Sunday, March 29, 2009

Nationalize Health Care? Nope. Localize It and Save.

Torinus makes a very good case for 'localizing' health care.

Zastrow heads QuadMed, a subsidiary of Quad/Graphics Inc., a global printer of magazines. Harry Quadracci, its founder, and Len Quadracci, his brother, concluded 20 years ago that they needed to take control of the front end of the medical delivery system. With 6,000 employees in the Milwaukee area, they had the critical mass to set up their own primary care clinic.

QuadMed now operates eight clinics, five for its employees, two for Briggs & Stratton Corp. and one for MillerCoors LLC.

(At one time, Briggs had its own corporate MD.)

Talk about cost advantage!

On an adjusted basis for demographics and plan design, the consulting firm Mercer put Quad at 18% below its Midwestern peers in 1998. By 2006, Quad's costs were a cumulative 32% below peers.

Serigraph's per life cost in 2008 was $3,640, achieved with aggressive management and a consumer-driven plan. For the same year, Quad, without the benefit of a consumer-driven plan, did better at $3,135 per life.

Compare that with $6,000 per life in the lowest cost plan for state employees. The state's BadgerCare Plus program comes in at $1,957 per recipient, but would be about $6,000 if price controls weren't used to shift costs to the private sector. It uses Medicaid price controls to pay hospitals about 25% of charges, compared with 73% by privately insured plans.

This is the medical version of the Law of Subsidiarity, which suggests that the best solutions are those which are 'closest to the ground.' While it's typically used as a governance model (except by the Democrats), it clearly works in other venues.

The Quad model isn't just about convenient, primary care. It is about what works. Here are some of its important building blocks:

• Quad doctors are paid mostly by base salary, with some small incentives for quality and productivity. That stands in stark contrast to most systems that pay doctors by procedures.

• Each patient/employee using QuadMed has an electronic medical record, but it isn't just about going paperless. The electronic system helps Quad doctors deliver better care and manage chronic diseases such as diabetes.

• Education and incentives to stay out of hospitals figure prominently in the Quad approach. Diabetics, for instance, receive free supplies and medicines to help them stay in control of their blood chemistries.

• Quad employees pay only $6 for an office visit. Catching conditions early and heading them off is a key piece of strategy.

• At the heart of the Quad delivery model is integrated care. Its personnel and systems create what has become known as a medical home, where all records on an employee are kept in a confidential electronic file and where doctors and nurses coordinate tests, imaging, regimens and treatments

This sort of plan, with a little imagination, could be used by any number of larger Government entities--the City of Milwaukee comes to mind--or for that matter, by a County in cooperation with its subsidiary cities.

And with a little more imagination, it could work as a model for co-op plans between a number of small businesses

MMAC, are you listening?


Beer, Bicycles and the VRWC said...

Sounds like a good plan that works in practice.

There is NO upside to socialized healthcare. They can call it what they want, but once the government has it's hands in, the cost inevitably increases. Allowing plans like Quad's seems a much better solution.

And I don't often agree with Torinus.

Billiam said...

Dad, without fundamental change in the way government, as well as eployee unions are run, I doubt this model would work. Afterall, government has shown time and time again, that if it works in the private sector, they can screw it up beyond recognition. They can't leave anything alone, thus, they'd bastardize it.

Dad29 said...

Funny that you brought up unions.

QuadGraphics is NOT a union shop, meaning that they were not married to Blue Cross/Blue Shield, as were most Union shops in Milwaukee.

By the way, whatever happened to the old Teamsters' Health operations down here?

Billiam said...

Interesting question. If I can get in touch with a guy I know who is a teamster, I'll ask.

capper said...

Oh,ya. HMO's are everyone's fave. Just look at how successful Family Death Plan was. Let's go with the cheapest available and if you get sick and die, more money for the company!

Dad29 said...

So Capper, are you telling us that QuadGraphics is killing off its employees?

Got some documentation on that?

You know that HMO's were invented by Teddy Kennedy, right, Cap.

You know, the Teddy Kennedy who is the idol of all left-o-wackies...yah, THAT one.

Beer, Bicycles and the VRWC said...

Good to see capper has come by for some comic relief. a better idea? I'd really rather have "evil corporate America" make decisions than the government. At least with "evil corporate America", I can take my business elsewhere.

Capper, you are laughably sad.

Amy said...

Let's go with the cheapest available and if you get sick and die, more money for the company!

Substitute "government" for "company" and you've also summed up universal healthcare.

THE GOVERNMENT DOESN'T CARE if you live or die - just how much it costs and whether or not you're "worth" it...