How Does The Villages Health System Work?
 

As a retired banker, I'm trying to figure out how the new Villages Health System works as a business entity.

Articles I've read say that a single doctor with a receptionist, nurse and modest office space must see 8 Medicare patients per hour in order to make a reasonable amount after paying all his expenses. (Assuming his patient roster is heavily Medicare-insured, as is the case in The Villages.)

The Villages Health System says that patients can enjoy extended visits with their primary care doctor. There has been a suggestion that doctors in the system will be paid a salary and that VHS will not be a fee-for-service model. And we can clearly see that the staffing and luxury of the offices are well above the norm, resulting in an above average cost structure.

So as a business, how does The Villages Health System make a profit? Sooner or later that has to happen. Medicine is a business. I just can't figure out how it will work. Does anyone have an explanation?

I'm guessing it is a capitatated system as think I read they are partnering with United Healthcare. Under capitation a managed care company like united pays the health system running a clinic a per member/per month fee. This fee is paid whether the member has a medical visit that month or not. It can be a very lucuritive payment plan if you keep your patients as healthy as possible so they don't need to come to the clinic for a visit.

[COLOR="Green"]It can be a very lucuritive payment plan if you keep your patients as healthy as possible so they don't need to come to the clinic for a visit.[/COLOR]

And this is the goal so should be a win, win for everyone as long as they have GOOD doctors.

My understanding of how the medicare advantage plane work is that the plan has a contract with medicare to provide care to me. Medicare pays the plan (Preferred Care Partners in my case) an annual sum to provide services to me. I don't know what that amount is but I have heard that is is in excess of $12,000 a year. So the provider is making a lot of money as all I have had during the past few years is six month checkups and a few steroid injections.

So, I guess there might be an incentive for the provider to provide minimum services?

Anyone else know how it works?

This is how you will get "Marcus Welby" healthcare:

Coming Soon To America: A Two-Tiered, Canadian-Style Health Care System - Forbes

Having previously worked for a large health insurer / health care provider, these kind of systems worked fine when they were first developed. The reason they were initially successful was their large popularity with young families looking for well child care with little out of pocket expenses. They were known as HMO's or in the sales department as, healthy members only (HMO).

Some HMO models included specialist which were on retainer or contracted for services. Referrals were made to the specialists associated with the health care plan. This model worked well until someone with a serious illness wanted to seek care from one of the top docs and discovered they did not have a choice. The response was you can see whoever you want to see, but we are not going to be financially responsible unless you see one of our specialists who we think is capable of treating your condition.

As people age they need more care and want to have some say in the medical care they receive. Staying healthy is certainly a key to needing less medical care, but age can not be ingnored.

The health model being described in this discussion reminds me of a Kaiser. Doctors are recuited to work for a salary and costs are paid for by Medicare through a Medicare Advantage Plan. A Medicare Advantage Plan is insured by a health insurer who agrees to cover the same basic medical services Medicare pays for. This model can work very well for many Medicare Eligible people, because it gives them access to medical care with less out of pocket expenses.

The initial concern of HMO's is still hiding in the back ground. The plans hire what they determine to be the best doctors and will refer you to specialists who they deem are capable of caring for your needs. I can't stop asking myself, why don't top docs join HMO's?

JMHO

Top doctors don't join HMOS because the HMO manages the patient's care, rather then the doctor and patient managing the care. Referrals, tests, surgeries, etc.all have to be approved by doctors and nurses who work for the HMO. The care is not quality care. Although patients have an 'assigned' PCP, they see whoever is available when they call for an appointment. There is a huge HMO in WA state that has been in business for over 30 years. Although the premiums are less than other non-HMO plans, the consistency and quality of care is lacking. I have been to the Villages Colont Care Center twice now, and I don't see it operating like an HMO. Just my opinion, of course.

More Questions Than Answers
 

Your reply raises some important questions.

• My understanding is that the Developer owns and is funding VHC. He is hiring 64 primary care doctors to staff the eight offices. I'm told you will have a choice of doctors, but only among the eight at "your" office. You can only be a VHC patient at the office to which you're assigned (based on the village you live in). What if you don't like any of the doctors or nurse practitioners at the office to which you are assigned? What if they leave?

• What secondary insurance will you carry? Your choice seems to be the single HMO-type plan offered by VHC and it's United Healthcare partner. What will it cost? How does it cover claims outside the VHC system of primary and specialist doctors? What if you are traveling, what coverage? What if you have a longstanding relationship with a specialist who is not part of the VHC system?

• Will VHC patients be required to use The Villages Regional Hospital? Without starting another discussion here, TVRH has been roundly criticized both here as well as among all the local doctors I've asked about how TVRH stacks up. Without exception every medical professional I asked (five doctors and several nurses) responded by saying, "...don't go there. It's beautiful, but it's a bad hospital. Go to Monroe or Ocala General." But there must be a reason why TVRH is substantially expanding their number of beds. Questions here, certainly.

I haven't thought very much about the questions I would have regarding TVHC system. These are a few which immediately come to mind. It sounds like an attractive idea, but would we be giving up all flexibility regarding our health care choices? Kaiser was mentioned here. As with most HMOs, with Kaiser you can't see a specialist unless your primary care doctor refers you. And then, you're referred to "their" specialist, not one you might choose.

ObamaCare has been intensely criticized as government taking over too many decisions regarding our health care. What's been said here so far suggests that the partnership of United Healthcare, TVRH and the developer (who owns VHC) appears equally controlling. As a retired banker I'm a little uncomfortable, maybe more than just a little, having my healthcare choices dictated by profit-driven entities.

Am I missing something? Is anyone here a patient of Villages Health Care. I'd love to have some if these questions answered first-hand. I'd really love to be told I'm reaching some incorrect preliminary conclusions.

VK, some of your questions can be answered here: The Villages Health The FAQ and Accepted Insurance pages should be helpful.

At the recent Meet the Developer meeting held by the VHA, Mark Morse stated that you may choose your location and choose your doctor.

Regarding insurance, it appears to me that you may have either 1) Medicare plus many Medicare Supplement plans; or 2) one of these Medicare Advantage plans - Preferred Care Partners or United Healthcare.

I read or heard that initially you would be limited to docs in the center servicing your area....until enough centers are built...then you can choose a doc from a different center. They just didn't want 100,000 villagers all trying to get into colony. With their ambitious building plan, this "choose a location" dilemma should be a moot point in a year.

Not necessarily. It's also up to the patient. I know many people who have taken themselves off their prescribed medications because of some fragment of info taken out of context that Dr. Oz or somebody else on television talked about. "Good" doctors can't make people take their medicine and alter their unhealthy and risky behaviors.

Thanks for the link, champion6. It certainly answers many questions asked here plus a lot of others. I encourage others to go to the link to get their answers.

My family is Canadian and have generally been highly successful financially. There isn’t a one of them who cannot afford to buy into what is referred to in the article as a second tier. Yet none of them has ever felt the need to do so. They’ve been newlyweds, they had children, they raised their families (or are raising their families), and those who have done so are now older and retired. So at every stage of life they’ve felt that the basic care provided by the government through their taxes has been all that they’ve needed.

I would have to say, though, that it appears that Canadians have a much better understanding and acceptance of the principle of TRIAGE and are not inclined to balk and complain when someone else’s stroke “trumps” their sprained ankle, even if they got to the emergency room first. Granted they’ve had many years of universal health care to have learned the workings of this principle, but at least EVERYONE has access to health care!

I have gone to Colony Health with my Blue Cross insurance and it is honored. I am not yet Medicare eligible. The completely screwed up the billing, but that's another issue.

I went to colony with a bluecross blue shield Medicare advantage PPO. They told me they do not take that plan. I asked why, it was kind of hinted that my plan does not pay enough. My wife has the regular bluecross blue shield plan and she is covered. As I understand, my plan is a top notch plan. So here I sit in the villages and read about the great healthcare system that is being put into place, for some.