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Excerpt
The Thatcher solution could be called “primary managed care,” and the way it would work in the United States is described at the conclusion of an important new book by a team of physicians and an expert in healthcare systems entitled, Reviving Primary Care.1 If new Medicare legislation were altered this way, it would stop the relentless trend toward large managed care systems and minimal competition. Systems that already exist could participate, but they would be challenged by small, local, physician-run practices. There would be more choice at less cost.
The effect of this approach on patient choice and physician freedom is bracing; primary managed care contracts could be held by groups as small as five clinicians, running practices as small as 10,000 enrollees or subscribers. Instead of patients and doctors being pushed into a few large managed care systems, which reduce choice and competition, the primary managed care idea would spawn hundreds of small practices that reflect the local tastes, faiths, and values of this diverse, multicultural nation. Accountability would be much better; the boss would be your doctor or mine, not some corporate headquarters telling the doctor how to treat me. All the advantages of a viable marketplace would be allowed to flourish.
Primary managed care rests on a couple of basic insights. First, the central idea behind managed care is for patients' personally chosen physician or group to maintain their health, catch problems early, and manage chronic conditions before they fester into costly acute crises. Most of that can be done by a primary-care group, in consultation with specialists when needed. Second, physicians can best run their own practices, but managed care contracts should have balanced, modest incentives so that physicians are not tempted by big bucks to work their patients or the system.
Keeping the incentive structure modest and balanced involves two ideas. Most primary care is low-risk, and the risk can be capped, for example, at $7,500 per patient per year. That is, if the costs of a patient's health care exceed $7,500 in a year, the employer or insurer would draw on a reserve fund to pay the bills.
Besides keeping risk small so that small groups can afford to hold a contract, the British approach mixes incentives to avoid strong temptations to exploit the system. Capitation (a flat amount per enrollee per year) accounts for only part of the contract payments, rather than for all payments in a high-stakes game. There also is a budget to cover most operating expenses and bonuses for reaching certain targets in clinical prevention. In short, physicians get paid three ways, each with incentives that check the other two.
But the most important idea is to focus managed care contracts for the full range of services needed to deliver comprehensive primary care. These include home health care, physical, and rehabilitative therapies, chiropractic services, the nonesoteric drugs, minor surgery, various tests, and more common specialty consultations. One can debate endlessly over what should be included, but the idea that Congress needs to grasp is that Medicare initially should limit physician-run groups to primary care. This idea avoids lumping high-cost procedures with normal care so that only large oligopolies can handle the high risks involved. Instead, Medicare or its intermediaries would contract separately for secondary and subspecialty services.
