Family medicine's revival: Managing escalating costs and reinventing primary care delivery
Primary care is perfectly positioned to bend the cost curve. And that’s precisely what is driving consistent 45% growth of Fort Collins, Colorado-based Miramont Family Medicine, says CEO John L. Bender, MD, FAAFP. The multi-specialty group, with a heavy focus on family medicine, has an entirely different notion.
They want to keep as much of the delivery of healthcare within its seven facilities to improve it and manage escalating costs.
And the practice has built a model to do just that with advanced technology and medical equipment, contracts with visiting specialists, a practice design built around saving steps for nurses and medical assistants, and a patient base that has swelled to 35,000 and growing.
While Miramont has been consistently expanding, independent family medicine practices in the area have been contracting. Nearly 30 primary care practices in this locale have either sold to the area’s hospitals or, in eight cases, gone bankrupt.
While financial implosion is a grim reality on the eve of the full-scale implementation of Obamacare, according to Bender, it signals the need for great disruption in the way primary care delivers services to patients and how it is paid.
Most primary care practices struggle with cash-flow problems, Bender explains, and to improve it, practices have to become far more efficient and predictable in delivery and revenue collection.
“Practices that fail often are the one’s that have not effectively managed labor costs,” Bender says. “I cannot simply pay my staff less. If anything, I have to pay them more because we are in such a high-density of services and digitalization. What Miramont does differently is through Lean principles and leveraging information technology,” he says. “We allow our staff to do things in 10 minutes what used to take 20, and that is the secret.”
Lean principles, adopted and successfully used in manufacturing by Toyota, are a management tool to help identify value and eliminate waste in a process.
“We recognized that we could treat cases for $300, when the emergency room was charging $3,000. We have a better product than the emergency department for about 90% of what it is seeing.”
And if you ask Bender, that is exactly why independent practices in family medicine and internal medicine are so vitally important and poised to succeed.
Hospital systems are embroiled in a kind of medical arms race that is not sustainable, Bender says. Neither is the buying spree of independent primary care and other specialist practices.
For example, the Fort Collins area has seen large-scale growth in emergency department (ED) utilization by almost 50%, according to latest estimates, he says.
“What this suggests to me is that if people don’t have a family physician or a Patient-Centered Medical Home, they are going to the [ED] at a later stage at a higher cost,” Bender says.
The EDs have been such a driver to hospital traffic that one of the area hospital’s built a freestanding ED, the competing hospital responded with a freestanding emergency facility and the purchase of the county’s emergency medical service. The other hospital escalated the race by buying a second air ambulance to service an area of fewer than 500,000 residents.
“Who is paying for this? We all are. It’s raising everyone’s premiums and moving at an amazing rate,” Bender says. In the past 2 years, 250 physicians in this area have become hospital employees.
“Having said that, the hospital medical group in 2010 lost $7 million,” he adds. “In 2011, they lost $20 million. Last year, I don’t know how much they lost, but they relieved their chief executive officer, chairman of the board and other executive leaders. It’s not working for them. Hospitals cannot just buy up ambulatory practices that are failing and run them like hospitals. This truly is making our healthcare situation worse.”