By: Jeff Weeks, Partner, Chief Operations Officer
Recently an announcement was made about 3 successful and well-respected CEO’s, Jeff Bezos, Jamie Dimon and Warren Buffett, working together to create their own non-profit healthcare company. The article, “Disruption, Thy Name Is Bezos . . . and Dimon and Buffett!” outlines how Amazon.com, JP Morgan Chase and Berkshire Hathaway are working together to improve the American healthcare system. They are disrupting the health care market and who can blame them, it’s become a complete mess.
The State of Health Care: It’s a Mess
For example, let’s take a look at one of my recent health care experiences. I went in to have my sinuses cleaned out, a typical outpatient procedure performed at a hospital-owned surgery center. The procedure took about an hour, required general anesthesia, and when finished, I was allowed to return home to recover.
However, when I received the EOB (explanation of benefits) from my insurance carrier, I was astounded at the total bill for the procedure: $78,000! I almost needed to see a cardiologist when I first looked at the EOB… I thought I was going to have a heart attack! After all, I didn’t have brain surgery. What was even more astounding, was what my insurance carrier deemed “allowable charges”, just $2,800.
Think about that, how is a patient supposed to make an informed decision about having a procedure performed, when the amount due is approximately 3.5% of the actual billed charges?
Even more, how is the medical provider supposed to run a successful business when they are only collecting 3.5% of the billed charges and providing a 96.5% discount on billed charges? How can you ever be transparent when you have to mark up your charges 96% in order to make a profit?
When you go to your local discount store and purchase a roll of paper towels, you know instantly how much that roll of paper towels is going to cost and you aren’t allowed to leave the store without paying for them. There typically aren’t any surprises, you know exactly what the cost is. Why can’t it be like that for healthcare?
Now envision you are a company like JP Morgan Chase with 20,000+ employees and you spend 1.2 billion dollars on healthcare annually. Moreover, you are facing the typical increase in healthcare premiums of 9-20% (which for them means $108M to $240M per year). Where does that leave you? You may ask yourself:
- Does the patient get a 9-20% increase in the level of care that they receive?
- Does the provider get a 9-20% increase in what they get paid for the services that they provide?
The answer is no. Instead, the patient gets less access and less choice and the provider will likely see a decrease in reimbursement and therefore have to see a greater number of patients to offset that decrease. Not good for the provider and not good for the patient.
So when Bezos, Dimon and Buffett seek to can change healthcare within their organizations, and throughout the country, you can’t blame them. The healthcare market is an opportunity, not to make money, but to improve a system that cannot be sustainable if the following continues to be true:
- Hospitals have to give a 96.5% discount on billed charges
- Patients have to pay 9-20% more for healthcare each year
- Providers have to deal with a decrease in reimbursement each year
Why does this matter and how does it relate to ARC Physical Therapy+?
At ARC Physical Therapy+, our mission is to be a “catalyst of change by redefining EXCELLENCE in healthcare.” This has never been easy and is getting more difficult by the day, but that doesn’t deter me or anyone else at ARC Physical Therapy+, because it matters.
It matters that we want to provide great care. It matters that we’re proud of the organization that we work for. It matters that we have earned a reputation for being excellent and that average is NEVER good enough! Like those 3 CEO’s we want to make a difference, for our organization, and countless others.