Planning the Patient-Centered Health Plan for America

by admin on 06/20/2011 1:15 AM

Level B: Emergency Rooms, Urgent Care and Surgi-centers

(Continued from April 2011 section 9)

A graded co-payment for every level of service

See April Issue for Level A—Hospitals

Level B: Hospital Emergency Rooms, Urgent Care Centers, and Surgi-centers.

The research from HPUSA has elucidated some important clinical statistics to control health care costs. This data is hard to obtain and cannot be automated. It is labor intensive. At this point it is clinical: one on one. When we see large expenditures in health care, we try to determine if the patient is a candidate to be included in our series. We then indulge in a frank discussion of his or her responses to the questions concerning percentage co-payment and its effect on the patient’s utilization of health care benefits.

Health care can be stratified into a number of logical tiers. The most expensive and highly sophisticated care is in the traditional acute care hospital. We came up with a 10 percent co-payment of the hospital costs as being the best number that did not preclude needed care and was able to allow for needed hospital care. With a 10 percent co-payment, the patient policed his hospital cost better than any oversight institution saving up to 40 percent of usual costs.

The traditional hospital is like the mainframe computer industry of the third quarter of the twentieth century. It became a costly and unmanageable structure. It was salvaged by the competition of the PC industry which made the mainframe industry adapt before essentially all but IBM succumbed. Similarly, the hospital has become the vertical structure for much of health care. However, its costs are not sustainable. Just as most of the mainframe companies didn’t adapt and are no longer in existence, so the vertical integrated hospital will face similar challenges.

The free standing urgent care centers and the surgi-centers are similar to the PC industry causing a restructuring of health care. For purposes of making health care affordable, which in turn will make health insurance affordable, out research indicates that a 20 percent co-payment for these centers was the best number that did not preclude needed care and was not too large so as to prevent needed care.

Hospitals reacted immediately and forcefully by purchasing these centers or building competing surge-centers. In fact the surgeons that owned a surgi-center near our office were told by the hospital that they would like to purchase their surgi-center or they would build a competing surgi-center across the street from them. The surgeons obviously cashed in their investment and re-established a new surgi-center not nearby any hospitals and are operating successfully.

This continues the migration from the vertically integrated healthcare structure to the horizontal competitive healthcare structure. This will occur over time and there is nothing that hospitals can do to stop this restructuring.
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