One of the simplest—and most disruptive—business ideas I’ve heard for U.S. health care reform is gaining momentum in downtown Seattle. It’s with a small group of primary care doctors at a company called Qliance, who don’t accept health insurance payments of any kind.
I made a beeline over to the Qliance office after hearing about this in a story Greg wrote a few weeks ago about Nick Hanauer, one of the early investors in Amazon. Hanauer, an investor in Qliance, said health insurance companies despise this idea, and he loves it. So naturally, I had to learn more about what this startup is trying to accomplish from its CEO, Norman Wu.
Here’s the problem they are trying to solve: American insurance companies gobble up about 40 cents of every dollar spent on health care for all the red-tape claims processing that goes on, and for their profits, Wu says. If primary care doctors decide to play ball in this system, the numbers tell an ugly story. They generally need to have a roster of patients 2,500 to 3,500 deep, whip through 25 to 30 appointments with patients each day, allocate less than 15 minutes for each patient, refer them unnecessarily to specialists, and move so fast they can barely remember anyone’s name.
Too much time, and staff energy, is wasted on haggling with insurance companies, and too little time doctoring properly, Wu says. About 90 percent of medical issues can be handled simply by a primary care doc, but these insurance hassles have turned this into a dying form of medicine.
“It’s akin to using your car insurance to pay for a new battery or a set of tires,” Wu says. “It doesn’t make sense.”
Instead, Qliance has set up what it calls “direct practice” which essentially freezes out the health insurers and deals directly with the patients. The patient hands over a credit card to get a recurring monthly membership fee sent to Qliance, for $39 to $79 a month. In return, the patient gets unrestricted use of the primary care service like a customer would get at a health club. If the patient has a fever and cough to get checked out, he or she simply calls to make an appointment, and gets in to see the doctor the same day, for 30 to 60 minutes. The doctor isn’t in such a hurry. He or she only has a roster of 800 patients, and generally books 10 to 12 appointments a day, while also being available for e-mail and phone consultations. The place has unrestricted, 7-day a week access to its physicians.
One thing most people don’t realize is how radically this changes the doctors’ perspective on medicine. The current insurance-based system encourages doctors to run all kinds of procedures and prescribe all kinds of drugs, because that’s how they get paid by insurers. When they get paid directly by the patient, regardless of what they do, the doctors’ perspective on what needs to be done suddenly changes, Wu says.
“They have to order up some procedure so they can justify having spent some time with you,” Wu says of the existing insurance-driven model. “They do unnecessary procedures, order up unnecessary repeat visits, or refer you to specialists. The cost just goes up and up, and the quality goes down.” He adds, “We don’t want to provide an incentive to push things on patients they don’t need. Our customer is the patient, not the insurance company.”
This being health care delivery, there are a lot of complex moving parts. Quite a few tests and procedures, like X-rays, EKG’s, or stitches are included in the Qliance monthly membership, but if a more complex treatment is needed, it can be added as an extra cost. If the patient needs a prescription,
