Episode Setup
[00:00:00] Stacey Richter: Episode 529: Facility Fees, Low Professional Fees, Stark Law Stipends, and Noncompetes. The Chain Reactions Wrecking Healthcare Affordability. Today I am speaking with Dr. Eric Bricker.
[00:00:34] Stacey Richter: Hello, all you Relentless Tribe members. Hey, thanks for being here with me every week, some of you every single Thursday. Give yourself a little round of applause, maybe silently and in your own head depending on where you are.
But yeah, you matter. You being here matters. There's real power in this tribe of ours, and I'm not kidding to take a moment to thank yourself for being who you are and showing up in the way that you are.
Why Agency Matters
[00:01:00] Stacey Richter: Many do not, and here's the problem with that: if we blame all of our problems on intractable, inevitable structural constraints, we lose our own agency.
That is a brilliant insight from the episode with Dr. Lisa Rosenbaum from a couple of weeks ago. And it's not only important because you being here is also you taking back your agency and our collective it-takes-a-village opportunity to fix the healthcare industry in this country, but it's also the perfect lens for today's conversation because we are unpacking the exact action/reaction chains.
We talk about two today, that were both very much a part of creating the healthcare mess that we're in and how we can actually take action to stop the chain reactions that are still actively chain reacting, still actively kinetically decaying or whatever the science word is.
Having this information and understanding how these action reactions work is what it will take for us to figure out how to reverse the direction of these things, make healthcare more affordable, higher quality, better outcomes instead.
[00:02:39] Stacey Richter: My guest today is the legendary Dr. Eric Bricker from AHealthcareZ, and together as I just said, we are tracing these two distinct but very adjacent action/reaction chains that have collided to spark a fire of pretty staggering healthcare inflation and kind of the opposite of the quadruple aim.
I'm Stacey Richter. This is Relentless Health Value. Thank you so much to Aventria Health Group which is our founding sponsor.
Thank you so much to our series underwriter in 2026, Payerset. And I just wanna let you know that Payerset just posted about 129,000 self-funded employers’ allowed amounts on their website for free. So do go over to Payerset's website if you want to check that out.
Also, thank you so much to Patient Rights Advocate for a really nice donation this year.
With that, let's get to it. Here is my conversation with Dr. Eric Bricker.
Dr. Eric Bricker, welcome to Relentless Health Value.
[00:03:41] Dr. Eric Bricker: Oh Stacey, thank you so much for having me, and thank you to everybody for listening and watching.
Facility vs Professional Fees
[00:03:45] Stacey Richter: So today we're gonna talk about how two kind of action/reaction chains have combined together to create a bigger action and reaction chain. So let's start with the first kind of tendril in our entwining rope here. And the first one I'm gonna say is that there's two kinds of payments.
One of them is facility fees, and then the other one is professional fees. You have said that it's interesting that facility fees are actually tracking with inflation, but professional fees are not. Do you wanna dig into that?
[00:04:31] Dr. Eric Bricker: Yes. So important thing in healthcare finance to understand is that when you get a medical service, typically you don't just get one bill. You get multiple bills, right?
And so at a very basic level, they separate out the bills for the physicians, that what's called the professional fee, from where you had your service done, which is the facility fee, which if it's done like at a hospital, it's for, like, the building and to keep the lights on and to pay for the nurses and the staff, etc, etc.
It's two completely different billing and collection processes, and they operate actually fairly differently.
And so specifically for traditional Medicare reimbursement, the payment for professional fees has, relative to inflation, is actually lower now than it used to be. Whereas the facility fee payment by traditional Medicare has largely kept up with inflation.
And that has implications for things like Medicaid and commercial insurance as well because a lot of times, Medicaid and the commercial insurance, they kinda mirror what traditional Medicare does. And so a lot of the commercial professional fee reimbursement also hasn't been going up to keep up with inflation.
And then on the facility side, a lot of commercial facility reimbursement is actually even outpacing inflation, and it's rising even faster than inflation. So understanding the dynamic around how those... You've got the two different bills, and in terms of, like, how much is being paid, they're really separated.
[00:06:01] Stacey Richter: We often talk about how hospital charges are 50% of any given plan sponsors spend in any given year, and this is really an underlying component of that which I really hadn't heard said in such stark terms before.
Lobbying and Fee Gaps
[00:06:19] Stacey Richter: That if you start thinking about it also that you've got two different organizations here, right?
You've got the AHA who's lobbying for facility fees largely, and then you've got the AMA that's largely lobbying for professional fees. So it seems like to me the AHA is quite a bit better at this.
[00:06:38] Dr. Eric Bricker: That's right. And, so part of the obviously one of the largest, if not the largest lobbying forces in Washington DC is healthcare between hospitals through American Hospital Association, with physicians with the American Medical Association, with health insurance carriers, with America's health insurance plans, with pharmaceutical companies, with pharma.
I mean, they all do massive lobbying to the federal government. But really, at the end of the day, the American Hospital Association has been much more effective in having Medicare reimbursement to facilities, to the hospitals go along the lines with inflation, whereas the American Medical Association really has not been as effective.
[[00:07:20] Stacey Richter: Look tribe this right here is a huge point that I have never heard dots connected on like this before. So I'm stopping right here pausing so that we all can let this sink in and i'm going to add one more wrinkle here that I'm going to bring up again in a minute or so in the actually the original interview. Here's the thing hospital charges facility fees are outpacing Inflation part of the reason for this is kudos to the AHA for excellent lobbying.
And fair enough I don't know how big a part but considering the millions spent by the AHA to this end, they are at least probably proud to take credit for a material bit of those increasing facility fees.
Then you have professional fees, provider professional fees which are not keeping up with inflation, flatlining, especially for like PCPs.
But this is true for even “profitable” service lines like ortho, orthopedics. I've seen plenty of analyses showing real professional fee reimbursement for like total hip replacements, total knee replacements going down over time. I'm connecting this to the AMA. I don't Know isn't the AMA supposed to be the big lobbying group in DC for doctors. I think so. I'm, maybe not sure. Because I'm thinking about the numerous conversations lately about how much money the AMA makes by selling ICD codes.
And about how only something like I don't think 10% of doctors are members of the AMA. Here are two videos [Video 1] [Video 2] from Dr Elisabeth Potter about this. She's amazing. Follow her.
But yeah, the AMA obviously has a $300 million business priority?
That's how much they make annually off their code selling operations. But what's the problem with hospital payments skyrocketing in comparison to what an independent clinic, a physician can manage to get paid? What does this site of care variation incentivize? Longtime listeners already know where this action reaction chain is headed.]]
[00:09:32] Dr. Eric Bricker: And part of the reason for that, this is in my opinion, is that physicians are largely balkanized based upon their individual specialty. So you also have, you know, radiologists kind of have their own advocacy group and anesthesiologists have their own advocacy group and pediatricians have their own advocacy group.
And so to a certain extent, the American Medical Association as far as reimbursement goes, it's really hard for them to represent quote unquote all physicians. And so what's happened is that you've gotten these like these micro lobbying groups.
And of course because they're not coming together as a unified group, they tend to be less... again, this is my opinion, they tend to be less impactful than the American Hospital Association which is in a unified fashion representing America's hospitals.
[00:10:17] Stacey Richter: Just to underline that point, and then I've got my own opinion in all of this. I was reading a post by Dr. Graham Walker, offcall.com and he said for an appendectomy, the doctor's Medicare payment is $609. The hospital published charge is $48,126.
Another one was, inguinal hernia repair doc Medicare payment $415. Hospital published charge $39,000.
Right? So like this isn't just like sort of incrementally different. We are talking orders of magnitude here.
[00:10:54] Dr. Eric Bricker: Those are orders of magnitude difference and again it's important to keep in mind that those numbers for the facility, that's the billed charges. That's not what they're actually getting paid by Medicare.
But your point is still well taken. For that appendectomy when the physician... When the surgeon is getting paid $600, the hospital might be getting paid probably $3,000 to $4,000 so you're still talking multiples of what the physician is getting.
And that then translates over on the commercial insurance side where the oftentimes commercial insurance might reimburse maybe 20% above what Medicare reimburses the physician.
So you're still talking like less than $1,000 for the surgeon for the appendectomy but the way that the facility contracts with commercial, hospital contracts with commercial insurance, it might be like 12 grand. Right, so again you're talking potentially upwards of 10X more than what the physician is being paid.
The way that they get paid is very different.
[00:11:52] Stacey Richter: If we're thinking about the why there also just kind of like relative to why the hospitals have been able to keep their reimbursement at the high levels that it continues to be versus the professional fee schedules being flat at best, it also could be that the AMA makes….
I think I read a stat the other day like 90% of doctors are actually not even a member of the AMA because the AMA makes most of its money off of the coding guides the RUC which, you know, you said the profession is balkanized. The RUC didn't help let's just put it that way, and if you wanna go back and listen to a show all about that listen to the one [Episode 437] with Brian Klepper from a while ago.
Site Neutral Payments
[00:12:37] Dr. Eric Bricker: So site, the term site neutral payments is an attempt at fixing the current state, which is site unneutral payments.
[[00:12:46] Stacey Richter: Right. Exactly because we wound up in a world where facility fees, hospital charges are so much higher than professional fee schedules relatively and in comparison with inflation. So we have these big site unneutral payments. That's the bottom line here and the source of our first action/reaction cascade.]]
[00:13:09] Dr. Eric Bricker: The very classic example is like an echocardiogram, like an ultrasound of the heart done by a cardiologist. If it's done on a cardiologist, Medicare pays a lot less than if it's done at a hospital.
And so what that does is the site unneutral payments is just a scheme that hospital systems use to maximize their facility fees, their facility payments.
And what they do is they then buy the cardiology practice and they say, "Hey, cardiologists, now all your echocardiograms are gonna be done at the hospital and not at your office anymore."
And so we the hospital system, are gonna make a lot more money because we get all that volume of echocardiograms that used to be done in the office and now they're done at the hospital.
And we, the hospital system, are willing to pay you, the cardiologist, to buy your practice because of that future revenue stream of echocardiograms. The same echocardiograms are done, the same cardiologists are reading it, but then who's paying more are the taxpayers. All you've done is done the exact same service for the exact same number of patients and have it cost taxpayers more. That's all you've accomplished.
And the hospitals will come back and say, "Well, we need to do all this because we have all these uninsured patients.” They're gonna have all these excuses around why they need to do this. That's fine, and some of those excuses may be legitimate, but the point is it just increases the cost of care for the exact same service.
[[00:14:32] Stacey Richter: Okay, so first action/reaction chain, site unneutral payments lead to consolidation, consolidation leads to higher payments for taxpayers and plan sponsors such as self-insured employers as well as patient/members themselves. So let's move on.]]
Stark Law Basics
[00:14:48] Stacey Richter: Let's talk about the second action reaction, which is that the Stark Law happened, which gives rise to stipends, right?
So Stark Law and then we've got stipends. And I kinda wanna define terms before we kick it on this. Like what is the Stark Law just to start out?
[00:15:10] Dr. Eric Bricker: Yeah. So long decades ago and again this the Stark Law actually only applies to federal programs, so it doesn't even apply to commercial insurance.
It's just the federal government said, “Look if for any federal dollars that hospitals cannot pay physicians for referrals.” Because they used to do that. They're like, Hey you know surgeon if you want to do a surgery, if you do that surgery you know and the surgeon was independent and they'd say, and the hospital would say, “Oh surgeon if you wanna do your surgery over here at the hospital, we'll give you some, we'll give you some money to do it over here as opposed to our competing hospital across town.”
And so the Stark Law said, okay well you can't do that. That's illegal all right. So fine, so the hospital can't do this quid pro quo you do the surgery here we'll you know we'll pay you money for doing it.
[[00:15:58] Stacey Richter: And look certainly not advocating for doctors to get paid for referrals or anything that the Stark law was trying to prevent.
But in the land of unintended consequences, The Stark Law is one to study. Hospitals having an incentive to buy up local doctor practices we just talked about and for a whole lot more on that topic do go back and listen to the episode from last year with Dr. Bricker where we really dig into all of the dirty and also lucrative little corners of that playbook.
But not getting paid for referrals for those doctors, physicians not savvy enough or too balkanized, not organized collection actiony enough to get themselves into this stipend zone that we're gonna talk about in a moment. Yeah, if these referrals were a source of revenue now you have independent doctors having that source of revenue removed at the same time that we have the hospital fee, professional fee disparity that we just talked about happening.
So why not get bought or get hired by a hospital? It's just another point to ponder here.]]
Stipends and Consolidation
[00:17:08] Dr. Eric Bricker: And so to your point around stipends is, I'm sure many of you are familiar with these stats where many physicians are now employed by hospital systems but a lot of physicians and physician groups are not. And so when a physician groups goes to, to practice or see patients at a hospital they sort of collectively as a physician group, it could be a group of surgeons, it could be a group of anesthesiologists, it could be a group of gastroenterologist or a group of cardiologists, you get the idea.
These tend to be physicians that actually do tests and procedures and see patients at a hospital, is they say, Well look, you the hospital, it's against the law for you to pay me for referrals, but you need to give me a stipend, sort of a flat fee amount to incentivize me to even have my patients go there at all.
And so the hospital system might say, “Okay sure, we'll give you as a GI practice or you as an anesthesiology practice, we'll give you a million bucks a year, $2 million a year, $10 million a year, $50 million a year. We'll give you depending upon how big the hospital system is and how many physicians there are.”
And it's contract. They'll be... And the physicians agree to certain services like they'll provide ER coverage and they'll provide inpatient consults, etc, etc.
But essentially what has happened is that it's become a game of power and consolidation where when the, as the hospital systems have consolidated their power there's not that many hospital systems in a town.
I'm sure you've, you've all heard the statistics before about how most metropolitan areas in America actually have very low levels of hospital competition.
And so the physicians are like, “Oh, well if we combine into larger and larger physician practices, then we'll have more bargaining power for larger stipends when we negotiate for coverage.”
And this has happened a lot with anesthesiology, right? So there is very large anesthesia groups now that say, “Oh you want anesthesiologists for your OR? Then you need to pay us a very large stipend. And we have so many anesthesiologists in our group that if you don't pay us for this stipend for us to sedate people for their operations, you're gonna have a hard time finding any anesthesiologist to come sedate your patients for procedures.”
And part of the argument from the physician groups is like, “Look, you at the hospitals, you're getting a ton of money from commercial insurance and Medicare compared to what we get paid for our professional fees. So you need to give us some of that facility fee money, not in a way that would violate the Stark Law in this quid pro quo way, but rather in the form of this sort of lump sum stipend.”
And these stipends have become very expensive for hospital systems. In some senses, some hospital systems are like it's one of our fastest growing expenses is actually to pay these stipends to these physician groups.
[00:20:05] Stacey Richter: I just wanna back up for a sec just to kinda go through the chain of events. So we have the Stark Law which basically says you can't, you can't pay for referrals. You, you just can't.
At the same time, we've got the action reaction that we were talking about before which is that hospitals are now getting paid a ton more than the professional fees.
So you could see if I was a physician kind of in that mix, I'd kind of be like, “Hey, what about me?” So then as you said, the idea of the stipend came up where a hospital says, “Well, I'm not gonna pay you for referrals but I'll pay you a million dollars a year for you to practice at my hospital.” So that's how we're gonna solve this issue compliantly.
So then the idea of the stipends starts to happen. Doctors start banding together so they can preserve their stipends and negotiate with these hospitals. Then of course you've got private equity on the scene who's just like, “Hey I sense an opportunity here.”
So then you've got the private equity kind of in the mix who's helping, I guess roll out practices not only so that they can get market power outside of the hospital, but also because there's an opportunity to raise the stipends.
[00:21:22] Dr. Eric Bricker: That's right.
[00:21:23] Stacey Richter: So we've got right now, we've got the impact of facility fees being high, professional fees being low, plus the Stark Act and these stipends. So all that's going on. If we're thinking about how what that all adds up to relative to the patient, which by the way, we've been talking for I don't know how long, Dr. Bricker, and the word patient has... This is the first time it's coming up.
[00:21:55] Dr. Eric Bricker: That's right. That's right.
Patient Impact and Access
[00:21:57] Stacey Richter: If we're thinking about how all of this impacts patients, what would you start listing if I was gonna ask you to tick off patient impacts right now?
[00:22:09] Dr. Eric Bricker: Yeah. So all this just increases the cost of healthcare.
And of course, you know, one person's cost is another person's revenue. So basically, the physicians and the hospitals are both acting to maximize their revenue, but somebody's gotta pay. Yeah, the government pays. Yeah, the insurance companies pays. But yeah, the patients pay as well.
If you're traditional Medicare, you've got your 20% co-insurance that you're paying for all this. And if you've got commercial insurance, you've got your deductible and your coinsurance, etc.
So you've got higher patient out-of-pocket costs for these associated healthcare services. And so this is where the prices go up because the hospitals then go back to the health insurance carriers and negotiate higher rates for commercial reimbursement.
Okay, so fine. Money, it's really not about the money. What it's really about is access, in that any time you raise the out-of-pocket cost for patients, you're limiting access for them. At the end of the day, like, the quality of the healthcare, like, doesn't matter at all if you can't access it in the first place.
[00:23:11] Stacey Richter: If everyone's just thinking about their own vested interest, at the ends of the day, it is not a shock that care is not, as a trend, becoming more affordable. It's becoming incredibly unaffordable.
[00:23:26] Dr. Eric Bricker: That's right. That's right, and that's, that, you know, that's the famous, you know, Charlie Munger, you know, the former vice chair of Berkshire Hathaway said, “You know, of course healthcare is messed up; the incentives are all wrong," right?
And again, I like to say that listen, Charlie Munger was on the board of directors for a hospital in Los Angeles for 35 years. The money is not aligned, it's not conducive to the physicians and the hospitals acting in the best interests of the patient.
[00:23:50] Stacey Richter: At the same time though, just because there is an incentive doesn't necessarily mean that everyone is acting in their own, you know, personal best interests and,
[00:24:00] Dr. Eric Bricker: Oh, 100%
[00:24:00] Stacey Richter: And, you talk to a lot of especially doctors and physicians that listen to this show, they're just like, You know what I did all day? Not make money. Like, I did a number of different things every single hour which I was not compensated for but I knew was the right thing to do on behalf of my patient.
And I think that one of the things that does become clear is that the further away you go from the patient, the more you start acting in alignment with exactly and specifically what the incentives are.
The further from the bedside you get, the more the incentive is going to be predictive of behavior.
If I'm kind of thinking through what the takeaways are here or what is the proactive action that can be taken, obviously we've got the issue with these stipends. We've got the issue...
You know, consolidation of any kinds, if we're thinking about the fact that this whole industry relies on market, the market to function in order for it to function and then you've got this market consolidation that creates dysfunction in the market however that winds up happening is not a competitive market that's going to wind up rationalizing prices.
[00:25:19] Dr. Eric Bricker: It's becoming less and less fluid. You have less and less choice. And so unfortunately, I mean, I, you know, this isn't a great analogy but that's why when you encounter healthcare, it kinda feels like going to the Department of Motor Vehicles. It's like well, what are you gonna do? You don't have any other options.
Noncompetes and Burnout
[00:25:35] Dr. Eric Bricker: This is where you get, you know, these issues of physician burnout etc, etc, because what happens for the physicians is they're trying to do the best they can for the patient and because they're employed by these hospital systems that don't have policies and procedures and priorities that aren't necessarily aligned with what's best for the patient, it's like, you know, decrease your length of stay, discharge the patient.
Well maybe I want them to stay for an extra couple of days or maybe there's something else that I wanna do. Maybe I wanna do an inpatient service versus an outpatient service or what have you.
And then when the physician is working at a location that does not align with how they wanna best treat the patient, then they can't leave because they've signed a noncompete with the hospital system.
So the physicians are stuck. It's kinda like the golden handcuffs. They can't... even if they wanted to leave, they couldn't. And there was a very good example of a group of physicians called the Tryon Medical Group in Charlotte, North Carolina, where that exact thing happened. They were bought by a hospital system; the hospital replaced their nurses in the clinic with medical assistants and the physicians were like, No, we want nurses. We don't want medical assistants.
And so they left and then they then had to sue the hospital to let them leave and it was only because the hospital cried uncle and said, No, no, no, it's okay. And then the physicians called up every single one of their patients and said, “We're leaving.” And over 90% of the patients went with the doctors and didn't stay with the hospital system.
And that Tryon Medical Group example is the exception that proves the rule. And the rule is the vast majority of physicians don't do that. They want to do that, but they don't have the organization or the courage or the gumption or what have you to do what Tryon did.
So one of the things that would make it a lot better is if these noncompete agreements were like outlawed; to say that look it's restrained trade. If the physician wants to leave they can leave in hospitals are like well we can't have them take all the patience and blah, blah, blah.
Listen, at the end of the day the most important thing that patients can do, that physicians can do, is they can vote with their feet. It shouldn't take an act of Congress just vote with your feet and go somewhere else.
And so things that are done that restrict patients from being able to vote with their feet and go someplace else, are a problem which is why we're talking about this.
Sleeping Giants Strategy
[00:27:54] Stacey Richter: If we're thinking about advice here, what I am hearing you say is to really harness the power that may exist for two sleeping giants.
And I'm gonna give the blunt version here, but for a lot of context definitely go back and listen to the show from several episodes ago with Dr. Suhas Gondi, “The Sleeping Giants of Healthcare”.
So the first sleeping giant is the... it's almost a cliche at this point, self-insured employers who pay for healthcare, the ultimate purchasers for something like 60% of all Americans.
You hear the term sleeping giant referring to them a lot, ie, if the ultimate purchasers would actually harness the power that their dollars really should confer them, then things could change around here in the healthcare industry.
[00:28:50] Dr. Eric Bricker: This is where the large employers like Disney and Boeing and Home Depot and Lowe's, etc, etc, are like, “We have to take matters into our own hands because these dynamics around physician and hospital price escalation and service escalation that the carriers have not been able to handle very well, we need to take…” And my opinion is that's the right approach because no one is coming to save you. Okay?
So the only, you as an employer are going to address this is if you as the employer address it. Nobody's gonna save you. I'm sorry. I wish somebody was gonna come and save you.
[00:29:35] Stacey Richter: That's the first sleeping giant.
But the second one that, that has been coming up more often over here on Relentless Health Value is the idea of physicians. That what can be accomplished if physicians band together in a nonbalkanized way and advocate for themselves as well as their patients. And you gave one example just now. Another one might be what is going on in Eugene, Oregon with PeaceHealth.
And there was emergency room physicians that were going to be replaced. Their hospital wanted to replace them with a private equity firm Locum Physician Group. The emergency room physicians banded together on behalf of their community, their patients, themselves, and fought that off successfully.
Another example, I think there was a nurse's union that did similar. Like, so there are examples these days of really compelling things which are possible if these groups are operating, you know, leveraging the power that they have, but also working together.
Because you've got the ultimate purchasers, which are employers who have the potential to work with the ultimate deliverers, physician led independent ones right and really figure out what the optimal way is to kind of create a vice grip maybe on what's going on in the middle there.
If I'm thinking about another piece of advice here, I'm gonna say site neutral payments. Site unneutral payments as a reason for example hospital consolidation, independent practices being bought etc.
[00:31:14] Dr. Eric Bricker: The important thing that I would say to the listeners of this podcast is that all of these games are very high stakes with lots of money involved.
So site neutral payments is saying, “Hey Medicare we're gonna pay for that echocardiogram in the physicians office or in the hospital the same amount,” and the hospitals don't want that at all. And then commercial insurers are like well if Medicare's gonna do site neutral than we'll follow suit and we'll do site neutral as well.
So”site neutral” payments would decrease the cost of healthcare for individuals and for employers and for governments. So those constituents all want site neutral payments and hospital systems do not want site neutral payments.
[[00:32:01] Stacey Richter: Okay, so now we are in the advice portion of the show and we've got two pieces of advice so far.
Number one: Fix noncompetes for docs and others so that folks can vote with their feet, which is what a market requires.
Also fix site unneutral payments; that's a major driver in both our action/reaction chains of events leading to consolidation which is the gas in a downward spiral of increasing unaffordability, staggering healthcare inflation, market failures pricing failures.]]
Employer Direct Contracting
[00:32:33] Dr. Eric Bricker: Well, and this is like specifically for employers.
What they're doing today... Like 'cause it, you know, it's like what's within your control, right? There's their circle of concern, and then there's your circle of influence, okay?
And so, like are you gonna change Medicare policy when it comes to like site neutral payments? Like no. Like but what you can do as an individual employer is this is where direct contracting has become a much more popular strategy for employers, okay?
So that's a real solution that our employers are doing today.
[[00:33:11] Stacey Richter: I don't think a show goes by lately where direct contracting doesn't come up. And yeah, it's a sea change and often logistically challenging. But there are also increasingly resources that help employers make direct contracts happen including our sponsors: Upswing Health, HealthHere, ZeroHealth, Aligned Marketplace, Green Imaging and others.
Here's Dr. Bricker with a third piece of advice.]]
Beyond Fee for Service
[00:33:36] Dr. Eric Bricker: Really, the entire fee for service model where just a doctor or hospital system like does something and then gets paid, what that does is that doesn't create fee for health it creates fee for service just like it says. And so you're not incentivizing health, you're just incentivizing doing stuff.
And everybody knows an ounce of prevention is worth a pound of cure. And that means treating conditions a lot earlier in the process in a much more proactive way as opposed to a very expensive reactive fee for service way.
And so honestly, that's why I'm on the board of a direct primary care company because all direct primary care companies they contract with employers on a fixed monthly subscription for unlimited use by the employees at zero out-of-pocket.
So to the extent... And, and by the way, they've done this with specialist services as well. There was a group of urologists in Los Angeles that got fixed monthly payments to take care of specifically men with prostate cancer. And they found that the outcomes for those men with prostate cancer were more, were better and more aligned with urology guidelines when the urologists were not being paid fee for service but instead were being paid on a subscription basis.
So you as an employer you don't have to, again, you don't have to switch all of your services to subscription based. You can just start with primary care or just start with one specialty and that is the beginning of breaking.... You gotta understand listen, traditional Medicare, they keep moving the date by whether it's twenty thirty or twenty thirty five like they have no intentions of leaving traditional Medicare as fee for service.
Like they realize that is not the future. That will bankrupt America and it's bad for America's seniors. So just know that the future of healthcare is not in fee for service. And you know, and all the clinicians and hospital systems out there I mean there's gonna be a lot that are going to go down kicking and screaming, but the future of healthcare is not the payment structure that it is today.
[[00:35:46] Stacey Richter: Revisiting the top of this conversation, I just looked this up [AMA Article].
The AMA has pivoted the narrative of CPT from a fee-for-service billing tool to a uniform data language necessary for measuring outcomes. According to AMA leadership, you cannot reward value or quality unless you can precisely track what services were actually provided.
To this end, they have also launched a value-based care working group to shift how codes function so that they can be used for bundled care models and longitudinal and team-based care.
It is, as aforementioned, a $300 million a year business, so you would expect them, for sure, to be protecting it.]]
[00:36:26] Dr. Eric Bricker: And so, so again, I don't, I don't want to boil the ocean, but just look at what particular part of your health could you start paying on a direct subscription basis? I mean, there's gobs of employers that have already done this.
This is not some weird hocus pocus idea. If other people can do it, you can do it too.
[00:36:48] Stacey Richter: Go listen to the episode with John Quinn relative to treating health plan, the network like a supply chain.
And then there's a short episode with Cristin Dickerson that was released in August 2026 about how... You know, in certain cases, especially if it's for radiology or something like that, fee-for-service could be fine, but then you can't have the same person in charge of driving volume who is also taking the fee-for-service payment, right?.
Because if the perverse incentive is volume and it's something like radiology where the radiologist can't be like, “Oh, we're gonna do seven more tests, right?”
Then you're separating the incentive, that perverse incentive, from who's got the power to abuse it. And in certain cases like that, sure. Right?
So the, the show with Dr. Cristin Dickerson is a nice follow on there.
Wrap Up and Where to Follow
[00:37:39] Stacey Richter: Dr. Eric Bricker, is there anything that I neglected to ask you that you wanna talk about right now?
[00:37:45] Dr. Eric Bricker: Stacey, you did a fantastic job as always, and thank you everybody, for listening. And with that, I just, you know, keep, keep plugging away.
Stacey's not going anywhere. I'm not going anywhere. So just keep on keeping on.
[00:37:59] Stacey Richter: Right. And so if someone is interested in watching your videos, AHealthcareZ on YouTube. Anywhere else you'd direct people?
[00:38:06] Dr. Eric Bricker: Yeah, or follow me on LinkedIn. I think I'm the only Dr. Eric Bricker on LinkedIn. So either go to AHealthcareZ on YouTube, or you can follow me on LinkedIn both places, you can see the videos.
[00:38:14] Stacey Richter: Dr. Eric Bricker, thank you so much for being on Relentless Health Value today.
[00:38:18] Dr. Eric Bricker: Thank you.