Will fee-for-service system return?
Fee for service is making a comeback, contends health care futurist Leland R. Kaiser, who predicts health care is destined to become the leading business in America. A growing number of physicians are treating patients who pay them monthly or yearly fees — a retainer, in other words — for such benefits as not having to wait for appointments, controlling the procedures or medications they want, and even house calls and 24-hour access. This new practice is called "boutique" or "concierge" medicine.
Some retainer practices accept insurance for covered expenses, and the monthly or annual fees are for perks such as the house calls and no-wait appointments. Other practices refuse insurance altogether, and patients pay for all medical expenses in addition to the retainer fee.
The American Medical Association (AMA), in its guideline on retainer medicine, determined that such practices "appear to be consistent with a system based on pluralistic means of financing and delivery of medical care."
Under AMA principles of medical ethics, physicians are "free to choose the environment in which to provide medical care" and, except for emergencies, are free to choose their patients. The AMA urges that a retainer provider not present the arrangement as a way to more or better diagnostic and therapeutic services, however.
The standard of care cannot be based on a patient’s ability to pay, so a discrepancy in the quality of medical decisions in a mixed practice (in which the provider treats retainer patients and insurance-only patients) "would be particularly condemnable," the AMA guidelines state. On the other hand, the AMA adds, it is possible that the personalized attention and patient satisfaction that could result from a retainer arrangement could lead to better patient-physician communication and patient compliance, which could improve outcomes in certain cases.
The response from insurance companies has been mixed. Some networks are including concierge practitioners in their network of providers (still only paying for regular, covered expenses). Others have determined that the idea of retainer contracts is in opposition to their mission to provide health care to as many people as possible and for member physicians to accept new health plan members without restrictions.
Kaiser says, in a democratic, capitalistic society, people with more means should be able to spend it any way they please — whether on a new car or concierge medical care. He was quoted in a recent issue of Physicians Practice Digest as predicting that, within a decade, between 30% and 40% of all physician visits will be fee-for-service visits.
Access professionals cautious and skeptical
Access professionals asked to share with Hospital Access Management their opinion of this emerging practice came down mostly on the side of caution or skepticism. Pete Kraus, CHAM, business analyst for patient accounts services at Emory University Hospital in Atlanta, calls arguments made in support of concierge medicine "a curious mix of common sense and out-of-touch fantasy."
Evidence of a fee-for-service comeback may well reflect a trend of sorts, Kraus agrees, noting that people of means can, and do, pay out of their pockets for extra health care services. "There’s nothing wrong with that. As Dr. Kaiser points out, they have the right to spend their money any way they want," he notes.
Kraus says he’s also OK in principle with the assertion by Kaiser that increases in health care spending reflect a legitimate growth of the economy. "If that’s where demand is, so be it. It’s a little off-putting that he does not seem interested in studying the causes of growth as a potential means of cost control."
He contends, however, that Kaiser possibly enters the realm of fantasy if he believes controlling costs by restricting expensive services to those who can pay out-of-pocket should drive public policy.
"The general population may not object to the rich buying a big house, a fancy car, or a boat," Kraus adds. "It’s something to which everyone can aspire. But health care is more basic. To the extent that effective but costly procedures become part of the routine standard of care, people expect their insurance plans to cover them."
Some physicians, such as John Blanchard, MD, however, say what critics call "wealthcare" is just putting control of health care back in the hands of patients. He says the relationship between patients and physicians today is almost adversarial, and he blames that on our system of health insurance. "Essentially, health care is not subject to free-market forces," says Blanchard, whose practice has offices in Clarkston and Grosse Pointe Woods, MI. "Two competing primary care physicians are not really competing with each other. They sign up with an insurance company, and they get all these patients. But the competition is at the insurance level, not at the provider level," he notes. With that scenario, Blanchard contends, "you drive down quality and drive up cost. A free market drives down cost and drives up quality."
In its 2002 Council on Ethical and Judicial Affairs report on retainer medicine, the AMA addresses the dilemma posed when a traditional practice converts to retainer care. "If a practice switches from regular, insurance-paid care to retainer care, and low-income patients can’t afford to sign on, does that create a burden for the patients?" the report asks.
Blanchard says he and other retainer practitioners build subsidized care and free care into their practices, to maintain their ethical responsibilities to render care to those in need. "If people can’t afford my practice, they pay what they can afford."
Beth Keith, CHAM, senior management consultant with Superior Consultant Company Inc., notes, with the tendency of all things to cycle, a return to a fee-for-service model is possible. She predicts, however, that if group health plans made the changes foreseen by Kaiser, the result would be a distinct, two-tier system that would be detrimental to many health care organizations. "Many facilities struggle now to maintain under the deep discounts for managed care," Keith points out. "If all the people who can afford to pay go elsewhere, you would be left with only the limited, no-pay patients, and that will not sustain an organization."
"If memory serves me correctly," she adds, "the opponents of national health care coverage used this very example — the ability of the rich to go to fee for service and everyone else getting another level of care — as being one of the major reasons we should not embrace that form of coverage."
While the discussion of concierge medicine at present centers around physician practices, Keith says, she cannot confine her perspective to that part of the health care environment. "I believe the impact to health care institutions could be serious," she says. "The highly touted boutique facilities will take all the paying patients, and the remainder of the facilities will suffer financially — some, I am afraid, to the point of closing."
Gillian Cappiello, CHAM, senior director for access services and chief privacy officer at Chicago’s Swedish Covenant Hospital, agrees that a shift to the scenario described by Kaiser "certainly would impact hospitals. "There are social, rather than access, issues here" she says. "Although access in the greater sense would be an issue if there were not enough physicians to see the managed care, state and federally funded, or uninsured poor patients.
"We need to find a way to incorporate both [types of care]," Cappiello suggests. "I don’t disagree with the concept so long as physicians had to see some of all kinds of patients and provide a certain amount of free care." She notes, while "everyone is fed up with managed care, the problem lies with the insurance companies getting rich from it, not with access and choices."
Kaiser and other proponents of this free market form of medicine say a standard of excellence should be met in all cases — in the same way, those who go to Taco Bell should expect good food, even if they can’t afford to eat at the Ritz-Carlton Hotel.
Kraus says such talk of quality of care for all tiers sidesteps the issue. "[Kaiser] is correct that quality should not be cost-driven, but potential denial of services is a far more contentious issue. "Health insurance is supposed to be about pooling risk so people of ordinary means can get the services they need, even if the cost is extraordinary," he adds. "Dr. Kaiser’s comments do not satisfactorily address the shortcomings of our system as it is currently practiced."