Let's get graphical

As doctors and indeed human beings we are often flummoxed by that most imponderable of imponderables- human nature.

Human beings by their very nature are unpredictable. So, how does one plan a business model or services that caters to Human beings and more so with their health. Lot of people have made stabs at this. There is veritable treasure trove of information available on  variation in patient numbers, peak periods, seasons, the effects of charging for services etc.

Yet, I find that no one in my practice can reliably predict what will happen to the workload during school holidays, for example. Surely, given a stable demographic and years of trading in the same spot, we should be able to say that demand will go up or down and how many Drs we should need to match it. But, never happens. We can have very quiet days and then 1 day can be extremely busy.

So, I thought perhaps Drs are not the best people to be analysing this. We are, in the thick of it and may lack the objectivity or indeed even the skills to analyse this.

At this time I came across a blog by esteemed marketing guru Nirmalya Kumar. I suggest you read this before going any further - it shouldn't take more than 5 mins:
https://nirmalyakumar.com/2016/08/07/pricing-why-make-things-worse

I would urge you to ignore the buzz phrase 'make things worse'. He is talking of products in his blog whereas we are talking about services and no one is suggesting we provide medical services that are deliberately inferior.

To stop you from having to go back and forth to the blog I'll reprint the 2 relevant graphs from the blog here

So, what is the relevance to us as General Practitioners?

I'll tackle this on 2 fronts- one at an independent Dr level and second at a Practice Level from an organisational, marketing, provision of service perspective.

As a GP wherever you are working now look at graph 1. The blue box represents your workload or income. What can you do to increase it- if that's what you wanted to do? 

In my experience, most cannot look beyond graph 1. The only way on that graph to increase your income is to shift the red line to the right, i.e provide more services, work more and thereby increase the size of the blue box. This might work on pure numbers but is it the most cost effective and efficient way to do things? 

Numerous studies link burnout to overwork exist and we as Drs are always advising patients on the value of work- life balance. Costs, go up too. If you work 6 days instead of 5, commuting costs are up. The medical indemnity may increase too. There are various clinical implications too. Will you have enough time to review results, follow up on hospital letters, telephone calls etc. if you are seeing patients all day long?

So, look instead to graph 2.  No matter where you work and how good you are, there will always be consumer surplus and deadweight loss. This is true even if you bulk bill all your services, i.e services are free to the patient. 

How can there be a consumer surplus if services are free? Well, we all have patients whom we refer to specialists for things like annual skin checks to dermatologists, for heart checks to cardiologists etc. These patients can and do pay to see the specialist, so clearly the capacity to pay more, the definition of consumer surplus exists, even in deprived areas. Apart from that there is always demand for cosmetic work. Patients who demand they be bulk billed at every consultation will willingly pay for botox injections!

And deadweight loss? If everything you provide is free, how can you go any lower to attract the deadweight loss? A product can be made cheaper, but how can you make a service cheaper than free? A bit of lateral thinking and you will realise that there is unmet demand for free services, which we routinely ignore. Isn't there a demand for Home Visits or visits to Nursing Homes? For opening at weekends or early mornings/late evenings?

So, if your income is the blue box in graph 1, I suggest rather than expanding that and making it bigger, a bettter option would be to tap a little bit into the consumer surplus and a bit into the deadweight. This always requires some planning and time management. The patients in box p1q1 in graph 2 for example may require more time during their appointments. They may even expect a different, posher, quieter environment. Would you have your botox injections next to the nurse's room where screaming children are having their vaccinations? Unlikely. So, a dedicated day or slot to cater to these patients when the nurse is off would be suitable. The waiting room will be quieter and the receptionists better able to handle any queries.

Opening weekends or unsocial hrs to attract the deadweight is another option. This can be done in hours too. If you are busy and there is waiting list to see you, you could dedicate a few hours a week to a walk in clinic. Patients can see you without an appointment in this clinic for simple problems like script renewals or BP checks. This will stop them from going to another Dr. If you are privately billing consults, you could Bulk Bill this clinic to capture the deadweight. So, the bigger your p1q1 portion, the less onerous your workload will be. To me this is a continuum. You start at the right early in your career at graph p2q2 and move left. Most people unfortunately get stuck in the middle portion and rarely move to the left most portion of the graph. Towards retirement, many practice exclusively in a pattern that mimics the left most portion, but they tend to be using a thinner slice of the main pq box - seeing more complex patients, spending more time with each patient and working less. They haven't truly moved to the p1q1 portion either.

So, approaching this at a practice level. From the above, it is clear what I would suggest. Rather than concentrating on making the main pq box bigger, practices should look to moving from graph 1 to 2.

Expanding the size of graph 1 is fraught with problems. You need to either work your Drs harder- work more days, longer hours or see more patients in the allocated hours. Drs are perhaps the most difficult people to work with. The more you have, the problems you face. More Drs means more support staff required. What happens if a Dr leaves or goes off sick. You now have support staff but no one generating income to support them. What happens if another centre opens up and your deadweight patients move to them. They may do so just because of shorter waiting times for example. 

In my experience, especially in Metros and outer metros of Australia there is cut throat competition in this arena. Surgeries are opening up; chasing the same market. Universal Bulk Billing (UBB) Centres are mushrooming. When services provided are free (to the end user, not to the tax payer) this also leads to what is called over servicing. A very simple example- most UBB practices I know, do not give out blood test results on the phone. So, have a blood test and then go back to get results, even if they are all normal. This is called 'churn and burn'. Pointless medical consultations purely to meet the needs of a model of service. Wouldn't it be better to charge the patient a small premium at first consult, then text them or email them to say "all ok" if results are normal? A fee of $5-$10 can easily be offset by the savings made in not traveling to and paying for transport and parking for example. This could be sold as a value added service to patients.

What of those who can't afford it? They come to your walk in clinic- simple!

The UBB model also promotes what's been described as a bums on seats model. High throughput of patients requires all drs to be present and actively seeing patients; to keeping waiting times down and to compete with other centres in the area. Hence, no one does home visits or sees patients in Nursing Homes. Some don't even do Work Cover. Continuity of care is lost and the potential for mistakes are high. Abnormal result not acted on because the patient didn't come back for a review for example.

My recommendation to anyone owning a centre is simple. Don't expand on the square pq. Go to graph 2 and look into moving into p1q1 and p2q2 instead. Employ Drs with varying skillsets and skill levels. Why would you Bulk Bill a mirena insertion for example purely because the Dr happens to work in a UBB? This service can & should attract a premium of $50-$100 minimum. 

Consultants would charge up to $300 for this. 

Remember the consumer surplus - if you don't value it, neither will the patient.

Have some Drs doing Home visits. Encourage them to do this by reducing your management fee for this service. If the Dr is out of the surgery, not using your room, electricity, receptionist etc then they pay you less management fee and thereby earn more. You gain what you might loose on management fee by expanding your patient base as opposed to trying to overservice your existing base. The latter is always unpredictable too.  It's a win- win situation. Encourage some to acquire new skills (dare I suggest even pay for courses). Having someone with an interest in dermatology performing procedures or minor surgery etc can really move you into higher margins. Bulk Billing procedures is a loss making exercise due to the complexities of Medicare.

I have heard it said before- Drs make very poor business persons. There is a grain of truth in there.

We pride ourselves on practicing evidence based medicine (EBM). Shouldn't our business models follow evidence too?

Gaurav

Part 3- Melbourne

A trip to Australia wouldn't be complete without some wildlife shots! Visited a small farmhouse with some animals. Aryan loved it and we finally got to see some live Kangaroos(saw lots of Roadkill!!!)

Pics are a random assortment of what we saw.

Arrived in Melbourne and met some close friends after many years. He's a GP near melbourne and got talking about our Health Systems. He was surprised to hear how much non clinical stuff we GPs in UK have to do and was also shocked to hear that we have no system of checking for eligibility. In Australia no one gets through without a Medicare card. I was surprised to hear that they have literally next to no admin work to do. Seemed a very relaxed and clinically driven environment to work in. 15 min appointments, no telephone triage, visits etc. If you choose to work at weekends or OOHs you get paid 1.5-2 times regular rates. What's not to like? Why I wonder do we choose to performance manage GPs and lumber them with mountains and paperwork and then complain that they do not spend enough time treating patients?

Melbourne Skyline

With my friend took the Great ocean Drive to the 12 Apostles. Stayed at Apollo Bay and visited Lorne. Pretty seaside resorts both. Lorne is popular with 'Schoolies' and they were out in force when we arrived. Enjoyed the cafe lifestyle and Aryan loved the beach and play facilities that all Australian cities seem to have. Stayed in another lovely apartment.

12 Apostles

The Apartment at Apollo Bay

After that it was back to blighty unfortnately. Our trip gave us plenty to mull over. The lifestyle and opportunities on offer were hard to overlook and the Health System and job offers were equally tough to ignore.  Having found family and friends there too was an added bonus.

Waiting to board the A380 didn't seem glamorous anymore the second time round. More like cattle waiting to be herded onto a lorry!

Waiting to Board at Melbourne Airport

Next blog- The Big Question. To emigrate or not?

The Australian model- fee for service

So what is the Australian model? This is called a fee for service (FFS) system. 

Keeping the gym analogy going- if the UK capitation system is like a monthly direct debit, the FFS model is like paying a fee each time you use the gym but with no monthly payments. Obviously, you pay according to the services you use. 

Many advantages are immediately apparent: it costs nothing to those who don't use the gym. Light users don't subsidise heavy users. If demand goes up, the gym owners simply invest in more facilities, equipment,staff etc. The gym owners have no incentive to try and squeeze profits by providing inferior services or trying to curtail use of their facilities. In fact, they are more than happy to oblige their customers as they are competing with other gyms 

So what about the disadvantages? Firstly, continuity of care is a casualty. People are free to go wherever they like and are not registered with any one practice or doctor (no monthly direct debit). 

Secondly, since people pay a fee to get in, the assumption is they will want something for it so mere reassurance or an offer to review later doesn't work as it does in a capitation based system. Drs feel obliged to investigate or prescribe in such a system. Also from a business point of view it is inherently more risky- you invest in a new service or staff and patients leave to join a new practice across the road. 

Also there is a risk of spiralling costs- there is no cap. Patients demand more and more and business just keeps expanding to fill the demand putting the whole economy at risk. 

But, patients are not gym goers and most people like to see one Dr and value continuity of care. So what is the evidence? Is there evidence that Australia or Canada spend huge amounts on health care? And what about outcomes. Who fares better?

In my next post I will evaluate the evidence to see if any of the assertions are indeed true. 

Australia - An NHS GP abroad

I am a GP in UK and have been practicing for about 5 years now.

In the UK we have a capitation based system for GPs. This was a hard concept  for me to grasp when I first started. A senior colleague and friend explained it to me with this analogy:

It's like a gym membership. People sign up and you get paid a fixed sum for everyone who signs up. You then actually make a profit from the people who sign up but don't use your facilities. 

People who actually use the gym cost the gym owners money. A gym can try and extract some revenue from them by offering them extra services like cafeterias, saunas, physiotherapy,massages etc.

GP surgeries are exactly the same. They get paid a certain amount for providing 'core services' and then they can bid for certain 'extras' called enhanced services or offer other services from their premises like insurance medicals or travel vaccines. 

But the bulk of the income comes from the 'core contract'. Traditionally, GP profit again comes from patients who are registered with the practice but never use the service- the general wisdom is that 10% of your patients will use about 90% of your resources. 

Now, it becomes obvious that a gym in order to maximise profits has to do the minimum possible for the people who do turn up to the gym and yet keep them happy. 

Obviously, if more and more of the members who paid their dues started turning up or the number of people who do turn up started demanding more services then the profit margin of the gym would be affected. In order to resolve this gyms can put up their prices. 

But, the GP contract is centrally negotiated and GPs cannot charge more capitation fee. With an ageing population and increasing demands from the worried well it is obvious that the number of people using the service is increasing. But, If the capitation fee doesn't increase in line with this increasing demand then GP surgeries are bound to suffer. 

This has been going on in the UK for the past several years and puts Drs in a very awkward position and often affects the whole health economy. This is also responsible for the wide variation seen across GP surgeries in the UK. Consider a simple scenario:  a GP surgery sees a big increase in number of patients with diabetes registered with them. A logical response for them would be to hire a diabetic nurse specialist to support these patients-initiate insulin, carry out regular checks, educate them regarding diet, exercise etc. In this way they could keep referrals to the hospital or other services to a minimum and cost the exchequer less money. 

As a clinician this is obvious. But as a businessman? (Think what a gym owner would do in a similar situation) A practice will not be compensated for hiring this staff member or for upskilling their existing staff. 

On the other hand, if the practice chooses to refer every patient requiring insulin to the hospital it will cost them nothing! Thus, they can affectively have a nurse with lesser training and on a lower pay scale or even an Health Care Assistant instead of a nurse and have a higher profit than compared to another practice who chooses to have the requisite skills in house. From a business point of view the approach of the first practice makes sense and that is what a gym owner would do. But, does that make sense in a health context? 

More importantly, as a GP principal having to make these decisions where monetary considerations conflict with your clinical judgement, training and desire and need to serve your patients how does it affect your morale? How does it impact on that holy of holies- The Doctor/patient relationship?

This blog is an account of my journey from here on.

I have been grappling with these issues for some time now. When the government announced that they were giving powers to the GPs to commission services instead of the PCTs I was naive enough to believe this would change things. Surely, GPs would look at the needs of their populations and ensure appropriate services were available to all patients. But, this too has turned out to be a mockery of the original proposal- GPs are in charge of commissioning services from hospitals but have no say in how GP surgeries are run. Since 90% of NHS consultations occur in GP surgeries it is obvious that this change cannot and will not change grass root GP practice and the conflicts I alluded to that GPs particularly principals face will continue.

I am not alone in being disillusioned thus. Apparently, there is a veritable stampede of NHS Drs emigrating to places like Australia, Canada and increasingly the Middle East. 

Some time ago, I decided to explore my options and for various reasons settled on Australia as a potential destination for me and my family. 

First I did try and understand their health and GP system. The Australian and indeed the Canadian system is a fee for service model. More about this in my next post