Medical Tuesday Blog

The Fee-For-Service Model Is Not What Broke The System

May 22

Written by: Del Meyer
05/22/2017 6:19 AM 

Healthcare Executives Network

Grace Cleaves • The Forbes article describes this ironic paradigm: we needed our docs to be excellent clinicians and we trained them to do that. Now we need them to be business savvy change leaders. We didn’t train them to do that. We wanted them to know how many bones were in our hands, not how to read a P&L. We ask a lot of our physicians, including urging the transition to embrace leading and entrepreneurship in their set of tools.

George Burns • The fee-for-service model is not what broke the system, it is just a coincidence.
What broke the system was time and the economic downturn. A medical practice or a hospital etc is a business and should be run like one in order to survive. However, medical practitioners are not business people and cannot run a business.

Many practices were started in boom times when money was easily available and at low interest rates. HMO were dishing out money under the capitation model. The money was good.

But then the VC money dried up (HMO failures, New Century bankruptcy etc) and the insurers started reigning in those whose capitation balances had become unmanageable etc. There was a brief pause with Medicare Part D, but after a while the trend continued. Then came the economic downturn, and after 5+ years of it, medical practices etc are facing the same difficulties that are facing all other small businesses. There is no rational reason to think that medical practices are not small businesses.

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Arlen Meyers, MD, MBA • To thrive, doctors need to practice Othercare. That means:
1. Leading change
2. Manage their practices efficiently and effectively
3. Adopting an innovative and entrepreneurial mindset
4. Using non-face-to face and alternative care delivery models using digital health technologies
5. Consolidating to take advantage of efficiencies of scale and the elimination of fee for service medicine

There is increasing pressure on medical schools to teach this stuff. Otherwise they are teaching their graduates to fight the last war with blanks in their rifles before sending them over the top.

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