Marcus Welby Is Dead - Long Live Marcus Welby

One of the core tenets of disruptive innovation is to use technology to transfer services from costly, expertise-intensive settings into more affordable, convenient, and accessible venues. Doctors from Seattle to South Carolina are demonstrating exactly that by removing the 40% insurance bureaucracy tax from healthcare.

As Dr. Jason Hwang, co-author of the Innovator's Prescription, has stated, one of the core tenets of disruptive innovation is to use technology to transfer services from costly, expertise-intensive settings into more affordable, convenient, and accessible venues. Doctors from Seattle to South Carolina are demonstrating exactly that by removing the 40% "insurance bureaucracy tax" from healthcare. You might think of it as "two parts Marcus Welby and one part Steve Jobs." The results have been staggering with a 40-80% reduction in the most expensive facets of healthcare (surgeries, scans, specialist and ER visits).

Primary care physicians consistently state that 2/3 of patient office visits could be done remotely via phone or email, but they are disincented from doing this with the convoluted reimbursement models of present day health insurance. If doctors don't see the whites of your eyes, they won't get reimbursed so the result is people taking half their day to get to/from their doctor's office, sit in a waiting room, wait in the exam room and then get 7 minutes with their physician not to mention dealing with all the billing hassles.

Instead, modern day Marcus Welbys are available via electronic means. For example, one physician operating in this new model shared how he hasn't seen a patient with Shingles in five years. His patients simply take a picture of their symptoms with their smartphone and email it to him to verify that they have Shingles. In a few minutes, he can order a prescription and everyone has saved time and money rather than waiting days to get into their doctor. After all, what location is more convenient than one's home?

Some Direct Primary Care providers such as WhiteGlove Health and Organic Medicine Now take it a step further and make house calls that harken back to the days of your family doctor stopping by your house just a few decades ago. Beyond that, they provide simple, yet sophisticated, technology tools for further patient convenience and savings that allow them to cut administrative overhead by 80% compared to a typical medical practice. Rather than patients filling out mountains of paperwork for what seems like the hundredth time, all patient-provider interactions can be done at the patients' convenience whether it's filling out forms, scheduling appointments or requesting medication refills.

Marcus Welby wouldn't recognize mainstream medicine today. In Welby's time, we didn't insure the equivalent of a car tune-up but we do that in most health plans today. Nor did we have insurance middlemen who add no value sitting in between you and your family doctor. Two related items should be done to save individuals, businesses and government a huge sum of money on healthcare.

Make Primary Care More Accessible
IBM and other large employers have studied healthcare costs around the world. IBM alone spends roughly $2 billion per year on healthcare. The findings of their studies came to a surprisingly simple conclusion where countries were getting the best bang for the buck from their healthcare spend: More primary care access led to a healthier population which, in turn, led to less money spent. MedLion, profiled as The Most Important Organization in Silicon Valley No One Has Heard About, has shown they can deliver high quality care with prices that are affordable for low-income workers. This model is referred to as Direct Primary Care (DPC) or Direct Patient Centered Medical Homes (D-PCMH).

As we've seen in Massachusetts, health reform exacerbated a shortage of primary care physicians. Even before that, half of primary care physicians said they would leave medicine if they could. The biggest reason was not being able to practice medicine the way they were trained as a result of insurance-driven productivity goals. A secondary reason was monetary — primary care physicians are the lowest paid physicians. A nice byproduct of Direct Primary Care practices for the primary care physicians is they can practice medicine the way they were trained and by cutting out the 40% "insurance bureaucracy tax" they are taking home significantly more income.

Imagine if we scaled models such as MedLion's and other DPC pioneers such as Qliance nationally. It would be a boon for primary care providers who want to operate free of insurance, as it validates a model that has proven to yield better health outcomes while lowering costs dramatically. Fortunately, one of the least known elements of the new health law may be the most important. It's the Direct Primary Care provision allowing the separation of insurance from day-to-day healthcare to save 40% off the cost of primary care. See Health Insurance's Bunker Buster for more. Showing the bipartisan support for this element of the health reform, a GOP Representative who fought against reform and is an MD has proposed a bill to utilize the Direct Primary Care model with Medicare recipients. This leads into the next item.

Demand A Standard Wrap-Around Insurance Policy
For Direct Primary Care (DPC) to work best, it is paired with a wrap-around insurance policy to cover non-primary care items. Widespread use of the Direct Primary Care model would give insurance companies something that can allow them to underwrite a wrap-around policy to complement what is being delivered via the Direct Primary Care package. This would accelerate the development of independent Direct Primary Care practices as long as they offered the same baseline services (they are free to add things above that to differentiate their service). National scale is critical, as insurance companies can't underwrite for something that is wildly variant. This gets health insurance back to its strength and what insurance is so good for — rare stuff you hope never happens versus insuring the equivalent of a car tune-up.

In summary, a couple simple steps can save hundreds of billions and save primary care in this country which many view as a dying profession. The only downside to this plan is some healthcare providers are resistant to change, but this is a small price to pay for reviving the economy and putting the country on a path where healthcare costs won't bankrupt the nation.

Read More