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Time-Based Fees

I've already explained what episodic and longitudinal care look like, the consequences on patients and the healthcare system, and why family doctors in the current system are incentivized to provide episodic care, despite the many shortcomings.

In this piece, I'll dive a little more into the numbers, and also show how time-based FFS can get us out of this mess. It adjusts the incentives to encourage better care, and then lets the people who know best how to deliver it — family doctors — take control of delivering it.

It doesn't require large structural changes, government micromanaging, or huge investments. It's efficient, scalable, and fast.

Current FFS

This is more or less how family doctors bill the government now:

Appointment LengthCurrent Fee
10 minutes$30
15 minutes$30
20 minutes$30
30 minutes$30
40 minutes$30

As we saw before, that encourages doctors to make appointments very short, so we get things like the "one problem per visit" policies at many clinics, and doctors who cycle through patients very quickly. They don't take the time needed to provide good longitudinal care. Patients and the healthcare system suffer as a result.

Three Family Doctors

To illustrate this, let's look at profiles of three theoretical family doctors:

You've probably met them at your local walk-in clinic (before it closed) or in your virtual health app. Tries very hard to fit everything into 10 minutes. Anything longer than 15 minutes is considered a moral failure.
What we used to think of as a family doctor, who follows you throughout your life. You may not have met this doctor. Spends all the time that is needed to ensure you get the care that you need. Many times that's still a shorter appointment. But when the doctor already knows you very well, they can still provide excellent care for many problems in a short time. Very different from the robo-doc at the walk-in clinic who has never met you before.
If you have a regular family doctor today, this is more typical of what you'd find. Somewhere in between the previous two. Still spends the time when needed, but there's still that pressure for shorter appointments.

What would a typical daily schedule look like for them?

# 10min appts26136
# 15min appts141010
# 20min appts255
# 30min appts034
# 40min appts012
Avg appt length12.115.918.9
Admin min/day240240240
Hours per day12.512.512.5

So all three are putting in a 12.5 hour day (including two hours of paperwork and administrative work, all unpaid, and that's probably on the low side). Robo-doc sees more patients because their average appointment time is much shorter.

Service Fees

How are each of the three compensated for seeing patients under the current FFS system? Using our fee schedule from above, let's figure that out.

Let's assume each works five days a week for 48 weeks each year. Which is completely insane if every day is 12.5 hours of work! That amounts to 3000 hours per year, which is almost double what is considered a normal full-time equivalent (FTE) of 1680 hours. But for the sake of illustration, let's go with it.

And did you know that doctors are required to spend what amounts to an average of 80 hours on continuing education each year? This is on top of seeing patients, and at their own expense. Doesn't leave a lot of time for holidays, does it?

Gross Annual Fee$302,400$230,400$194,400

So for the same amount of time spent per day, our robo-doc, providing what we can probably all agree is worse care, is making over 50% more than our ideal doctor, and still a large chunk more than our typical doc.

But of course, it's even worse than it appears. Remember, doctors have to pay overhead from those fees (staff, office space, utilities, license fees, education, supplies). If you're running your own office, that adds up quickly. Around $100,000 per year wouldn't be out of line. So let's factor that in, and also remember how many hours each of them is working.

Gross Annual Fee$302,400$230,400$194,400
Net Fee (pre-tax)$202,400$130,400$94,400
Hours 300030003000
Net per hour pre-tax)$67.47$43.47$31.47

Yikes! No wonder most people have never met our ideal family doctor!

No, $31.47 isn't bad by itself. But also factor in the years of schooling and resulting shorter number of years in the workforce, as well as the massive debt most doctors finish medical school and residency with. Then ask yourself if you'd be happy if someone else with the same training and putting in the same amount of work deserves more than double the pay.

Time-Based Fee For Service

The idea behind time-based fee for services is that doctors bill larger amounts for longer appointments. Not exactly rocket science. Here's one theoretical example of what that could look like:

Appointment LengthCurrent FeeTime-Based Fee
10 minutes$30$30
15 minutes$30$30
20 minutes$30$50
30 minutes$30$75
40 minutes$30$100

And this is what compensation for each of our family doctors would look like using these fees:

Gross Annual Fee (Current)$302,400$230,400$194,400
Gross Annual Fee (Time-Based)$312,400$303,600$295,200

What does this show?

  1. For putting in the same amount of hours, all three doctors are being paid much more similarly (and fairly).
  2. Our typical and ideal doctors are no longer being penalized for spending the time needed to provide good longitudinal care for their patients.
  3. There are still incentives in the system to work hard and see more patients, but they're much reduced, meaning doctors aren't sacrificing as much to provide good care.

Update FFS, Don't Replace It

For many doctors, the basic ideas of FFS are sound. It gives them flexibility to adapt their practice to suit their own needs and those of their patients.

For the government, it's a remarkable bargain, and they don't have to worry about things like managing clinics, which to be honest, they don't do very well and waste a ton of money doing it.

FFS works. But it needs to be updated. Time-based fees are the way to do that.

Now we pay too many doctors to provide shitty episodic care that frequently doesn't help patients and clogs up our health system.

For the same money, patients could have a regular family doctor and receive better longitudinal care.

(Sure, they're seeing fewer patients per day, but the value to patients and the healthcare system of each visit is much higher.)

Fix Primary Care Today!

Time-based FFS needs no new infrastructure or massive investments.

1000s of robo-docs would be able to immediately start providing better care.

Over time, there'd be a large shift back to family practice.

Patients — and our healthcare system — can't wait.