You-Just-Can’t-Make-This-Up Feature of the Day

By its own calculation, Park Nicollet Clinic loses money on its Medicare patients… So last year, the company asked Dr. John Misa, the chief of primary care, to run an experiment. Could he design a clinic that would be able to deliver care at Medicare prices?

Misa and his team thought they had the solution: a “concept clinic” that uses doctors for only the most complex cases, and steers most patients to nurse practitioners and physician assistants… Then they did the calculations: What if Park Nicollet had used this model in 2009, when it had about a million total patient visits to primary care; and if everyone had paid Medicare rates?

They discovered that the concept clinic would have run at a 40 percent loss; about the same as the current model… The problem, in part, is that Medicare payments also drop under this kind of model; it pays less for visits with nurse practitioners than doctors. That ate up any savings.

Full article on the Park Nicollet Clinic’s lesson in Medicare.

Comments (5)

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  1. Virginia says:

    That’s a really fascinating explanation of Medicare costs. Now the clinic’s incentive is to not treat Medicare patients.

  2. John R. Graham says:

    I have trafficked a lot in the notion that Medicare and Medicaid shift costs to the privately insured but I’m getting less comfortable with it. If the clinic loses money on Medicare patients then it would stop seeing Medicare patients. Maybe it is the case that Medicare patients cover variable costs but not their allocated overhead.

    Anyway, if the folks at Nicollet clinic were trying to reinvent their processes while billing according to Medicare’s Relative Value-Based Payment system using Current Procedural Terminology (CPT) codes, they were on a fruitless errand. The payment system prevents providers rebundling and repackaging services – except for Medicare Advantage plans, which Obamacare wants to get rid of in favor of bureaucrat-friendly Accountable Care Organizations (ACOs).

  3. Joe Barnett says:

    ‘”Medicare is a growing part of Park Nicollet’s business,” he said, especially with baby boomers aging into the program.’

    Sounds like they will be forced to skimp on something, such as capital improvements, in the future.

  4. Ken says:

    This is a wonderful example of how no one on the provider side can gain by saving Medicare money.

  5. Devon Herrick says:

    Medicare only pays physicians 81% of what private insurers pay. I believe Medicare will only pay nurse practitioners 85% of what MDs or DOs get.