Healthcare in the United States in 2015 feels too often like a factory, with both patients and providers feeling like they are widgets going along an assembly line. One of the core drivers of this is the current fee-for-service (FFS) reimbursement system. As Bob Berenson succinctly put it in the context of primary care (but it applies more generally) “Fee-for-service, the predominant physician payment scheme, has contributed to both the continuing decline in the primary care workforce and the capability to serve patients well.”[i] If we want to transform healthcare and restore humanity, we need to start by changing the payment model.

Fee-for-service for primary care basically pays a doctor only for a certain set of discrete activities - largely confined to doctor sick visits - which are tiered by means of an arcane coding system counting very discrete micro tasks, like how many organ systems you examine, or with questions you ask a patient about the quality of their symptoms. This encourages everything to turn into a visit (because that is paid for), and for the doctor to do most things instead of others on the team (because that is what is paid for). It leads to reactive care (since thinking of a patient not in front of you isn’t paid for), and leads to framing the job as taking care of one patient at a time - like a never-ending series of widgets on an assembly line. The electronic health records primary care doctors use, not surprisingly, are then built to optimize this fee for service payment - particularly the coding level of each visit, and leads to lots of often useless points and clicks and incredibly long notes that are extremely hard in retrospect to figure out what really went on. And practices spend huge percentage of their time and overhead dealing with all this, which is really just a game, and does not lead to one iota of better patient care.

Fee-for-service is simply the wrong model to pay for primary care. It has turned healthcare into a series of transactions. It is toxic to good care and to physician and team culture, so we should simply stop using it. Primary care should be about continuous healing relationships, and discretely paying for services is antithetical to this.

For the past four years we at Iora Health have been building and operating over a dozen primary care practices across the United States that are purely based on a wholly different and simple comprehensive payment model. We start with a risk adjusted fixed fee per patient for all our services, and in some cases add additional payment for meeting experience, quality or utilization targets, and/or some sort of shared savings off expected total healthcare costs. What we do not do is take any sort of fee for service payment. Our billing is often a one line email once a month with three numbers: the number of patients we are caring for times the rate we should be paid, equals the size of the check to send us. No codes, EOBs, or appeals. Instead of worrying about widgets off a line, our teams can now perceive that we have a population of people who are our responsibility, and our job is to serve them, improve their health and keep them out of trouble (e.g. the hospital, ER, and unnecessary procedures).

We now can completely change the delivery model. We build a very robust team, with 4 health coaches per doctor drawn from the community to help patients understand and manage their health, integrated mental health, daily huddles to discuss patients who need our help, extensive non visit based care, home and hospital visits, and lots of groups to help patients learn from us and each other about their conditions. We have also developed our own IT platform as we realized current Electronic Health Records are not built for this very different care model.[ii]

We have shown dramatic improvements in outcomes and drops in total healthcare costs in practices serving populations as diverse as Boeing employees in Seattle WA[iii], Casino workers in Atlantic City NJ[iv] and Las Vegas NV, and Faculty and Staff of Dartmouth College in Hanover NH. One of the most common questions we get asked is of all the many things we do differently than typical practices, what is the most important in achieving these results? The answer I think is actually quite simple and yet profound, and is best illustrated by a patient I still remember from our Atlantic City practice.

Her name was Joyce, and I had the pleasure of meeting her when she first came to the practice many years ago. Her hair was disheveled, she arrived late, and her health was a mess - her diabetes and hypertension were way out of control, she was only intermittently taking her medications, her diet was awful, she was in and out of the ER, and hadn’t been able to keep down a job. We introduced her to a health coach, cleaned up her medication regimen, and got her started in our program. Six months later I came back to visit the practice, and one of the docs called me over and said “remember Joyce who you met on her first day here - she is back and I want you to see her.”

I walked into the room, and she looked like a new person. Hair was combed, clothes were well put together. Her A1c and blood pressure were in control, she was eating better, taking her medications, was back to work, had not gone to the ER in 4 months, and in general had a much more confident look about her. I looked her in the eye and asked “Joyce, congratulations - you look great. Can you tell me what we’ve done to help you?”

She thought about it for a moment and replied, “Actually doc it’s quite simple. My health coach and the entire team cared about me, you taught me to care about myself, and I didn’t want to let any of us down.”

This sort of relationship is what heals people, not transactions. For millennia patients have been coming to healers to help them, and our only tool was our humanity. Indeed humanity is what drove many of us to go into the healthcare in the first place.

The Fee-for-service billing system squeezes out these relationships and replaces them with transactions. If we truly want to restore humanity to healthcare, for the sake of both patients and providers, we need to have the courage to make big changes in the payment system to then allow system redesign.