Employer-Directed Contracting Stanley N. Schwartz MD FACP Healthcare Consultant, The Holmes Organisation Tallgrass Analytics LLC

Stan Schwartz MD: Direct Primary Care models Jim Millaway (The Holmes Organisation) Models that transform specialty care Ann Paul (St John/Oklahoma Health Initiatives & Brice Habeck (QuikTrip Corporation): The Accountable Care Organization commercial model

Warren Buffett “a tapeworm eating, you know, at our economic body.”

What are you buying? Healthcare? Insurance?

Direct Primary Care (DPC)

Insurance Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.

Why insure something you are almost certain to use— or certainly should use?

What if you bought insurance for your gasoline? Cost of gas based on risk of future use, not current use. Purchases at an out-of-network station would cost way more Trips out of town would need pre-authorization Someone at the next pump might be paying a lot more or a lot less for the same gas No card, higher price—or no gas at all!

Insurance or pre-payment?

Terms Direct Primary Care Membership Care Concierge Medicine

Two distinct service types (generalizations) Direct Primary CareConcierge Typical Panel sizeusually less than1000usually less than 600 Retainer$50-80 / month$ /month Payablemonthlyquarterly or annually 24/7 cell accessusually notalmost always Instant appointmentssometimesusually Insurancenot for primary care covered services billed to insurance Purchased throughemployerindividual and private Location Typically at/near workplace often chosen close to home

Direct Primary Care Traditional Primary Care Employed byindependent grouphealth system Physician Compensation Typically salary + Typically volume, usually relative value units, (“production”) + Non-face-to-face services part of work in the salary structure Most not compensated* Specialty Care may be chosen based on available prices and discounts usually within system; many services provided at hospital rates Coordination Often do not share EHR Shared EHR creates single record Hospital Care single or multiple affiliations provided by system * chronic care in 2015 recognized under Medicare

New Chronic Care Payment by Medicare to start in 2015 monthly payment of $41.92 “multiple, significant chronic conditions” requiring care plans, coordination and medication management

Other DPC services generic dispensing at cost or service markup discount arrangements with radiology and other ancillary services Common laboratory tests may be covered Many offer 24/7 electronic communication with providers (patient portals) Many offer same-day or next-day appointments

Potential benefits to employers early intervention reduced loss of work productivity “Working mother of three with diabetes”

Drawbacks? Lack of infrastructure and resources for high-level clinical quality measurements and population health activities Being outside an integrated system could produce friction at points of transitions of care Exacerbate primary care shortage? Or stem primary care attrition due to career changes and retirement?

The Equalizer Connected physicians and entities can share medical information Referral and communication pathway Provider-agnostic and network-agnostic Data usually extremely current

“Price is what you pay. Value is what you get.”