The Ecology of Medicine

By Chuck Dinerstein, MD, MBA — May 06, 2022
There is a structure to how we have organized care. Primary care physicians care for our day-to-day and chronic illnesses while helping us navigate the landscape to find specialists and hospital care when that is needed. They are our Sherpas – knowledgeable of the landscape and its pitfalls and nuances. You wouldn’t attempt to climb Everest without them. Ultimately, because a rope connects you, you must trust them with your life. While that may be a bit dramatic an analogy for a primary care physician, that rope, that trust, is built from many smaller, lower risk encounters. A consistent health Sherpa results in better care.
Image courtesy of fesehe on Pixabay

Let’s talk about the business of retail medicine; by that, I mean the care and costs of seeing your doctor. The revenue side of medicine is much like any other business that offers a range of products and services; most economists speak of having a mix of payors – private insurance, government insurance, and out-of-pocket payments. And while that is important, it is equally if not more critical to have a combination of low and high margin products and services.

Think of a restaurant. Some items yield large profits; pasta and salads come to mind; in econ speak, they are high margin offerings. Other dishes, say Surf and Turf, generate a low profit (primarily because of the expense of the ingredients); they are low-margin offerings. Notice that the price you pay does not reflect low or high margins, especially in medicine, where the government controls prices through Medicare rates or insurance companies that pay a percentage of those rates. Just as a successful restaurant sells a mix of high and low-margin items, the same is true in the medical business.

Another example of this transformation is “concierge” practices, where the practice size is limited, and for an additional fee, you have the complete undivided attention of your primary care physician. The rapid expansion of this care is fueled by private equity investment, which alone should give you pause. But when a practice converts to the concierge format, they are told that the ideal patient is mid-40s with private insurance and perhaps a bit of hypertension and weight issues—a great description of the patient that will need high margin care.

All of the urgent care centers, the in-pharmacy medical offices, concierge practices, and online prescribers are disruptive to the economic ecology of primary care because they are providing care for high margin problems, like a sore throat, earache, prescribing birth control, or need for Paxlovid. That leaves the primary care physicians with just the low margin, more complex illnesses and problems. And while they are equipped to treat those conditions, from a business perspective, the margins are too small to provide those extra five minutes that a Sherpa would and a provider doesn’t.

Continuing to offload simple care to less expensive providers will result in the extinction of primary care physicians in the ecology of medicine. We should be careful what we wish for because, as Joni Mitchell wrote, “you don't know what you've got till it’s gone.”

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Chuck Dinerstein, MD, MBA

Director of Medicine

Dr. Charles Dinerstein, M.D., MBA, FACS is Director of Medicine at the American Council on Science and Health. He has over 25 years of experience as a vascular surgeon.

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