Direct primary care (DPC) will end up playing a more prominent role on the national stage of conservative health reform. The Wall Street Journal considers this patient-centered delivery model the “fourth leg” to any plan that would replace Obamacare. Lawmakers in Congress and others in the consumer-driven health care scene strongly endorse DPC because it drives patients to pull more price transparency out of the very opaque U.S. health care system. And price transparency frequently comes with falling prices. DPC works like a health care gym membership. In exchange for a membership fee (the industry average monthly payment ranges from $25 to $85), patients have access to around-the-clock primary health care.
They can schedule same-day appointments and longer office visits with their doctors as needed. A major reason why monthly fees are affordable for the masses is because DPC practices have low overhead expenses since they do not accept insurance. For a more in-depth explanation on DPC, read here. Health and Human Services (still yet to be appointed) Secretary Tom Price’s health care plan calls for expanding the presence of DPC by broadening the use of health savings accounts (HSAs) – accounts that can pay for medical expenses with pre-tax dollars. In his proposal, he specifies that patients can pay their DPC membership fees out of their HSA. For this to succeed, the tax code needs to be amended so that the IRS considers DPC fees to be a “qualified medical expense.”
This policy change, combined with the fact that Price encourages patients on Medicare, Medicaid, and other government programs to become HSA holders, gives DPC a broader appeal for providers and patients alike. It’s not just Price’s “Empowering Patients First Act” that recognizes DPC. The Primary Care Enhancement Act of 2017 along with the Health Savings Account Expansion Act also advocate for DPC fees to be paid for with an HSA. Either of these stand-alone bills can legalize such purchases if a tax code tweak doesn’t make it into a final health reform package.
It’s nice to see that the health care authors in Washington are eager to use HSAs as a vehicle to further incorporate a concept that has already proven to work in many “laboratories of democracy” across the United States. States are also testing DPC in other ways, too.
Washington State is deservedly recognized as the birthplace and one of the most prominent frontiers for DPC, in large part because of Qliance. The Seattle-based DPC conglomerate is recognized as an exemplary market force in the private sector of health care. Major investors such as Amazon CEO Jeff Bezos have propelled Qliance to secure contracts with large employers ranging from Comcast to the Seattle Fire Fighters Union. To date, Qliance provides care to more than 25,000 patients. In line with DPC’s mission of spending more time with patients and less time on administrative demands imposed by third-party payers, Qliance patients are less likely to need costly “downstream” care; resulting in 65 percent fewer ER visits, 66 percent fewer specialist visits, and 82 percent fewer surgeries than those with traditional insurance. Overall patient health outcomes and cost savings ($864 per person per year) have prompted unprecedented growth.
Much like Qliance was the first mover in the private sector of DPC, Washington was the first state to enforce public policy on such medical practices. They’ve passed a number of laws relating to DPC. Additionally, Washington has gotten creative about incorporating DPC on its Obamacare Exchange. Coupling a DPC membership with a “catastrophic” insurance plan (as outlined by the federal government) can save patients nearly $4,000 per year in comparison to purchasing a benefit-rich policy.
Michigan is another state which has embraced DPC with open arms. A 2015 resolution proposed by State Senator Patrick Colbeck uses DPC to address explosive Medicaid costs and improve health care access for Medicaid patients. [Colbeck policy briefs]. A state-funded pilot program would allow for 2,400 Medicaid patients to be enrolled in DPC. If implemented statewide, this model is projected to save taxpayers $3.5 billion annually – a six percent budgetary savings. Colbeck further notes these savings could “translate to lower tax burdens, more school funding, more road funding and more economic growth.”
North Carolina thrives in medical innovation and is home to more than thirty DPC physicians. In 2015, Union County expanded its health benefits to include a DPC benefit option for its workers. Partnering with a large-scale direct care company helped the public employer save over $1.28 million in health care claims in just one year. That savings amounts to $260 per employee per month when comparing total medical and prescription claims incurred by employees who subscribe only to Union County’s traditional health plan versus just 44 percent who chose a DPC physician to treat their primary care needs. The direct care organization’s mission to provide immediate access with no co-pays suggests that chronically ill patients find DPC to be a valuable asset in effectively managing their complex health care needs: According to data from Union County:
- 59 percent of DPC members have at least one chronic illness, while 35 percent are diagnosed with multiple.
- Of the 55 percent of Union County DPC enrollees who have moderate to severe chronic conditions, over 90 percent are heavily engaged with their health care. Patients with more than three chronic conditions averaged more than five visits in one year, while those with more than one averaged over three visits.
- DPC enrollees with more than one chronic condition cost on average 28 percent less than those enrolled in Union County’s traditional insurance plan.
Patients all over the country are experiencing better access and lower costs using DPC. While expanding HSAs to steer more patients to this health care delivery model is an important “demand side” reform to our nation’s health care system, lawmakers can further optimize DPC by enforcing the following “supply side” health reforms: deregulating health insurance carriers to offer plans that fit consumer preferences, having the federal government supply funds for states to administer high-risk pools to assist those with pre-existing health conditions, and refundable tax-credits to ensure access to basic coverage. Read full article: www.forbes.com Learn more about direct primary care and what it can do for you.