Learn the System, Beat the System
As more medical students and residents gain interest in DPC and earlier in their medical training, an effort should be made to educate learners on the current system. Most of the bushwhackers and pioneers of the movement left fee for service (FFS) because they experienced the system and could not see a better way but to leave the system. Prior to leaving, many of them learned the system intricately in hopes of finding a way to make working inside the system align with their values. Many of the settlers cohort like myself started straight out of residency and never experienced the “original sin” of FFS in private practice. While the DPC concept has started to spread in the doctor community, most people overall still either haven’t heard of it or don’t get it. DPC physicians still need to educate other physicians and potential patients on the model, and the only way to do so properly is to understand the FFS model which helps explain why we do what we do and how we got here.
Here are 10 basic principles to better understand FFS
Patients pay their insurance companies which gives them an insurance product which has parameters including premium, deductible, and co insurance. Principle #1: Coverage does not equal care.
Some patients pay co pays which are arbitrary amounts dictated by insurance companies and have nothing to do with cost of care. Principle #2: Insurance companies’ primary objective is to find ways to decrease utilization (reduce “medical loss” in their terms).
Insurance companies reimburse physicians for services rendered. Principle #3: All FFS doctors work for the insurance companies
Reimbursement is based on a group of mostly specialists who wheel and deal to determine what services are worth. Principle #4 The fee for service system favors specialists and their procedures
Reimbursement depends on knowledge of ICD and CPT codes. Those who code better make more. Principle #5: In FFS, level of care and pay are not related
Undervaluation of primary care services means less money per patient, so more patients need to be seen to maintain salary and overhead. Principle #6: FFS primary care necessitates high patient volumes
More patients means more admin work which means more staff and higher overhead and more patients to maintain the higher overhead Principle #7: FFS creates an unsustainable death spiral which is why there are fewer and fewer independent FFS primary care practices
FFS requires “heads in the door” for payment, meaning payment only occurs when a patient walks into the office and is seen. Principle #8: Care coordination and innovation (such as telemedicine) are not reimbursed and stifled, respectively, by FFS.
Hospital systems buy up primary care as “loss leaders” and push the physicians to become referralists. Principle #9: Large system primary care rewards shorter visits and more referrals, taking away much of the care PCPs can deliver
Insurance companies and hospital systems have large billing and coding departments to shield doctors from having the burden of understanding how much care costs. Principle #10: Doctors who have no understanding of how much things cost or how money moves in healthcare become subject to the rule of MBAs and low level administrators who have no medical background.
There is much more to be said about FFS and how we got to DPC, but these 10 principles are a good start. For those interested more in the business side of how healthcare works, Dr. Eric Bricker has some fantastic videos and now has a youtube page.
This is the most complete and accurate list I have seen of the issues around Primary Care and FFS. As always, Kenneth has honed in on the central issues. As the first bushwacker for DPC, I am pleased to see this in print. My only comment is that there is one issue that is more complex than he indicates. The most schizophrenic issue around health insurance is the simultaneous pressures to reduce utilization (which would improve their margins) and to increase pricing (since they are constrained to a fixed profit margin by law). Thus, once they have obtained their 15% profit, the only way to increase their profit is to allow pricing and utilization to rise (15% of a large number is more than 15% of a small number). The only thing you can count on in this bizarre game is that utilization and payment will have nothing to do with what patients and doctors determine to be optimal care. It also suspect that primary care seems to be the place where money is “saved” in the system and massive spending in specialty, invasive and hospital care seem to be where the big money goes to finance both insurance companies and the enormous admin costs of this whole crazy system (a lose-lose electronic arms race in which money is burned both on the payor and provider sides) – guaranteeing that American health care will be at once the most expensive and least effective system in the industrial world.