that healthcare systems will push ever harder to reduce their costs of delivering healthcare to you.  They have a lot of tricks up their sleeve.  If you can stomach it, and it does not make you sick enough to see a doctor, then I’ll share some of those secrets in a subsequent post.

* Artisanal-Made in a traditional or non-mechanized way, using high-quality ingredients; or, pertaining to or noting a high-quality or distinctive product made in small quantities, usually by hand or using traditional methods.

 

5 thoughts on “$1 Primary Care = $6 Saved on Healthcare

  1. I agree with Dr. Morrow that our politicized health care system based entirely on private health insurers is contra productive to good preventative medicine. At age 93 I can still remember fondly our family doctor visiting the house with his little black bag and taking care of the measles or a cold or referring us to a hospital if it was more serious. Financilization of the system is endemic and destructive in the long run.

    Nevertheless I think the article may not be an accurate description of a visit to a primary care doctor at a big corporate operation. Kaiser is the first and biggest HMO. I have always found my primary care doctors patient and ready to talk, not harried or in a hurry to get to the next patient. At kaiser each primary doctor may have as much as 2500 patients assigned to them but most are from company plans and seldom if ever use the service. Wait time for an apt. is not too long. I have found the emergency rooms at Kaiser are astounding in diagnostics and treatment with the latest equipment. With the size of our population today I don’t think we can go back to the neighborhood doctor with his little black bag visiting his patients. I
    would like to see Dr. Morrow’s recommendations on how a national health plan could be structured to fill the needs of a population close to three times as large as our pre WW II population.

    • Kaiser is interesting, as an isolated-insurer/provider/public health presence. It has infrequently gained a foothold elsewhere, and generally failed in NYS and other places. Kaiser has no financial interest in pushing people to emergency rooms or admitting them or keeping them in hospital or doing extra unnecessary procedures, since they pay themselves. Their structure is unique and resembles the British system but with larger ambulatory centers. Many of my friends who are poor reflect heir difficulties with Kaiser, but I know of no good comparative effectiveness studies.
      I am unaware of any important number of Kaiser facilities in poor neighborhoods. I do not believe they have a robust medicaid program.
      In NYC, the HIP health insurance plan had many neighborhood offices run indirectly by the insurance plan, these offices were divested when Clinton’s plan for NHI failed in the 90’s. They were spun off, failed, then absorbed in other large health systems. They have changed hands many times, presumably at someone’s profit.
      Seattle’s Grouo Health, run by unions largely, is a similar model, but unique. They are pioneers who have not been followed, generally.
      National health built on networks of community based health providers of primary care is a successful model around the world, and could be the substrate for implementation experiments based on community centered prevention. I do that work as implementation experiments, and it is quite successful, but not funded nor widely reported.

      • Bob.. Kaiser is far from perfect but for an old soldier it looks like home to me. Living in a rural area and sometimes having really serious medical problems like almost cutting off my finger, or a serious bladder infection, or a sliver under a finger nail, etc. i have found their emergency rooms that I visited in the middle of the night diagnostically competent and very quick to execute a ‘fix’, I have also observed that there are vast differences in the quality of specialists. Kaiser is also extremely reluctant to to let members go outside for “second opinions”. It is also important for patients to “shop” for a good primary care physician in the system. Any way they have helped keep me alive for the last 23 years after heart attacks et al.
        I do feel that as a nation we can do much better than “the AFA for all of our citizens.

  2. I find this a very interesting article. Too bad it was written before the author could comment on the Amazon-Berkshire-JP Morgan plan to shake up the industry, which some pundits blamed for the stockmarket jitters of Jan. 30. I trust Dr. Morrow will comment on that development in future. While certain politicians/elected officials spout off about a grandiose plan for “fixing” our wretched physical infrastructure, healthcare remains unaffordable for many, many Americans. In the wealthiest nation on Earth–the scales tipped by the monstrously fat cats at the top, of course–is this not a disgrace? Talk about inequality!! A national (i.e. “nationalized”) health plan for all? “That’s SOCIALISM!!” every yahoo in the country will scream in unison. Such an ignorant, ignorant nation are we! Under such a system, physicians would be salaried employees serving the public. I know there would be much resistance from within the medical community. With all due respect to Dr. Morrow, who may be a sterling doctor and overall person, it seems to me that many physicians, especially the uber-high-priced specialists, expect to be very richly rewarded financially in their careers as payback for their years of schooling. To all of this I am compelled to inquire: Whatever became of the Hippocratic Oath? Other than those privileged to have “Cadillac level” health plans, such as our wonderful “representatives” in the US Congress, I certainly think the majority of our fellow citizens agree that the current “system”–the result of the anarchy of capitalism, though not many of us Americans can dare utter such a phrase!–is BROKEN. Not unlike Amtrak! As it seems increasingly dangerous to ride the rails, it is very, very dangerous to be poor and have serious health issues in this nation.

  3. Greg-more will follow! We do have a need to focus on primary care, which is wildly popular with students, who wish to do good with their lives. The medical schools tend to whack them out of that with either ‘your much too smart for primary community care’ or ‘primary care is too hard, you need to know too much.’ Take your pick or use both hammers on the students, charge them super fees, and discourage them from low paying jobs.
    We can -WE CAN!-prevent a host of diseases with good primary care and attention to the social determinants such as poverty, poor housing, dangerous work, etc. We have done this. But we need to provide funds and training, both of which are being swallowed by profound tax cuts for the rich. But we have interesting and successful models, and eager students.
    This blog will focus on the positive as well as the imminent threats posed by corporate medicine, and its focus on transactional profits as opposed to scientific health care strategies.

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