The purveyors of on-site primary care clinics at private corporations are on the march, believing that they have developed a disruptive business model.
There can be little debate that the current business model for the delivery of health care in America is busted. The hyper-inflation — 8-10% increases year after year for four decades — is proof enough. The chaos on the economic side of medicine screams out for innovative business models. I didn’t say innovative government models, which usually make matters worse.
While the wonks have their underwear tied in knots over the complexity of ObamaCare, QuadMed and ModernMed, both with Wisconsin roots, are spreading across the nation with their alternative solution to big system delivery. Their models are elegantly simple, market-based, and they are growing very rapidly.
QuadMed, which now runs 11 clinics with 250 doctors, has been bidding on huge new hunks of business at companies like Safeway, Stihl and MicroSoft. They have a hard time keeping up with the demand.
Time for Joel Quadracci, CEO, to take his subsidiary public? Don’t think he hasn’t thought about it. Can I get some IPO stock, Joel?
Quad has a compelling story. Its proactive approach to intimate primary care, to chronic disease management, to keeping people out of hospitals has proven over two decades to reduce costs by 20-30%.
That’s a big number, enough to have attracted customers like Briggs&Stratton, MillerCoors, Northwestern Mutual Life and Kohler.
ModernMed provides concierge primary care to medium-sized companies, a niche below where QuadMed operates. It supplies part-time doctors to companies not large enough to afford fulltime clinics. In the last six months, the young company has grown from 17 to 28 doctors at employer sites around the country. Serigraph was its corporate beta site two years ago. Three other companies in our county are following suit.
As the awareness of the effectiveness of on-site primary care grows in the corporate world, they and their growing list of corporate customers are “flipping the current access model right on its head,” in the words of Dr. Jamie Doucette, founder of ModernMed.
Irony of ironies: ObamaCare was all about access, yet the real reform of access is happening in the private sector, far from Washington D.C.
Doucette contends that onsite clinics and primary care teams can deliver medicine the right way, the old-fashioned way (30-minutes or more for holistic office visits vs. less than 10 for the big systems) for 99% of the population who account for two-thirds of the health care spend in the country.
The other 1% with acute needs account for the other one-third of the spend, and they are the sweet spot in business for the big, intensive care systems and for insurance. Remember, insurance was invented for catastrophes, not for day-to-day expenses.
In effect, employers are taking back the front end of the supply chain for medical care. Dr. Raymond Zastrow of QuadMed says the new model is “a shift from break-fix systems to prevention.”
After deciding to contract with QuadMed in 2001, John Sheily, former CEO of Briggs&Stratton, said, “There’s only one way to avoid paying more for the health care system, and that’s corporations getting back into the health care business.”
The theorists in health care have been talking about “medical homes for individuals and their families for more than a decade. QuadMed and ModernMed are doing it. They use electronic medical records to continuously deal with health matters, annual health risk assessments, incentives and disincentives for wellness and convenient, high-touch service to produce better health and huge savings.
It is the integrated care that the big, vertically integrated systems promote but struggle to deliver.
When secondary or tertiary is called for, ModernMed refers to the big systems based on quality of care and price, namely value. QuadMed uses a wrap-around network.
My prediction: QuadMed and ModernMed and their growing number of competitors in the primary care segment will grow to become big, national companies and they will shake up an industry that badly needs shaking. They will have a bigger impact on health care in America than the new national law dealing with insurance reform.
On-site primary care companies go national
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