Bill Lent is one of Houston’s finest internists. How do I know this? Well, because I know who trained him (my late father) and he has been my personal physician for the past 15 years or so. Having been blessed with good health, the only medical service that I buy from Dr. Lent in most years is my annual physical, which I generally schedule for about this time each year. I always enjoy catching up with Dr. Lent, who provides me with “on the front line” information regarding the horrific cost of health care regulations, which are literally strangling the market for primary care physicians in the U.S.
It’s been particularly interesting watching the evolution over the years of Dr. Lent’s internal medicine practice, from one in which Dr. Lent provided an unusually high level of personal care to his patients (something my father emphasized in his teaching) to a high volume, impersonal practice that virtually all primary care practices have been required to adopt to remain even marginally profitable under the present U.S. health care finance system. Over the past ten years or so, Dr. Lent has continually confided to me during our annual visits that he was uncomfortable with the direction of his practice.
So, I was pleased to learn when I scheduled my physical a couple of weeks ago that Dr. Lent is doing something about it. Starting next month, Dr. Lent is commencing a concierge health care practice, administered by MDVIP out of Boca Raton, in which he is limiting his practice to about 600 patients who will pay Dr. Lent $1,500 annually for the benefit of receiving his personalized style of service. Coincidentally, this Wall Street Journal ($) article earlier this week described the proliferation of pre-paid health care plans, which is sort of a lower-priced form of what Dr. Lent is doing. The WSJ article essentially describes how many primary care physicians are simply dropping out of insurance plans — both public and private — in favor of prepaid plans that offer unlimited access to basic health care for set monthly fees.
Inasmuch as the employer-based health insurance system typically offers low-copays and deductibles for the vast majority of health care services, a substantial amount of the American health care finance system is basically prepaid health care already. In order to maintain profitability in a highly-regulated market, insurance companies compensate for these low usage fees by charging higher monthly premiums, lowballing doctors’ fees, and challenging claims continually. The result has been the evolution of a primary care system that is incredibly bureaucratic (have you ever tried to figure out how your insurance pays claims?) and literally breaking down.
The MDVIP model treats primary care service similar to a health club membership. The model focuses on the delivery of relatively inexpensive, protocol-driven care than can be offered at a relatively low cost while still providing patients more overall access. MDVIP’s model is relatively expensive, so low-income patients will have a difficult time affording the fee. However, providing a tax deduction for individual health insurance would make such pre-paid plans more affordable for low-income patients, while providing Medicaid patients with vouchers for prepaid health care would have a similar impact.
Who will be threatened from the proliferation of these plans under the current health care finance system? Well, it’s a bit early to speculate, but my sense is that insurance companies with big stakes in employer-based health insurance will not enjoy the competition from MDVIP-type practices. Similarly, speciality providers who depend on state regulatory mandates in comprehensive insurance plans to subsidize their practices will also feel the competitive pressure if these types of plans catch on in a big way.
So, I’m going to enjoy learning about how Dr. Lent’s practice changes over the next year under the MDVIP structure. If it is successful, as I suspect it will be, it makes you wonder — if such entrepreneurial spirit can be generated even in the current highly-regulated health care finance system, then imagine what could happen if we unleashed the power of the marketplace to reform the delivery of health care and the health care finance system?

Peter Huber is a Manhattan Institute senior fellow, an MIT-trained engineer and a lawyer who has authored several books, including Hard Green: Saving the Environment from the Environmentalists and Galileoís Revenge: Junk Science in the Courtroom. In this provocative City Journal article, Huber observes that the complexity of modern diseases virtually assures that a “one-size-fits-all” socialized medical system will fail:

That is the real crisis in health careónot medicine thatís too expensive for the poor but medicine thatís too expensive for the rich, too expensive ever to get to market at all. Human-ity is still waiting for countless more Lipitors to treat incurable cancers, Alzheimerís, arthritis, cystic fibrosis, multiple sclerosis, Parkinsonís, and a heartbreakingly long list of other dreadful but less common afflictions. Each new billion-dollar Lipitor will be deliveredóif at allóby the lure of a multibillion-dollar patent. The only way to get three-cent pills to the poor is first to sell three-dollar pills to the rich.
With almost $30 trillion under management, Wall Street could easily double the couple of trillion it currently has invested in molecular medicine. The fastest way for Washington to deliver more health, more cheaply, to more people would be to unleash that capital by reaffirming patents and stepping out of the way.
On the other side of the pill, molecular medicine can only be propelled by the informed, disciplined consumer. Any scheme to weaken his role will end up doing more harm than good. Foggy promises of one-size, universal care maintain the illusion that the authorities will take good care of everyone. They reaffirm the obsolete and false view that health care begins somewhere out there, not somewhere in here.
Neither Pfizer nor Washington can ever stuff health itself into a one-price uniform, One America boxónot when health is as personal as ice cream, genes, and pregnancy, not when every mother controls her personal consumption of carbs, cholesterol, Flintstones, and Lipitor. But the thought that government authority can get more bodies in better chemical balance than free markets and free people is more preposterous than anything found in Das Kapital. Freedom is now pursuing a pharmacopoeia as varied, ingenious, complex, flexible, fecund, and personal as life itself, and the pursuit will continue for as long as lifestyles change and marriages mix and match. Given time, efficient markets will deliver a glut of cheap Lipitor for every glut of cheap cholesterol. And given time, free people will find their way to a better mix.

Read the entire article here.