5. True Cost Transparency — Straight Percentage Copay

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  Author’s notes

  1. Payment reform can align all parties toward solving complex-patient suffering and cost. Clinicians and patients can then do the actual heavy lifting.
  2. Payment—effective demand—is what drives the kind of services delivered. Everywhere else in the economy, payment is linked to utility, that is, outcome, but not in health care. Time for reform.
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Contrary to nihilistic beliefs, complex patient costs can be improved without denial or rationing of care—along with outcomes. How?

In a study of complex patients with multiple chronic conditions from my own practice (average RAF 3.528 HCC 2014 v12), in years with no severe decompensation—acute HCC events, the total cost of care remained unremarkable, but in years when severe decompensation pile on top of chronic complexity, costs jump 4.4x.

The answer leaps out: keep decompensations from becoming severe.

Such complex care needs to be delivered at level of the first line generalist—the PCP. And patients need to be motivated to seek such care.

And it is payment model reform that will change both clinician and patient behavior.

So far I have posted about three such payment model reforms:

  • Outcome-linked bonuses ↗
  • Complex patient retainer fees ↗
  • Straight Percentage Copay Model ↗

It is time to end the irrational payment models that place the greatest complex patient financial barrier at the clinician’s doorstep with deductibles and copays but little for the vastly greater downstream costs, and that, because of lack of linkage to utility for cognitive work payments, write threatening letters to clinicians who charge for higher complexity visits more often than a certain average.

It is possible to alleviate both the suffering and cost that complex patients represent.

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