So, this one's gonna be a little bit different. Back last year, I sat down with Dr. Cristin Dickerson. She is the founding partner of Green Imaging, which is a physician-led radiology network doing direct contracting for imaging. And we talked about how imaging can run 6% to 11% of total plan sponsor spend and how direct contracting can bring that down while actually improving access.
For a full transcript of this episode, click here.
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So, that is episode 485 if you want to go back and listen to that whole thing—and you should, because it's a great show.
But here's the thing about a good conversation: It wanders, and somewhere in the middle of that conversation, Dr. Dickerson and I went on a tangent that never made it to the final cut of that episode. But we got into this back-and-forth about PMPM (per member per month) subscriptions, which are a way to conceive of and pay for value-based care. It's a capitated per member per month up-front payment.
So, we talked about this payment methodology versus FFS (fee for service), specifically whether a PMPM—where, again, you're paying per member per month, regardless of whether they use the service or whatever that is being paid for—whether this creates the potential for perverse incentives. Maybe a new and excitingly strange perverse incentives that could be just as perverse as the old-fashioned fee-for-service perverse incentives, depending on who's holding the risk and why.
It's a really good few minutes that is actually a great follow-on from the show from last week with John Quinn (EP524), where he talked about employers, self-insured employers, or other plan sponsors considering buying healthcare like they consider procuring almost every other thing that they probably procure. It's a supply chain, not a "one network to rule them all" construct.
So, John Quinn, he talked about last week this whole supply chain analog, kinda like thinking about for each subassembly or pod of care, which he defines as services that have defined boundaries. So, you can easily see where they begin and end, and it's possible to kind of look around and see who's doing these defined things, these subassemblies, and then buy the subassembly from whomever the plan decides is doing it best.
And look, a lot of plan sponsors, especially ones who listen to this show, are doing or already trying to do this; but I thought this kind of way to think about it as a supply chain with pods of care was refreshing and interesting and maybe feels a little more comfy for plan sponsors.
But these subassemblies, they do not have to come with some kind of crazy new payment model. John Quinn last week made this point, and today—this is why it occurred to me that right now might be a great time to air this earlier conversation with Dr. Cristin Dickerson—she makes the same point.
You can procure with value-based care and PMPMs and bundles with warranties and total cost of care stuff, or you can pay fee for service.
Now I would suggest after listening to this conversation and also listening to the shows with Andrew Tsang (EP521) and several others that there are also different flavors of fee for service.
And maybe we shouldn't be just with a broad stroke saying fee for service, actually, because there's fee for service where you know the price up front and you can see how much you were charged because you're getting the data so you can compare the price that you contracted for with the price that you actually paid. There's that kind of fee for service.
And then there's the kind of fee for service where you don't have the data and all you've got is a discount. So, you sort of don't know what the price is up front. And if you do it that way, then you're gonna add at least 20% to your bill or your clinician's expense line for revenue cycle management, "hot potato" games as, again, discussed with Andrew Tsang a few weeks ago.
And I'll tell you another thing you're gonna have to deal with: probably network pricing games like Ryan Kline talked about in his recent LinkedIn post.
But look, you know, it can be fee for service; but when the prices are figured out up front and they're good prices, and you can see if the billed amount matches the contracted rate, again, real prices now, not some wild discount calculus that takes 20 pages of a contract to explain—I'm talking about when the prices are determined up front—then, you know, if you do it this way, it could be a new day for fee for service. It's certainly the "Keep It Simple, Stupid" payment model here.
This podcast is sponsored by Aventria Health Group, and our 2026 series underwriter is Payerset. Check them out. They are doing some interesting things in price transparency.
I also would like to thank Patient Rights Advocate for their really nice donation this year. Both of these sponsors I thank so much for helping us keep this podcast on the air.
And with that, let's pick back up mid-conversation with Dr. Cristin Dickerson.
Also mentioned in this episode are Green Imaging; John Quinn; Alex Sommers, MD, ABEM, DipABLM; Astia Health; Andrew Tsang; Ryan Kline; Aventria Health Group; Payerset; Patient Rights Advocate; Preston Alexander; Tom X. Lee, MD; and Tom Nash.
For a list of healthcare industry acronyms and terms that may be unfamiliar to you, click here.
You can learn more at Green Imaging and follow Dr. Dickerson on LinkedIn.
Cristin A. Dickerson, MD, is the founding partner of Green Imaging. She is a graduate of the University of Texas (UT) Medical School at Houston, where she was elected to Alpha Omega Alpha Honor Medical Society. Dr. Dickerson completed her radiology residency at UT Houston, where she was a chief resident, with extensive training in cancer imaging at MD Anderson Cancer Center.
Dr. Dickerson practiced for 13 years at the Diagnostic Clinic of Houston, where she served as a two-term president of the 50-physician clinic and oversaw a self-funded health plan.
She founded Green Imaging in 2011 to provide affordable, high-quality medical imaging for uninsured and high-deductible patients in Houston and rapidly expanded the company to provide services throughout most of the United States and to employer-sponsored health plans. She loves being able to provide quality services to patients who otherwise couldn't afford them and delivering significant imaging cost savings to patients with healthcare coverage and their employers without compromising quality.
00:00 Introduction to this episode.
01:02 EP485 with Cristin Dickerson, MD.
01:15 What today's conversation entails.
04:40 EP521 with Andrew Tsang.
05:35 LinkedIn post by Ryan Kline.
06:36 The conversation with Dr. Cristin Dickerson.
07:13 In a PMPM scenario, who is taking the risk?
08:54 EP482 with Preston Alexander.
10:44 What mitigates the perverse incentive to drive up volume.
11:32 EP445 with Tom X. Lee, MD.
12:18 The other difference between PMPM and fee for service.
Recent past interviews:
Click a guest's name for their latest RHV episode!
John Quinn, Dr Suhas Gondi, Ge Bai, Andrew Tsang, Stacey Richter (EP520), Dr Lisa Rosenbaum, Claire Brockbank, Stacey Richter (EP517)
[00:00:00] Episode 525, PMPM vs FFSThe Perverse Incentives Plan Sponsors Sometimes Miss. Today I am talking with Dr. Cristin Dickerson.
[00:00:24] American healthcare entrepreneurs and executives you want to know. Talking. Relentlessly seeking value. So this one's going to be a little bit different. Back last year, I sat down with Dr. Cristin Dickerson. She is the founding partner of Green Imaging, which is a physician led radiology network doing direct contracting for imaging.
[00:00:50] And we talked about how imaging can run 6% to 11% of total plan sponsor spend and how direct contracting can bring that down while actually improving access. So that is episode 485 if you want to go back and listen to that whole thing. And you should because it's a great show.
[00:01:09] But here's the thing about a good conversation. It wanders. And somewhere in the middle of that conversation, Dr. Dickerson and I went on a tangent that never made it to the final cut of that episode. But we got into this back and forth about PMPM, per member per month subscriptions, which are a way to conceive of and pay for value-based care. It's a capitated per member per month upfront payment.
[00:01:38] So we talked about this payment methodology versus FFS, fee for service.
[00:01:47] Specifically, whether a PMPM, where again, you're paying per member per month, regardless of whether they use the service or whatever that is being paid for, whether this creates the potential for perverse incentives, maybe a new and excitingly strange perverse incentives that could be just as perverse as the old fashioned fee for service.
[00:02:14] Perverse incentives, depending on who's holding the risk and why. It's a really good few minutes that is actually a great follow on from the show from last week with John Quinn, where he talked about employers, self-insured employers or other plan sponsors considering buying health care like they consider procuring almost every other thing that they probably procure.
[00:02:40] It's a supply chain, not a one network to rule them all construct. So John Quinn, he talked about last week, this whole supply chain analog, kind of like thinking about for each sub-assembly or pod of care, which he defines as services that have defined boundaries. So you can easily see where they begin and end.
[00:03:05] And it's possible to kind of look around and see who's doing these defined things, these sub-assemblies, and then buy the sub-assembly for whomever the plan decides is doing it best. And look, a lot of plan sponsors, especially ones who listen to this show, are doing or already trying to do this. But I thought this kind of way to think about it as a supply chain with pods of care was refreshing and interesting and maybe feels a little more comfy for plan sponsors.
[00:03:34] But these sub-assemblies, they do not have to come with some kind of crazy new payment model. John Quinn last week made this point, and today, this is why it occurred to me that right now might be a great time to air this earlier conversation with Dr. Cristin Dickerson. She makes the same point. You can procure with value-based care and PMPMs and bundles with warranties and total cost of care stuff, or you can pay fee for service.
[00:04:02] Hi, I'm Alex Summers, physician and founder of Estia Health. What I appreciate about Relentless Health Value is that it doesn't simply talk about what's wrong with health care. It brings together people who are doing the hard work of fixing it. The conversations are honest, practical, and focused on creating better outcomes and greater value for patients and employers. It's a resource I regularly recommend to others working to transform health care. I highly recommend signing up for the weekly newsletter.
[00:04:27] It's a great resource because it includes all the links mentioned in the show, plus a full transcription of Stacey's intro. Please be sure to follow the podcast on Apple Podcasts or Spotify and forward this episode to someone who should be listening. Now, I would suggest after listening to this conversation and also listening to the shows with Andrew Tsang and several others, that there are also different flavors of fee for service.
[00:04:54] And maybe we shouldn't be just with a broad stroke saying fee for service, actually, because there's fee for service where you know the price up front. And you can see how much you were charged because you're getting the data. So you can compare the price that you contracted for with the price that you actually paid. There's that kind of fee for service. And then there's the kind of fee for service where you don't have the data and all you've got is a discount. So you sort of don't know what the price is up front.
[00:05:23] And if you do it that way, then you're going to add at least 20 percent to your bill or your clinician's expense line for revenue cycle management hot potato games, as again, discussed with Andrew Tsang a few weeks ago. And I'll tell you another thing you're going to have to deal with, probably network pricing games like Ryan Klein talked about in his recent LinkedIn post. But look, you know, it can be fee for service.
[00:05:47] But when the prices are figured out up front and they're good prices and you can see if the billed amount matches the contracted rate, again, real prices now, not some wild discount calculus that takes 20 pages of a contract to explain. I'm talking about when the prices are determined up front. Then, you know, if you do it this way, it could be a new day for fee for service. It's certainly the keep it simple, stupid payment model here. My name is Stacey Richter.
[00:06:15] This podcast is sponsored by Aventria Health Group and our 2026 series underwriter is Payerset. Check them out. They are doing some interesting things in price transparency. I also would like to thank Patient Rights Advocate for their really nice donation this year. Both of these sponsors, I think, so much for helping us keep this podcast on the air. And with that, let's pick back up mid-conversation with Dr. Cristin Dickerson.
[00:06:42] One of the things that is really important is, yes, value-based care is good and bad things. I think when people are talking about value-based care and having skin in the game, one of the things that hits us, we have no PEPM, no admin fees. We're just charging for the exam. We're taking on the risk by not charging those things, you know, and the risk that nobody's going to use us, even though we've put hours and hours of implementation into it.
[00:07:08] Done all this electronic investment with the TPA to get hooked up. So, right, if value-based care is paid for as a PMPM per member per month, and not all of it is, of course, not all value-based care is paid for in this capitated way. But if we have a PMPM scenario, then who is taking the risk that the service will be used is the purchaser, right?
[00:07:34] Because irrespective of use, unless, I don't know, there's terms in the contract around minimum usage and clawbacks or something, which, by the way, I've seen really bad examples of this where the plan is still getting screwed. But the point being that if it's fee-for-service, then it's the vendor or the partner who has to drive their own engagement and usage. The plan is not paying for any services that are not rendered.
[00:08:01] But let me ask you this, still kind of on this value-based care tangent. You said that you charge fee-for-service because that reduces your perverse incentives that you might have if it was a PMPM. However, the whole reason why value-based care got started was to reduce the perverse incentive of fee-for-service. So how are you reconciling that? In other words, fee-for-service drives volume, especially if you've gotten rid of the prior auths or the pre-auths.
[00:08:28] Right. But we haven't. We're doing radiologist protocols instead, which actually saves another 25% probably by downcoding, where radiologists are taking the contrast away, getting rid of the without and with contrast and those things that cause savings. You know, where outcomes are trackable, I think PEPMs may make more sense. Again, one of the interesting things with your conversation with Preston.
[00:08:54] This is the episode with Preston Alexander, where we discuss in some detail the so-called float. When money is collected up front in premiums or PMPM, as long as you can keep those dollars before you have to pay anything, the more interest you can make on those dollars. I would have the money in my pocket already. That would be great. But we really make sure that the patient gets the right exam up front. There's savings associated with that.
[00:09:23] If I had somebody with a CT of the lumbar spine ordered Monday, you know, no, that needs to be an MRI. We go back to the referring physician. The pre-health process would just say, okay, this is in the yellow range with the ACR appropriateness protocol. We're just going to push it on through. It wouldn't switch the modality to the right study. Or, you know, a child who's having some assessment and they've ordered a CT. MRI is going to do the same thing without any radiation risk. And it comes down to that trust factor.
[00:09:52] But when you are ethically aligned with the employer, that fee-for-service works great, especially if it's not an excessive fee. It's an excessive fee. There you are. But when I can show 60% and now with one of the carriers, it's up to 90% because of vertical integration. You know, when I can show that kind of savings, fee-for-service makes all the sense in the world. The point Dr. Dickerson is making here, which is along the same lines of the point that I talked about John Quinn in the intro. I'm going to talk about this again.
[00:10:21] It's along the same lines as the point that John Quinn was making in the show from last week. Like, find a service or a care pod or subassembly, as he calls them, that in John's words, have clear boundaries. And then, like, if you can buy it cheaper for a geography, buy it cheaper. And I'm not the referring physician. That's the other piece of it. Yeah, this is a crazy good point. It's hard to drive excess volume. And driving excess volume is the perverse incentive of fee-for-service.
[00:10:51] But when you don't have the mechanism to drive up volume, you sort of mitigate that perverse incentive. If you're listening to this and you're trying to figure out when it's okay to pay for fee-for-service versus pay-for-value or pay-for-subscription or something, these are really key factors to consider. You know, if I were the referring physician, one of the reasons they're the stark laws is that referring physicians were going to get paid, even in hospital systems, for referrals.
[00:11:21] I'm not the referring physician. Somebody else has deemed this medically appropriate. And so that's the other reason is I'm not lining my pockets because I'm doing more of this than needs to be done. Dr. Tom Axley was on the, who was the founder of One Medical, and he talked a lot about enlightened leadership. And he actually put it out there as one of the most important aspects. If you're trying to balance mission and margin, having an enlightened leader and having dyad leadership is really, really important.
[00:11:48] So here you are with a solid commitment to doing the right thing, I think is what you're saying. In air quotes, value-based care has enough of its own perverse incentives. Then fee-for-service, it's not like it's one or the other. Maybe it's trying to maximize the good, but there's also a lesser of evil calculation involved here that, yeah, I think you're raising some very interesting points. And there's definitely a lot of contemplation and consideration.
[00:12:18] Yeah, and, you know, the other difference with fee-for-service is our agreements. I mean, our agreements are three-year agreements, but an employer can turn us off with plan design tomorrow. If they feel like we're not serving their member's purpose, they can shut us off any day. And so there's that ability that you might not have with other direct contracts. We're not exclusive, number one, and you can terminate at any time. Terminate whenever.
[00:12:45] That might be our third factor to consider when considering if fee-for-service or figuring out how to structure fee-for-service to make it the payment model of lesser evils, I guess. Consider if the service is simply cheaper than what might be available in the base network or elsewhere. I'm assuming comparable quality, like why not save money if you can save money? That's the first consideration. Second, can the vendor drive up their own volume or not? And is this auditable?
[00:13:14] Like, will you have the data to validate whether the care continues to be appropriate? Because, again, volume is the main perverse incentive of fee-for-service. And then third, getting locked into contracts is never good. But if a direct contract for a sub-assembly or a pod of care seems like it's less expensive and the vendor or the provider clinic is doing all of the promotion and engagement work themselves, I don't know. Why not?
[00:13:43] Okay, here's one reason why this might not work out. Hopefully, the plan sponsor did not sign some crazy anti-competitive network contract with an ASO that forbids them to carve out or steer a tier to high-value providers. Yeah. Well, and also, if anyone's so inclined, there's global appropriateness measures right now.
[00:14:04] So if somebody wanted to do some kind of global reporting and because you're giving them all of the data, they could be very self-empowered to do some analytics to determine whether there's anything inappropriate or whatever is going on. And, you know, and it's all relative with imaging, too, because when you come to secondary providers, which are more common in some of these cost containment health plan designs, you get more imaging and they need more help.
[00:14:30] I think that's where also subject matter experts, having clinicians. I've done some great panels with some tremendous providers in the ecosystem about having trusted clinicians in your health plan and subject matter experts in your health plan. And it's amazing how often I'm just consulting.
[00:14:49] I'm just answering an employer, a broker, head of HR's questions or physicians or physician extenders' questions about what to order, why, what do we do next? Well, it's also, I feel like you don't realize how important it is if you've never had it until someone experiences it and then you start realizing how vital it is. Dr. Cristin Dickerson, do you want to talk a little bit about green imaging and where someone can find out more information?
[00:15:19] Sure. Our website's a great resource, greenimaging.net. Dr. Kristen Dickerson, thank you so much for being on Relentless Health Value today. Always great to have a conversation with you. Hi, this is Tom Nash, editor and producer of the Relentless Health Value podcast. I bet you're wondering, how can I help Relentless Health Value? Well, that's pretty easy. Have you signed up for the newsletter? The newsletter is great. It tells you when each episode's coming out.
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