Fixing Healthcare Part 3A: The organization of care

In order to implement the GHE accountable care organizations (ACO’s) would have to be created.  ACO’s are large group of physicians who would be responsible for the complete care of the several 100,000 lives who have enrolled with them. The Mayo clinic and Kaiser Permanente are groups that have already functioned in this way for decades. 

However, medical groups have been moving in this direction for a number of years so new groups could form to function in this coordinated fashion.  As an example in Rhode Island one could conceive of a metro group that would include Rhode Island and Miriam hospitals (med/surg/peds) along with Women and Infant’s (Ob/Gyn) and Butler/Bradley (psych) and all the physicians who admit to those institutions.  Another group might be northern Rhode Island and include Roger Williams, Fatima, and Landmark.

Patients choose the group they wish to belong to and groups are paid on a monthly basis.  If someone moves from Boston to Chicago they can start up with a new group at the first of the month.   If they don’t like the group they are in they can move to the group across town.

Compensation: Groups could design whatever compensation system they deemed appropriate.  However, the fee for service model would be a non-starter so all groups would have some sort of salary model. 

The following is a model I would propose that would quickly mitigate health care expenditures for the group.  Physicians would be compensated with a base salary plus incentives for care outcomes, and patient satisfaction.  There could be additional incentives for providers who create programs or procedures that improve outcomes or efficiency.  Different specialties would have additional incentives.  For instance, the specialty of primary care would have incentives for lifestyle improvements and screening compliance.  Surgeons would be would have incentives for weighted* surgical outcomes and low morbidity.  Furthermore all of these metrics would be public information so patients can make informed judgment about what group they choose to belong to. 

           

Another adjustment that, introduced over time, would create significant savings would be to make the base salary the same for all doctors regardless of specialty.  Specialists are not any more talented or intelligent than primary care physicians.  The only rational reason to compensate them at a higher level is that they have deferred salary by extending their training.  This could be addressed by either paying all doctors in training the base salary or having groups that hire specialist pay them the difference between their training salary and the base for the number of years beyond the minimum (3) they spent in additional training.  The object would not be to increase the pay of primary care but to have specialists regress to that base and thus create savings.

Such a system then shifts the incentive from adding care to optimizing care thus correcting the fundamental underlying problem with the cost of healthcare. All this can be done by restructuring medicine in a direction it is already heading and changing compensation from fee for service to salary plus incentives.