RISK ADJUSTED FACTOR SCORE

This weekend I had a fantastic long conversation with a surgeon who is working with several clinics to secure land and create a comprehensive wellness-oriented medical facility in Virginia.  Can't tell you more than that.

                  The reason I'm in the mix is they want to offer a clean food dispensary (this is medical, so you can't call it a grocery store) on site so patients can find and acquire real food as part of a doctor's visit.  The doctor team wants me to help them find good food. 

                  Having just returned from speaking at the Tennessee Health Summit, I pushed him to explain how a wellness-oriented medical clinic works when the American health care system only incentivizes sickness. He admitted this is a hard nut to crack, and will eventually be cracked when insurance quits paying by the episode and pays by the patient per year.  He said this would become widely accepted by 2030.

                  In other words, each insured gets a certain amount of annual expenditure; when that cap occurs, no more money.  Period.  End of discussion.  He said right now in the alternative medical community this is the most accepted protocol to let doctors get paid for wellness.  Right now, the system only incentives sickness; doctors don't get a royalty or commission from insurance companies for keeping you well.  If it were an annual limit where the doctor shared in your non-use of the allotted amount, then suddenly doctors would be incentivized to keep you OUT of their clinics instead of IN.

                  This led to brand new information for me:  RISK ADJUSTED FACTOR SCORE (RFAS).  Ever heard of it?  I hadn't either.  We're all familiar with credit scores that determine your loan risk.  

                  Every medical procedure has a code.  When doctors submit your medical procedure for reimbursement, they pick a code for whatever it is that they did.  Those thousands of codes have extremely specific definitions.  Over time, those codes accumulate your medical risk, or the complexity of the doctor's decisions regarding your care.

                  If you've ever wondered why doctors and hospitals can't give you a price for a procedure, this is the quickest explanation:  they don't know.  All of your procedure codes add up to a RFAS.  The higher your RFAS, the more money the doctor gets for whatever procedure occurred that visit.

                  This means all procedures are on a sliding reimbursement scale depending on your RFAS.  For example, a patient with Type II diabetes who goes in for a toe infection will have a higher RFAS than a patient who has nothing else wrong except the toe infection.

                  If you're thinking along with me, you quickly realize that this system incentives additional procedures and additional diagnoses--even complex, difficult diagnoses--in order to raise the RFAS.  This perversely incentivizes doctors to over-label illness and to keep you coming back for additional issues.  The rationale for the system was to reward the doctors who saw more complicated patients--reward the difficult decisions and difficult treatment.

                  But without further stipulations, it in fact operates as an economic incentive for doctors not to really get you well and for you to maintain dependency on the health care system.  The more sick you become, the more money they make.  Everybody with me on this?

                  Maybe I'm late to the game and maybe I'm just an ignorant peasant, but as soon as he explained the RFAS to me, the health care business became painfully obvious.  I never heard of the RFAS until Saturday.  Now it all makes sense.  I don't know whether to be depressed, frustrated, or angry.  Hopefully this will be something MAHA addresses.

                  Do you think American health care can be improved?