Health Care System Reform

There are four constants in our health care delivery and financing system:

1. Patients
2. Physicians
3. Agents
4. Government Health Plans

Reasons I have not included other entities as constants are:

Private health plans that are mostly sponsored by employers come and go for the patients and for the employers. Hospitals and other facilities are the tools of the physicians and they are used, or not used, by the physicians depending on their condition and level of technology. The major insurers have moved into administrative roles for the government insurance plans and have been in those roles for the employers plans since the 1960s. The arrow now points to a dramatic increase in government plans and a decrease in employer plans. The private individual and small group plans provide partial and very limited coverage for a small part of the population. They will play no role in the healthcare system that is emerging. The premium for healthcare is now split in the following percentages:

 Medicare Advantage          Experience 2008     Possible Change
Insurers (Administration)            13%         13%
Hospitals and Other Facilities       35%         35%
Physicians and other Medical         24%         25%
Drugs                                 3%          3%
Medical Administration                2%          2%
Physician Bonuses                     7%         11%
Insurer Profits                      16%         11%

In order to improve the delivery system and to change the above percentages to the Possible Change amounts shown above, the physicians and the agents are going to have to reorganize the delivery system into cooperative teams. The physicians must also drive the development and design of the facilities they use so as to achieve good health outcomes for patients within the budgets of the government plans. The current systems do not achieve these ends because the physicians, hospitals, and insurers are at loggerheads. They game each other for the money paid by government. Given who the players are in the game, if it continues as it is being played, the physicians and the agents and, ultimately, the patients will be defeated. We can easily fix it now but only for enlightened team players.

Here are the steps and the time frame for our market area:

1. Complete the investments for the nine Local Provider Medical Teams(PMTs) needed to serve the patients in the Greater Houston Area. $1,200,000 has been secured and $2,000,000 is still needed. It must come from the participating physicians or they won’t work to cause the reforms of the system.
2. Define the territories by ZIP Codes and target markets.
3. Get teams for the hospitals in each PMT service area.
4. Get PCPs for each team (minimum of 20).
5. Get top fee and profit sharing agreements with solid Medicare Advantage and ACO Plans.
6. Get an agency force for each PMT that can enroll at least 100 members for each Primary Care Physician each year.
7. Get agency agreements with each insurer that pays top commissions that are vested.
8. Develop open source EMR and claims systems for the PMT management company and PMTs that is free for all participating physician offices. Developmental capital is $300,000.
9. Partner with a TPA and get delegated claims from each of the insurers.
10. Partner with a Health Insurance Company for the Senior Patient Association’s member benefits.
11. Build three hospitals on the super model in SE, SW, and NE. Get physician investors and co-op patient member investors for each facility that will capitalize for $5,000,000 and will sign a facility lease from developers. Each hospital will cost about $17,000,000.
12. Build ten super clinics next to the hospitals that the PMT physicians will use like executive office space. You will want the specialist teams there.
13. Fund technology for state-of-the art treatments for your patients which may have to be done in other countries that are more advanced in medicine than we are. Capital requirement for this is $3,000,000.
14. Beat back the cost of drugs.
15. Each PMT will by its operation and through the funding of it administration support a co-op clinic in each service area. These will care for everyone in need of care in the area and help stop the spread of disease among the patients in the areas we are serving and it is supported by the participating physicians, patients, and volunteers in the communities. Good medicine, good public relations and good marketing.

All that is left now is the paperwork and the active participation of those who see the future and get the point of the mission.