How one physician's passion provided increased access and practice profitability.Garrison Bliss, MD, is a man driven by a strong sense of purpose and passion. As a board-certified, Seattle-based physician with 30 years of experience in primary care, he is widely regarded as a pioneer in helping change how quality health care services are provided and financed.
Like most physicians focused on providing excellent medical care, Bliss was increasingly devastated by the fact that he could no longer do the job he enjoyed and was trained to do in a traditional private practice. Reaching boiling point, he decided not to take it anymore and vowed instead to recreate a medical care delivery model that actually worked, and permitted him to stay in medicine without burning out.
His passionate commitment to improving medical care led him to step far out of his comfort zone. He soon found himself compelled to break from the entire economic design that had been so carefully constructed and preserved by law and by large corporate structures. In order to work once again for his patients, he felt obliged to walk away from everything that most doctors consider status quo--an insurance-based medical practice.
This move naturally led to speculation and misunderstanding that his future practice would be focused on taking care of the rich and bypassing the poor.
But Bliss had different ideas.
Pushing the limits
His experiment began with the formation of New Seattle Medical Associates, a membership-based medical practice .
Unlike the newly emerging concierge practices with annual membership fees in the several thousands, New Seattle Medical Associates challenged itself to provide primary care for as little as $65 per patient per month maximum. The practice decided to stop accepting insurance and opt instead for simplicity.
The new "fee-for-care" system freed up resources that had been diverted to billing and following up on unreimbursed claims. It permitted a greater focus on patient care.
Furthering the goal of simplicity, New Seattle Medical Associates offered three levels of charges, depending on age. Whether patients were sick or well, came in daily or once in five years, the monthly fee remained at the same low level. This provided the practice access to a steady cash flow, enabling the owners to cover the fixed costs of the office, pay themselves a salary and be completely available to their patients.
After 10 years of testing this model of primary care, Bliss was ready for his next challenge. He was troubled by the thought that there were only three internists in Seattle enjoying this wonderful way to take care of patients.
In his opinion, "the vast majority of patients and doctors were still stuck in bondage, in an economic system that made it virtually impossible to do a god job, a made it unrewarding thus causing fewer medical students to want to go into primary care and more physicians to leave practice at a relatively young age."
It was time to re-examine the model-to determine how it could be supercharged to provide the same kind of satisfying care for very large groups of people, including the millions of uninsured.
Reassured by the fact that the majority of the uninsured were employed, Bliss felt an urgent need to experiment with providing even more affordable health care, while preserving the joy and reward that would enable a physician like himself to continue practicing in primary fare for many years.
The power and logic of a vision
The vision was simple. In primary care, up to 50 percent of the costs are transaction costs associated with handling health insurance relationships. This necessarily makes primary care needlessly expensive.
Bliss envisioned a system in which insurers continued to protect the insured against catastrophic loss and significant medical-related expense, while primary care, which did not truly belong in the insurance world, would be financed by patients paying a low monthly fee directly to their physician. In exchange, the physician owed the patient good care in a timely fashion.
One of the early roadblocks Bliss encountered was the allegation that a monthly, quarterly or annual "pre-service" fee was a form of insurance. It was necessary to create new legislation in the state of Washington and get it passed through the Legislature in order to make sure that monthly fee medicine was not confused with providing insurance. Once that obstacle was circumvented, Qliance was formed.
The fundamental business principles upon which Qliance is built include:
* Ultra low monthly access fee (the average being $55 a month, the maximum at $74 a month)
* Intensive technology support, including a paperless office, for practice management
* Incorporation of a formulary to dispense generic medications at no price
* Development of low price contracts with laboratory businesses for common lab work
* Access to on-site digital X-ray read remotely by radiologists
* Use of physician extender teams to provide care
A key rationale for the success of such a primary care business model is that almost all of the costs of primary care are fixed. Labor costs, including physician salaries, office space, equipment leases, and insurance premiums constitute the bulk of the monthly budget. The additional variable cost of seeing a patient is minimal.
The business model simply needs to produce sufficient revenues to cover little more than the monthly expenditures. The membership model enables the practice to generate a predictable monthly cash flow once it reaches a certain critical volume of patients.
Freed from the constraints imposed by insurance companies and the practice's need to collect insurance payments, Qliance was at liberty to design and configure the delivery of care anyway it wanted. Group discussions, educational programs, and even classes over the phone, became care delivery options.
By being directly financed by the consumers of the practice's services--the patients themselves--the Qliance business owners are able to assess and then respond directly to the needs of their patients. They are able to engage in very direct conversations with them, and design the systems that are really going to work to provide the care they need.
Bliss earned his stripes. He has been active nationally in the Society for Innovative Medical Practice Design, serving as president and most recently as chairman of the board. In 2006, he was named one of the top 25 entrepreneurs and innovators by the Seattle Business Monthly.
As an entrepreneurial physician, Bliss learned the following from the business school of hard knocks.
1. It is both possible and necessary to step out of one's comfort zone in order to create disruptive change. The magnitude of this move almost universally invites skepticism, and often outright criticism.
2. It is possible to deliver basic, appropriate medical care in a timely manner for a shockingly low monthly fee and still be a profitable practice.
3. In order to meet the needs of patients, it is advisable to get regular feedback from the patients to design a practice that most meets their needs. Bliss interviewed the first 50 people who joined his practice and was delighted to discover that 100 percent were delighted with a care. It has become a business goal to maintain that level of customer satisfaction as the practice grows.
4. For this kind of medical practical practice to be scalable, and implemented in other communities, a sturdy and effective business backend is required.
5. It is vital to be willing to "play in the sandbox" to find solutions to the most pressing needs of the patients and to maintain a viable business model, while keeping a constant and steady eye on the big vision.
Philippa Kennealy, MD, MPH, CPCC, PCC
A certified physician business coach and president of The Entrepreneurial MD.