68COVER bTORYDecember15, 2006IMedicalEconomics!wwiv.memag.comCrisis in healthcareDoes Vic Woodhave the answer?His bargain-basementversion ofconciergemedicinehas stirred upinterestandopposition.By RobertLowesSENIOREDITORVic Woodof Wheelitig, WV,is onetough hombre.As a footballplayer at West Liberty StateCollege,Woodtookhislicksreturtiingpuntsatid kickoffs,anddishedthemout asa defensiveback.Asaformerstatetrooper,hewrestledmoredrunksintohissquadcarthanhecares to remember.Thesedays,thesoft-spoken,butformi-dablefamilyphysicianismixingicupintherole of healthcarereformer.Three yearsago. Woodbeganadvertisingthathis clinicwouldprovideunlimitedprimaryandurgentcare fora monthlyfeeof $83 foranindividual,$125 fora family.Woodimme-diately ran afoul of the state insuratice com-missioner,whowarnedhimthathewasoperating as an illegalinsurer, a felotiypun-ishable by up to five years in prison. For thenextthreeyears. Woodpushedforlegisla-tionandgotpushedbackbytheinsur-ance-industrylobbythatwouldlegalizehis experiment.Now insteadof prosecutingWood,West Virginiais replicatinghisbar-gain-basementversionofconciergemedi-cine in a pilot program. The goalto makehealthcaremoreaffordableinoneofthepoorest states in the nation.ToWood,it'sallaboutremovingthefinancialmiddlemenbetweendoctorandpatient,atleastwhenitcomestoprimarycare."Thereareanswerstothehealthcarecrisisthatdotuinvolveinsurancecompa-nies," he says.Prepaidprimarycareisbynomeansacompleteanswer,sinceitleavesouthospi-tali7.atioti,medications,andspecialistcare.Butcombineitwithahealthsavingsaccountandahigh-deductibleinsurancepolicy,asWoodsuggests,andhiscapita-tion-likeproposallooks alitdemoreinter-esting.Notsurprisingly,doctorsinotherstatesarethinkingthesamewayandatleastonehasencounteredthesamesortofoppositionfromthe insuranceindustry.The uninsured havefearin theireyesAclassicRustBeltstate.WestVirginianeedsahealthcaresystemfixmorethanmost.Nearly18percentofitscitizenshadnohealthinsurancein2005,ninthfromthe bottomamotig the 30 states. They don't|havemuchmoneyforout-of-pocketpay- Inientstoadoctor,either.In2004,WestJVirginiarankeddeadlastinhousehold|medianincomeat$31,504.Yetitsunem-1powerpoints:West Virginiahasthelowestmedianhouseholdincomeinthenation.Aminorityofconciergepracticesdon'tbillhealthplans.Prepaidprimarycare competeswithlimited-benefithealthpolicies.Insurers wantstates toregulateretainer fees.70Cover Story December15, 2006 Medical Economicswww. memag. comploymentratethatyearwasbelowthenationalaverage,indicativeofa state flushwiththe working poor.WestVirginiansenjoyedhettertimeswhenitscoalminingandsteelindustriesoperatedatfullthtottle,providingunionWheeling, WV, VicWood'shometurf,epitomizesthestate'seconomicdepressionwithitsmanyboarded-upstores. In yearspast, thearea enjoyedbettertimeswhenits coalminingandsteelindustriesprovidedunion jobs withbenefits.jobswithbenefits,accordingtostateSen. Jeff Kessler, a leg-islativeallyofWood.Nowthesteelmillsareeitherclosedoroperatingatreducedcapacity,whilemech-anizationandhardtimeshavedrasticallyshrunktheranksofcoal miners.HuggingtheOhioRiverinthestate'snorthernpanhandle,Wheelingepitomizesthestate'seconomicdepression,evidencedby itstnanyboarded-upstoresandvacantlotswherebuildingsweremzed. Thecity'spopulationdwindledfromalmost60,000in1950to30,000in2005,inspiringablack-humorbumpersticker:"Willthelastoneoutofthevalleyplease turn off the lights?"It'sherethatWood,associateFPDougMidcap,twophysicianassistants,andanurse practitionerlog 20,000patient visits ayear. Wood'sclinic,calledDoctorsUrgentCare,takespatientsstrictlyonawalk-inbasis six days a week, and up to 7 p.m. Mon-daythroughFriday.Besidesprovidingthepreventiveandchronic-diseasecareatthecore offamily practice, Woodtreats patientswhose cuts,brokenbones,andfeversmightotherwisesendthemtotheemergencydepartment."We generate92 percentof theCPTcodes you fmdin anED," says Wood.Abroadarrayofancillaryservicessuchas X-rays,labwork,cryothera-py,andECGsequipsWoodforurgent and primary care alike.Atthemoment,Wood'sretainerplan accounts for only a small portionofpracticerevenue.Mostpatientshavetraditionalinsurance,whileanestimated30percentpayoutofpocket, either because they lack insur-iince or have a high-dedtictible policy.Self-pay, Woodnotes, is a problemat-ic waytogo."If you've everlookedintotheeyesofsomeonewithoutinsurance,youseeuncertainty,"hesays."Let'ssayhe's justbeendiag-nosedwithdiabetes.He'sscaredbecausehe doesn'tknowhowmuchit'sgoingtocosttotreathis disease.So he delays, delays, delays getting the care heneeds,andthenthediseaseprocessisfullblown and he lands in the hospital."Prepaidprimary caremeans predictablecostsWoodisn'tthefirstinWestVirginiatochargearetainerformedicalcare.Coalminingcompaniesusedtodeductafewdollars each monthfroma miner's wages topay the company doctor. Andtwofederallyqualifiedhealthcentersoffersimilarpro-grams. Onecalled Valley Health,forexam-ple,guaranteesuptoS3,000worthofcareeverythingfromofficevisitstomed-icationstouninsuredworkingpeopleinCabeliCounty,WV,forS72amonth,anamountusually split betweenemployer andemployee.WithaveragemonthlyexpensesperenroUeeat$80,theprogramnearlypaysforitself,sayshealthcenteradminis-tratorLanieMasilamani.Surprisingly,onlyabout 80 people are participating."Wehavenoidea whythenumberis solow," saysMasilamani, whoseprogramwasapprovedby thestatelegislature."Ourbestguess is that people thinkit's too good to betrue.Andhealthypeopleintheir20smaynot see the value in it."71Wood says he seized on the idea of pre-paidprimarycarefortheuninsuredin2003whenhereadamagazinearticleaboutconciergemedicine.Heknewhecouldn't charge a yearly retainer of $5,000in hard-luck Wheeling as some conciergedoCTors do in affluentsuburbia. But whatwasthelowestamounthecouldchargeandstillearnareasonableprofit?Toanswerthatquestion,Woodhadto esti-matehowmuchcareatypicalpatientwotild need."Ididn'tlookathowmanyvisitsapatientaveragedeachyear.Instead,Ilookedatthetotalnumberofservic-eslabs,X-rays,andproceduresaswellas visits.Iestimatedthattheaver-ageadultneededabout20servicesayear.AndIestimatedthat$1,000ayear wouldcoverthem."ThismathtranslatesintoWood'sretainetfeeof $83 a month for an individual. A fami-ly pays only$42more. Enrollees are entidedto unlimited office visits; any service the clinicprovides,includinglabsandX-rays;andhealthy-lifestyle cotinseling. Wood throws freeinjeaablemedications,crutches,andsplintsinto the deal. He treats sick children, too, butrefers them elsewhere for immunizations.Woodmadethe planavailable tohis staff,thenadvertisedittothecommunity,envi-sioning that small businesses might even pur-chase it for their employees. His first taker wasaself-employedmusicteachernamedDavidYtincke. It was good timingfor Ytincke, whowas diagnosed with high cholesterol."BetweenthelabworkandtheLipitorsamples,I'mdefinitelygettingmorethanmymoney'sworth,"saysYuncke."Ifeellike I'm cheating Vic."Inall,50peopleotherthanemployeeshave signedup forprepaid care so far. "Twothirdsareindividuals,"saysWood."Theaverageageis37.They' retypicallyemployed,sotheymaketoomuchmoneyto quality for Medicaid."Is he breaking evenonthem? So far, saysWood,the demandforservices seems to bestaying withinhis original estimates.Acostlyfightfora legislativevictoryThenumber of patientspaying Vic Wood amonthly retainermightbe higherif it hadn'tbeenfortheinterventionofstateinsurancecommissionerJaneCline, who said he was operating asanunlicensedinsurer.Woodstopped advertising his prepaid pri-marycare,butsinceheneverreceivedaformalceaseanddesistorder,hemaintainedtheprogramandcontinuedtoaddenrolleeshere and there.Towardofffuturetrouble.Wood turned to the state l^slature180milesawayinCharlestonandsoughtanexemptionfrominsur-anceregulations,suchas theneedtohave millionsof dollarsinreserves. A billtothatorderpassedinthestatesenate,butdied in the house. Wood attributes the defeatto lobbying by the insurance industry.T. RandolphCox, an attorney who lobbiesforHMOsin West Vii^^a,says the legisla-tionwouldhave givendoaorslike Woodanunfaircompetitiveadvantageoverhealthplans since they wouldn't have to comply withregulationsdesignedtoprotectconsumers.For example, retaitier practices shotild be sub-jecttoratereview,saysCox,notingthatWot)d'smonthlyfeeforindividualsis almosttriple the amount that HMOs typically budg-et for primary care per individual.Butwhyshotildinsurersviewamedicalpracticeas seriouscompetition?It's becauseinsurershavebeentargetinglower-incomeAmericansthemselveswith"limitedbenefitWEST VIRGINIA LEGISLATUREWood' sclinictakespati entsona walk-inbasissixdaysa week.Onlyasmallpercentageofhispatientstakeadvantageofhisretainermodel ,however.Nevertheless,itdidcatch theattentionofWestVirginiaGov. JoeManchin, whosigned ameasureintolawauthorizinga three-yearpilotprojectbased onWood's model.72 Cover Story December15, 2006 Medical Economicsivunu. memag. complans" thatresemble Wood'sprepaidmodel,explainsPaulGinsburg,presidentofTheCenter for Studying HealthSystem Change.Suchplans may exclude hospitalization,capthenumberof officevisits per year, or limitWashington state alsoponders retainerpracticesWhileFP Vic Wood's idea ofprepaidprimary care was inspired byconciergemedicine, his Wheeling, WV, practice (discussed in theaccompanyingarticle) doesn't fit the classic conciergemold. Mostconciergepractices chargepatients what some have called anaccess fee, but neverthelessbill thepatient's health plan forservices, says Seattleinternist GarrisonBliss, chairman of theSociety forInnovativeMedicalPractice Design, an association forconciergedoctors.Bliss and his twopartners belong to that minority that eschewsinsurance and charges a global fee coveringall primary care.Monthlyrates are based on a patient's age$40 for ages14 to20, $65 for 21 to 35, and $95 for those over 35. Each doctorlimitshimself toroughly 800patients, most of whomhave healthinsurance.Bliss likens his retainer practice not toan insurance plan, but to ahealth club membership.He views Woodas a kindred spiritin thecause ofrestoring the doctor-patientrelationship, sans middleman."We focus on doing the jobright, not doing thebillingright," saysBliss "That's a very big changein the culture of medicine."NowBliss is waiting for Washingtonstatelaw tocatch up withthis change. Earlier this year, stateinsurancecommissionerMikeKreidlerrequestedlegislation toexempt doctorslike Bliss fromlaws goveminginsurers. Thebill wouldhave created a lighterregulatoryburden, requiring, for example, thatphysiciansplacemonthlyretainer fees in a trust accountand access themonly atthe end of the month. Andphysicians couldn't turnawaypatientsbased on their health.Mirroring what happenedin West Virginia, the Washingtonbillsailed through the statehouseby a vote of 95 to3, but sank inthesenate after theinsuranceindustrymobilizedin opposition. Itsargumentssounded familiarthebill lacked consumersafeguardssuch as rate oversight, and it favoredretainerpractices overinsurers. Kreidlerplans tohave the billreintrociucedin thenextlegislative session.Meanwhile, nobodyis tellingBliss toshut downhis conciergepractice. That's goodnews for him, becausehe envisions a new,less expensive version of prepaidprimarycare for the uninsured.Next year he plans tolaunch twoclinicseachstaffedbytwodoctorsand twonurse practitionerswherepatients can makesame-day appointments.It will be open12 hours each day of theweek."The monthly fee will probablyaverage around$60, witholderpatients paying no more than $75 or $80,"says Bliss.totalcoststoseveralthousanddollars,butmonthlypremiumsaredirtcheapaslowas$40."Soinsurersseeretainerdoctorsasbona fide competition," says Ginsburg.Althoughflattenedinthestatelegisla-ture.WoodcaughttheattentionofWestVirginiaGov. Joe Manchin, whoappointedthe doctortoa taskforcethatwas address-ingtheneedsoftheuninsured.Woodresumedhisthree-hourdrivestoCharlestonthroughhilly,coal-miningcountrytoespouseprepaidprimarycare."Fora longtime,Iwasmakingthetriponce a week," says Wood. "I wore out a car inthe process. The whole experience was a blur."Andanexpensiveblur,too.Heestimatesthathis adventureinhealthpolicy costhimapproximately$300,000whenheaddsuphis travel expenses andlost income as well aswhat he spent to lobby politicians. "It almostpushed me to the point of hankruptcy."But Woods perseverance and sacrifice paidoff.Thetaskforcerecommended,amongother things, that the state launch a three-yearpilotprojectforprepaidprimarycare. Gov.Manchintoutedthe task forcerecommenda-tion,legislationwas drafted,andonApril 3,2006,Manchinsignedthe measureinto law(he was carefulto say it wasnt insurance).Underthepilotproject,eighthealthcareorganizationsselectedby thestate willofferpatients a two-page list of basic primary careservicessimilartothoseWoodprovides.Predictably, Woodhas appliedto participate(as of press time,theselectionshadnotyetheen announced). Each organizationhas thelatitudetosetitsownfeeandevenchargeco-pays, althoughrates must be approved byinsurance commissioner Jane Cline.EventhoughWoodprevailedinthe statelegislature,theinsuranceindustryisn'texactlylyingdown.OnthesamedayManchinsignedthebillauthorizingthethree-yearpilotproject,healsosignedanotherbillpermittinghealthplanstooffersurprisealimited-benefitpolicythatwotildcoverprimarycareandpreven-tive services. Thepremiums,Manchinsaid,couldbe as low as $99 a month.Can Wood'smodelpayoff?The experience of Seattle internistGarrisonBliss (see box on this page) suggests thattheuww. memag. comMedical Economics December15, 2006 Cover Story 73pilotprojectforretainermedicalpracticesinWesrVirginiatnightgaintraction.Blisshasmadea livingtreating800patientsout-side the realmof insutance since1997.Vic Woodsays thattomaintainhisclin-ic'scurrentrevenuelevel,heandhis associ-atetogetherwouldneedtoexpandthenumberofretainerpatientstoeither1,500individualspaying$83amonth,1,000familiespaying$125permonth,orsomecombinationofthetwocategories. Afami-ly, of course, counts as two patients atmini-mum.Alltold,preservingthestatusquotranslatesintoarosterof750to1,000retainerpatients foreachdoctor.Thepatientcoutitis importantbecause ifaretainerpractice sets its fees toolow, it maybetemptedtomakeendsmeetbyenrollingmorepeoplethanitcatireasonablyhandle."Inmostcases,Idon'tthinktheconciergemodel canbe done well withmorethan600patients,"saysRobertaGreenspan,aChica-gomanagementconsultantwhospecializesin concierge praaices.It'snotjustthenumberofpatientsthatfigureintothebusinessequation,it'stheirmorbidity."Thebiggestriskfacing a doctorinaretainerpracticeisattractingadispro-portionateshareoisickerpatients,whorequiremore services," says thinktank pres-identPaulGinsburg.Woodsays heexpectstoenrollmoremedicallyneedypatientsashisretainerpracticeexpands,butbalancethemwithenoughhealthy patients."It'slikearestaurantownerwhocharges$9forhisbuffet,"says Wood."Heknowssomepeoplewilleat$12worthoffood,andsome only $6 worth."Evenifprepaidprimarycareworksforpatientanddoctoralike,it's still opentothechargeofbeingapiecemealapproachtomakinghealthcareaffordable.BothWoodandBliss counter that their service goes handinhandwithanHSAandahigh-deductibleitisurancepolicy,andthatallofthemcouldbeemployeebenefits. ITiepremiumforpri-marycare,notes Wood,couldautomaticallyapply towardthe policy's deductible.Thisarrangement,Ginsburgsays,runscountertothespiritofHSAsandhighdeductibleplans,whicharesupposedtomake patients moreprudentusers of health-carebysaddlingthemwithmorefinancialresponsibility."Withprepaidprimarycare.patientsassumelessrisk,"hesays."Theycanvisitthedoctoras ofi^enastheywant."Still, Ginsburgisn'twillingtodismiss pre-paidprimarycarewhichheclassifiesasinsurancesimplybecauseit'sfragmentary."Inthe history of health policy, peopleunfor-tunatelypassuppartialsolutionsthatwouldimprove things because they're waiting foranultimate solutionthatnever arrives."Sonia Ghambers, chair of the West Vu^niaHealthGare Authority,views the pilotprojeaasagoodstartinsettingtheneedsoftheuninsured."Wearetalkingtospecialtysoci-eties to see if they could puttogether networksofferingreduced rates," she says. "We don't seethe pilot projeaas a comptehensive solution."If theinitiativeftzzles,itwon'tbeforanylackofeffortbyWood."Thismodelofhealthcareisdrivingme,"hesays."1feelobligatedto offeritto patients."He'slookedintotheireyeslongenoughtoknow something has to change.There areanswerstothehealthcare crisisthat don'tinvolveinsurancecompanies.Vic Wood,MD