Forbes | Zina Moukheiber, Contributor, March 19, 2013 — The number of doctors enrolled in Medicare last year has hardly changed since 2005, and participants have increased less than 5%. Doctors have recently averted a 27% cut in Medicare payments, but that will only last until the end of the year. There are simply no financial incentives for them to care for the sickest people.
Not for the Chens, a family of doctors from Miami, Florida. Where others avoid patients on Medicare, they have spotted an opportunity. James Chen, and his son Christopher run Chen Medical Centers, a chain of eight clinics in the Miami area, employing more than 40 primary care doctors, including 25 specialists. Other family members include son Gordon, a cardiologist and Tiger Mom Mary (as Chris Chen calls her) who’s the chief operating officer. Last year, the Chens opened two clinics in Richmond, Virginia, and three in Norfolk. Five more will open in both cities this summer. “Virginia is highly underserved for Medicare,” says Chris Chen, also a cardiologist, and the group’s chief executive officer. He’s searching for other markets, primarily in the Southeast. To fund the expansion, ChenMed has raised money from angel and corporate investors, but Chen declines to give details.
As early as 1985, James Chen, a 63-year-old internist, started focusing on sicker, older, and poorer patients (less than 5% can afford a supplemental plan). As a preventive measure, he saw them every month, whereas doctors typically see Medicare patients every four to six months. “He gained a reputation for liking sick people,” says Chris Chen. However, it wasn’t until 2003, when Chen became a patient himself that he realized how inefficient the health care system can be. Doctors had grossly misdiagnosed him, telling Chen he had a cancerous mass at the base of his brain stem. They informed him that he had six months to live, but would need radical surgery to cut the area around his eyes, nose, and part of his mouth.
Luckily, Chen had a treatable form of lymphoma, and has recovered. During his ordeal, he was struck by the doctors’ lack of compassion, their lack of accountability—they got paid regardless of outcome, the absence of coordination between specialists, and the length of time it took to book appointments, or even to find a doctor. He no longer practices, but has applied those lessons to build ChenMed.
- Doctors see patients every month, but daily slots are available in case of an urgent appointment. They’re able to do so, by limiting the total ratio of patients to doctors. It is 375 to 1; as opposed to the typical 1,200-2,000 to 1.
- Specialists are available at the clinics, so that an 85-year-old doesn’t have to travel to different locations.
- The sickest and poorest patients don’t have the means to travel, so the Chens provide a chauffeured van for door-to-door transportation. There’s also a pharmacy at the clinics.
- Doctors are held accountable. If a patient has a bad outcome, the doctor has to explain the case to the rest of the group. Patient cases are discussed three times a week. Doctors get a bonus if they improve outcome. (They don’t get equity).
ChenMed bears the full risk of managing Medicare payments for hospital stays, doctors, and medications, but Chris Chen says its strategy of focusing on preventive measures, instead of rationing health care is paying off, and ChenMed is profitable. Hospital admission rates for Chen patients (per 1,000 patients) are 18% less than the national rate, and 17% less for readmissions. Cholesterol levels for Chen patients taking statin drugs are 22% lower than the national average.
Technology also plays an important role. ChenMed employs 15 software developers who create everything in-house, including electronic health records. When doctors meet three times a week, they discuss, among other things, ways to improve care. They then relay their ideas to the IT folks. One example is the “Life Card,” which is the size of a credit card. Instead of filling out paperwork at every visit, and handing out insurance information, patients just scan their card, which also informs them of their estimated wait time. Their EKG is burned on the back of the card, and can be seen with the naked eye, in case the patient is admitted to a hospital.
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