Qliance

Primary care doctors in Seattle are looking to eliminate insurers from the medical care process. 

“Qliance customers pay $99 to join, then a flat monthly rate of $39 to $119, depending on age and level of service. Patients can quit without notice and no one is rejected for pre-existing conditions…Co-founder Norm Wu said per-patient revenue is triple that of insurance-based clinics. He said many costs are fixed so the firm, now losing money, will turn to profit as business grows.  More than 50 noninsurance clinics operate in 18 U.S. states, based on different business models, Wu noted.”

In essence, primary care doctors are providing taking on the risk of excessive patient illnesses.  However, since Qliance only treats patients in the primary care setting, its risk is minimized.  If a patient gets too sick or needs to be hospitalized, Qliance is not liable for these types of medical treatment.  Patient who participate in the Qliance plan need to buy catastrophic health insurance in order to cover hospitalization and speicalist care visits.  This health care model seems feasible for Qliance’s end since primary care visits much more predictable than hospitalizations. 

Will the primary care docs at Qliance simply refer all patients to specialists to save money?  They will certainly have this incentive is the clinic becomes busy, but that will be tempered by competitive pressure to provide quality service.  If quality drops, patients may return to a traditional insurance plan. 

The key assumption here is that patients are able to judge quality in the primary care setting (e.g., physician friendliness, wait times to see a doctor, time spent with a doctor), whereas they may not be able to judge hospital quality or specialist quality when they are severely il and have complicated diseases.

I doubt the membership model will revolutionize healthcare, but I am willing to bet that it will carve out a significant market share from patients who are willing to pay for better primary care.