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Primary care is a pretty low overall component of healthcare spend, but a direct primary care model could have an indirect effect that is much more substantial
by aaavl2821 8y ago
Primary care is a pretty low overall component of healthcare spend, but a direct primary care model could have an indirect effect that is much more substantial -- reducing hospital costs
Hospital care is the biggest component of US healthcare spend at 30% and costs per hospital bed are dramatically higher in the US than other OECD countries
Much of this is due to local hospital monopolies, which are extending to include primary care. When a big hospital buys a primary care clinic the cost of care at the primary care clinic immediately increases, sometimes dramatically, bc the primary care clinic now bills using the hospital systems insurance contracts. Huge hospital systems can basically dictate price to payers in many geographies. These payers then squeeze independent docs even harder to try and make up for getting pushed around by large hospitals. Hospital employment of primary care docs is at an all time high, despite many physicians (even hospital employed ones) thinking that this trend hurts patients and costs more
Plus, the primary care clinics now direct all patients to the big expensive hospitals, and the hospitals can even dictate patient flow within the system ("steerage") beyond just passively capturing the primary care practices patient volume
- ShorsHammer 8y ago> costs per hospital bed are dramatically higher in the US than other OECD countries Both US government and private health costs are well out of line with the rest of the world. Certainly not getting value for money. https://data.oecd.org/healthres/health-spending.htm https://data.oecd.org/healthres/health-spending.htm
- coredog64 8y agoWhat’s your take on the increased cost component due to US hospitals mostly having private rooms? If the US were to build all new hospitals with multi patient rooms, how long before the cost curve bends down to rest-of-OECD levels?
- matthewmacleod 8y agoWhile they no doubt increase direct construction costs, my understanding is that planning for hospitals in the UK is leaning towards private rooms because they have a bunch of not-immediately-obvious benefits that can reduce cost in the long term – better infection control, less bed-blocking, improved recuperation times, things like that. This information is third-hand though, and I don't have enough knowledge to say for sure. But it certainly doesn't seem unreasonable that this could be the case!
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- aaavl2821 8y agoI'm not sure about the cost impact of that, but I think pricing in the US is more based on what hospitals can get away with in negotiations with insurers, and less based on cost. So if hospitals decreased their operating costs, but they were still able to negotiate high prices with payers because they have market power, then that would just result in higher hospital profits. Just speculating though