Reinventing the Patient-Focused Medical Practice

After hearing physicians’ favorable reception of a speech on consumer-driven health care, one health policy expert asked me if physicians really understand how profound the changes would be if consumers were put in the driver’s seat. Do doctors really understand how demanding a consumer-driven market can be? Do they realize that the whole structure of medical practice may have to change to accommodate patient convenience and efficiency? Do they realize how revolutionary the changes might be?

The Society for Innovative Practice Design brings together physicians who understand and accept the challenge of bridging the gap between the theory and the practice of consumer driven medicine. The redesign of medical practice by our member physicians has as its core a clear understanding that the physician works on behalf of the patient, not the managed care plan, the employer or the government providing the insurance coverage. Many innovative practices even create a financial firewall between themselves and third-party payers because they have found the culture of third-party payment a distraction from their primary focus on patients.

The interest of physicians in redesigning medical practice focuses on dealing with opportunities and problems that embrace both patient care and practice economics:

Growing patient demand for prevention-focused primary care services

A need to improve practice efficiency by controlling the expenses of contracting with third-party payers

A need to develop innovative financing arrangements that are patient friendly rather than dictatorial.

The reengineering of practice operations to improve patient service and convenience


Consumer-driven primary care practices take a proactive approach to prevention and integrate it into day-to-day patient care. In the concierge practices developed under one national franchise, the physicians create an annual wellness program for each patient. In virtually all consumer-driven practices, operations are organized to promote physician- patient communications even during routine sick visits, e.g., the typical office visit in such practices lasts 20-30 minutes. The extended time allows the physician to provide the reinforcement that is essential to initiate and maintain major behavioral changes such as weight loss, regular exercise and smoking cessation. The time also permits the patient to communicate with the physician in a relaxed atmosphere so that all questions can be addressed, further reinforcing the feeling of trust that powers the doctor-patient relationship.

By contrast, the current health care system dominated by the narrow concerns of health insurance plans and government finance interprets prevention primarily in terms of procedural medicine. Their prevention activities consist almost entirely of readily documentable process measures such as age-appropriate screening tests. While physicians in consumer-driven practices recognize the importance of these tests, they also understand their limitations: They may fail to address the lifestyle issues that are so critical to prevention. Increasingly, patients have the expectation that physicians will not only treat illness but will provide guidance in improving the quality of their lives.

Practice Efficiency

On average, medical practices have doubled the number of non-clinical employees since 1982 and, in constant dollars per physician, have seen practice costs double. The increase in administrative costs is primarily due to the increased cost of billing and collecting from both private and public sector health plans. The war of attrition over payment has caused both physicians and insurers to expend enormous sums in computerized billing and payment (or nonpayment) systems designed to protect their interests. Failure of the health plans to fulfill their payment responsibilities has become legendary and resulted in legal settlements in the hundreds of million of dollars coupled with promises of future reforms.

Minimizing or even eliminating relationships with third-party payers positions physicians to deal much more directly and flexibly with patients. Physicians no longer have to set their fees at a level high enough to protect them from charging less than a payer’s contractual fees. And physicians have more flexibility in charging those patients who are employed but uninsured or those patients who pay at the time of service with cash or through a Medical Savings Account (MSA) arrangement.

Moreover, reduction or elimination of managed care contracts relieves physicians from the burden of constant bickering with a rigid third party and being forced to be the “bad cop” in the insurer’s quest to stand firm on spending. Physicians should never be in the position of representing the interests of both their patients and the payors simultaneously.

In this new arrangement, the sole responsibilities of physicians are to provide excellent patient care at a price acceptable to patients. For the first time in almost 50 years, the patient can become the decisive player, dealing directly with the physician, the employer and the insurer – holding all parties to more rigorous, consumer friendly standards. The patient will increasingly be spending his own money, even if that money was contributed initially to a Medical Savings Account (MSA) by his employer or by a government program. The patient will be judging the quality of care and “reasonableness” of physician charges and insurance reimbursement. This will be a cultural sea change for both physicians and insurers. It may also require patients to adjust to their new powers and responsibilities.

Innovative Payment Arrangements

While the society is wary of the pervasive controls that insurers have tried to impose on patients and physicians, we recognize that third-party payment is essential to funding care for people with serious illnesses requiring expensive services whose cost exceeds what patients can reasonably fund , either out-of-pocket or via MSA. The problem has become all the more urgent as the ranks of the uninsured have grown. The Kaiser Family Foundation’s 2005 survey of employer-provided health insurance found that the percentage of small firms (3-199 employees) offering health benefits has declined from 68 percent in 2000 to 59 percent in 2005. These findings are of particular concern because in the American economy, small businesses are the largest source of job creation.

At the moment, the most attractive options appear to be individually owned policies that, within the limit of the law, leave the decision making in the hands of individual patients and avoid the intrusive micromanagement that characterizes today’s managed care plans. In particular, plans that combine tax-privileged MSAs with high deductible health insurance policies are a particularly appealing option.

The traditional health insurance carriers are anxious to integrate MSA/high deductible products into their usual way of doing business. For example, they commonly require that MSA funds be used only for services allowed by the patient’s underlying policy instead of for the full list of services allowed under the law. For patients and physicians anxious to see major simplification of health insurance, such limitations seem nothing more than an excuse to allow these carriers to draw on MSAs as another source of support for the industry’s “medical necessity” bureaucracy.

Nonetheless, there are also many new entrants in the MSA/high deductible arena, and our hope is that they will impose a strong marketplace discipline on the less economical participants.

Reengineering of Practices

Finally, in a very practical way, physicians have been looking very closely at the operation of their practices and have been making changes to meet the stated needs of patients:

The doctor always runs late.Reduce the number of patients in the practice so that that visits are longer and the caseload is more manageable.

If a physician is tied up by an emergency, call the patients who have not yet arrived and reschedule them.
It’s difficult or impossible to reach the doctor after hours.Patients are given the physician’s cell phone number or access to an answering service that actually works, with a serious commitment to return the call within minutes, not hours or days. Patients are cared for on the day they become ill, so physicians on call are not overwhelmed with emergencies on nights and weekends.
The doctor is always in a hurry.Extend the length of office visits to allow time for the patient and physician to talk and deal with long-term health goals as well as immediate problems.
The doctor is always overbooked.Create a schedule with planned space for emergencies, so that already scheduled patients aren’t forced to wait while the acutely ill are assisted. Physicians do not take on more patients than they can actually care for.

Physicians in these practices are acutely aware that their patients are paying their own money with the expectation of better care and service. Mediocre care is unlikely to be tolerated.


The Society for Innovative Medical Practice Design offers a pragmatic forum in which physicians can find hands-on assistance in refocusing their practice once again on patient needs. It is our mission to establish a patient-physician marketplace where exceptional care and service will be provided at prices affordable to the vast majority of Americans. This will also have the effect eventually of lowering the market price of care to all, including those in poverty and the uninsured. It will do so while reversing the current double digit inflationary trends in health insurance and public health care financing.

Rodgers, James F., “Consumer-Driven Health Care is a Message of Hope,” in Herzlinger, Regina E., editor, Consumer-Driven Health Care: Implications for Providers, Payers and Policymakers, Jossey Bass, San Francisco, 2004, pp. 696-8

See the Kaiser Family Foundation website:

Leave a comment

Your email address will not be published. Required fields are marked *