Wednesday, August 26, 2009

Markets In Everything: Kaiser Microclinics At 50% of the Cost of a Full-Service Hospital

WIRED.COM -- Kaiser Permanente has long relied on a simple strategy of building complete, self-sustaining hospitals—employing 50 doctors or more—in each region it serves. "It's an efficient model," says Michele Flanagin, Kaiser's vice president of delivery systems strategy. "It offers one-stop shopping: pharmacy and radiology and everything you want from health care in one building." But that approach forces patients who don't live near a hospital to drive a long way for even the most routine doctor's appointment.

In 2007, Flanagin and her colleagues wondered what would happen if, instead of building a hospital in a new area, Kaiser just leased space in a strip mall, set up a high tech office, and hired two doctors to staff it. Thanks to the digitization of records, patients could go to this "microclinic" for most of their needs and seamlessly transition to a hospital farther away when necessary. So Flanagin and her team began a series of trials to see what such an office could do. They cut everything they could out of the clinics: no pharmacy, no radiology. They even explored cutting the receptionist in favor of an ATM-like kiosk where patients would check in with their Kaiser card.

What they found is that the system performed very well. Two doctors working out of a microclinic could meet 80% of a typical patient's needs. With a hi-def video conferencing add-on, members could even link to a nearby hospital for a quick consult with a specialist. Patients would still need to travel to a full-size facility for major trauma, surgery, or access to expensive diagnostic equipment, but those are situations that arise infrequently.

Flanagin believes these clinics will enable Kaiser to add thousands of new members. And they'll do it for less. The per-member cost at a microclinic is roughly half that of a full Kaiser hospital. The first microclinic is set to open in Hawaii early next year.

MP: Would we get this type of cost-saving innovation under government-run health care?

Originally posted at Carpe Diem.


At 8/26/2009 5:04 PM, Blogger Unknown said...

MP asks: "Would we get this type of cost-saving innovation under government-run health care?"

We're getting that cost-saving innovation out of a non-profit, so why would the availability of a 'public-option' plan necessarily make such innovation impossible?

And the Democrats' plan wouldn't make such innovation by private insurers illegal. What's your point again?

At 8/26/2009 8:11 PM, Blogger Unknown said...

The key word(s) here are "non-profit" which is not a familiar phrase to the many "Health Care" (?) organizations that rent or buy Congressman.

Medicine, economics, the weather and many other things cannot be simply explained by a few charts or graphs.

Unfortunately, the general public has the attention span of an ADHD ( ) child.
If a politician says "Do you really believe the American public is that stupid?", then you better believe he (she) knows for a fact most people are "sheeples"

This is why "sound bites" and "headlines" take hold. But as Paul Harvey said " and now the rest of the story" may add a few facts that add context and clarity. Facts are dangerous in the "FACT FREE" or "REDUCED FACT" zone.

I read a comment today on Mish's blog where the blogger admitted he was of average intelligence but recanted that admission when he considered the number of stupid people he has come across. Kind of like grading on a curve when a C becomes an B or an A.

At 8/26/2009 11:12 PM, Blogger KO said...

I had Kaiser Permanente (California) before and people either love it or hate it. If you want prompt service you go to the walk-in urgent care. If you want to see the same doctor you've seen before or for non-urgent situations, you face long wait times.

For a non-urgent exam I called around to several locations before I found one that had the shortest wait for an appointment. It was 4 weeks later. I showed up that day, checked in, got the exam, and only when I was ready to leave did I see another patient there. None were in the waiting room with me and there could only have been one other in the exam area. The staff outnumbered the patients the entire time. After that it was clear why the wait was 4 weeks.

For urgent care they were great. Took a friend with a split knee in and he was taken into the back for treatment without missing a stride from the door. They just saw the knee and waved him back.

Even though the premiums were about 15% lower than other plans my employer offered, I switched.

At 8/27/2009 2:39 AM, Blogger juandos said...

"We're getting that cost-saving innovation out of a non-profit, so why would the availability of a 'public-option' plan necessarily make such innovation impossible?"...

Hmmm, I think someone might want to reread HR 3200 or read the Cliff Notes version...

At 8/27/2009 12:23 PM, Anonymous Anonymous said...

Steve, show me some government agencies with low cost or cost saving innovations.

What makes these savings impossible is POLITICS. Whenever government is involved in the private sector, it pursues political, not economic objectives. E.g. Low price of postage stamps and public buses, overemployment in government agencies (budget maximizers, not profit maximizers), unsustainable wages and benefits for public sector union employees.

You're confused between the governments ability to control prices and dictate terms - a classical ignorange of the difference between price and cost. Government can be efficient, but it will choose not to be. If it charges 'affordable' prices, it will have excess demand and either must ration or run deficits.

But private companies will lose customers if they ration, lose customers with high prices, and lose money with deficits. So a public option WILL drive out private insurance for all but the wealthiest Americans.

Ted Kennedy will still get his brain transplant. You and I will be waiting in a doctor's office next to a filthy, disgusting, unhealthy, repulsive stinking bum for four hours. You and I will wait MONTHS for appointments to see specialists. Their will be a two-tiered insurance system and you and I will be dragged down to the low tier by the subhuman cannabalistic underground dwellers who do no work and do not earn the money to pay for the health care resources they will use.

When I'm sick, I hesitate to leave work because I want to save sick leave for serious illness or injury. I ration my own sick days. The filthy uninsured masses who weigh 400 pounds, churn out puppies and kittens, smoke snipes at bus stops, and drown themselves in MD 20/20 have nothing better to do than go to the doctor or hospital.

At 8/27/2009 1:10 PM, Anonymous Anonymous said...

We're getting that cost-saving innovation out of a non-profit, so why would the availability of a 'public-option' plan necessarily make such innovation impossible?

If we have non-profits providing cost-saving, innovative care, why do we need a "public-option"? What's your point again?

Keep your greedy little power seeking hands out of my pocket, Steve.


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