Expanding Medical Clinic Challenges Health-Insurance Moguls
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After 12 years at the helm of Long Live the Kings, a Seattle- based salmon-conservation nonprofit, Barbara Cairns encountered a problem. Providing health care for her dozen employees was "getting more and more expensive," she says. Insurance premiums, then about $600 a month per employee, were going up between 10 and 20 percent every year. Moreover, her staff was complaining of substandard health care: Doctor's visits were rushed, and employees faced a perplexing maze of specialists because their primary physicians were too busy to coordinate their health care.
"As someone who provides health care to my employees, looking at the increasing costs of that to the organization, and seeing my own frustrations about how to handle my own health care, I stepped back to look at what we were doing," Cairns says.
According to a U.S. Census report released last year, 47 million Americans lack health insurance—a 22 percent increase since 2000. Many of them are the so-called working poor—people who have jobs but nonetheless struggle to pay for their families' basic needs, such as housing, food, and health care. According to a 2006 study by the Henry J. Kaiser Family Foundation, more than a third of small businesses don't provide health insurance to their employees. And the number of small businesses that don't offer health coverage is growing.
But Cairns found a program that allows Long Live the Kings to buck the trend. Qliance, a 15-month-old company based in a downtown Seattle clinic, saves money by cutting out the middlemen: bloated health- insurance companies that require doctors and insurance administrators to manage collections and payments on every service. Instead, Qliance charges a flat monthly fee of about $60 for basic health care. Employers then take out a separate—and less expensive—catastrophic health-insurance policy, which covers things like car accidents and strokes. Employers also pay into a fund that employees can access for at-cost prescriptions from the Qliance pharmacy.
As of January 1, instead of being restricted to 15-minute appointments, employees can see a doctor for a half hour to an hour; instead of going to a doctor no more than a few times a year, employees can visit their doctor as often as they need; instead of paying co-pays, employees' costs are built into the monthly charge; and instead of paying $620 a month, Long Live the Kings pays just $360.
"If we did nothing different, I don't know that we could have continued to afford the same level of insurance coverage," says Cairns.
The idea is winning converts. Qliance's clinic currently has six physicians and nearly 2,000 patients (a mix of employer-funded and individual members). But demand from 18 employers south of Seattle is driving Qliance to open a new clinic in Kent with capacity for 6,400 patients.
Dr. Garrison Bliss, a cofounder of Qliance, had a similar monthly-payment practice on First Hill with two other doctors, but opened Qliance to expand the model.
"This is meant to scale," says Bliss, sitting in Qliance's downtown clinic, where his dark khaki slacks match the walls. "This model is mean to bring care to millions of people, not just a few hundred."
The current employer-funded health- insurance model has been wreaking systemic problems on the economy, Bliss says—draining paychecks and making everything more expensive. For instance, the three leading Detroit auto manufacturers claim that health-care costs increase the price of each vehicle by more than $1,500.
"The employer has been funding an extravagant medical-insurance party for the last 50 years," Bliss says. "And that party is about to come to an end, because the employers won't have this money to spend [on health insurance] anymore."