Westhill Consulting Insurance - Nobel Prize Winner Sets Sights on Fixing U.S. Healthcare
Having
heard Clay Christensen expound on disruptive innovation, it shouldn’t come as a
surprise that change always comes from outside of incumbent players. While
health orgs are dooming their innovation to failure or dither by not taking any
meaningful action, it’s notable that a Nobel Peace Prize winner sees an
opportunity to fix a critical portion of the U.S. healthcare system. As any
good entrepreneur would do, Yunus identified an unmet need and so Grameen
created an offering tailored to their target customers.
This
article is a section of a longer paper on Direct Primary Care (DPC) that was
introduced in an earlier piece – Health Plan Rorschach Test: Direct Primary
Care. The following excerpt from that article briefly explains DPC if it’s a
new concept. Click through the previous link for additional context.
Despite
its inclusion in Obamacare, Direct Primary Care (DPC, aka Concierge Medicine
for the Masses), it’s surprising how few health insurance executives know about
DPC. DPC is a model of paying for
primary care outside of insurance. The individual or organization paying for
healthcare pays a monthly fee (like a gym membership) for all primary care
needs. Generally, DPC providers say they can address 80 or more of the top 100
most common diagnoses.
Grameen
America Partners with DPC Provider to Low Income Patients
Nobel
Peace Prize Winner, Muhammad Yunus, is famous for creating the concept of
microfinance which has brought thousands out of poverty via the Grameen Bank.
Grameen America is their U.S. affiliate which has already lent $93 million to
over 17,400 women impacting 70,000 people (each borrower averages a family of
four). Their microfinance repayment rate is 99.4% in the U.S. which is even
more impressive than they have achieved internationally. Grameen has partnered
with Iora Health to offer primary care services to their borrowers in New York.
They believe addressing healthcare is a key facet of bringing people out of
poverty.
Grameen’s
plan is to initially offer Iora’s services only to Grameen borrowers. After
that, Grameen will extend Iora’s services to their family members (including
children) and eventually more broadly.
Like their microfinance program, it isn’t designed as charity. Rather,
Grameen borrowers will pay $10 per week ($43/month) which they expect will be
economically sustainable. The borrowers, many of whom are undocumented workers,
fall outside of what Medicaid and Obamacare address so the rest of the
healthcare system is quite happy to keep these individuals out of the ER or
even Federally Qualified Health Centers. Grameen’s “competition” will be the ER
and FQHC so they must demonstrate that higher level service and dealing with
the same healthcare team provides distinct advantages over disjointed (though
often free) care in the ER/FQHC.
This
development will further debunk the myth that DPC isn’t applicable to the broad
populous. Given the extremely high Net Promoter Scores Iora achieves (higher
than Google GOOG +1.57% or Apple AAPL +1.56%), if there is a “two tier
healthcare system” (a common criticism of retainer-based medicine) it is higher
income people getting the short end of the primary care stick. Doctors call the
flawed fee-for-service model “hamster wheel primary care” because it’s a
nightmare for the doctor and delivers sub-optimal value for the consumer —
i.e., rushed 7-minute appointments, insurance bureaucracy laden processes, and
delays in getting to see a doctor, etc. Not unlike how mobile phone carriers
have developed profitable offerings to serve low income immigrant populations,
Grameen hopes to prove they can do the same in healthcare. It will be
interesting to watch.
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