The excessive amount of government intervention that has encumbered our nation’s health care system is pushing some physicians to scale back or cut off their relationships with middleman insurers to spend more time with their patients.
This innovative business model is known as direct primary care (DPC). In exchange for a monthly fee that covers a defined package of services, patients have guaranteed unlimited access to their physicians. DPC is similar to concierge medicine, but the key difference is that these practices deliver basic health care at an affordable price with no insurance billing whatsoever.
DPC has been around for years, but it’s currently a niche market. Even so, it continues to pique physicians’ interest. As of 2014, over 4,400 doctors in the U.S. had transitioned to direct health care delivery, a significant increase from just 146 in 2005. Currently, around 30 doctors in North Carolina practice in a DPC setting.
DPC restores the incredible value of personalized medicine, benefiting patients, doctors, employers, and the state.
- Because primary care is relatively inexpensive to administer, DPC is an appealing option. Industry-wide data show that average monthly memberships vary from $25 to $85. In return, patients are entitled to around-the-clock care that may include services such as comprehensive annual physicals, EKG testing, joint injections, laceration repairs, and skin biopsies. North Carolina practices can even dispense prescription drugs in-house at wholesale cost.
- DPC restores the traditional doctor-patient relationship. Imagine physician practices that do not have to spend over 40 percent of practice revenue on overhead costs and personnel responsible for filing insurance claims. Opting out of insurance contracts allows smaller practices to break even on as little as four patients per day, rather than an average 32 in today’s typical practice setting.
- A study conducted by University of North Carolina and North Carolina State University researchers found that patients seeking treatment from Access Healthcare, a direct care practice located in Apex, North Carolina, spent 85 percent less and enjoyed an average of 35 minutes per visit compared to eight minutes in a nondirect care practice setting.
- Fortunately, North Carolina ranks as one of the top DPC-friendly states. Unlike other state legislatures, ours does not subject these practices to government price controls, capped patient numbers, limited treatments, or a defined menu of services.
- Since DPC practices do not accept insurance, some question how physicians can still thrive under Obamacare’s insurance mandates. Interestingly, section 10104 of the federal health law endorses DPC as long as it is accompanied by catastrophic health coverage that includes benefits outside of primary care. So, if patients purchase a wraparound plan and seek care through a DPC practice, this theoretically fulfills the individual mandate.
- Since Obamacare’s individual mandate requires everyone to purchase health insurance that includes preventative health care services, many perceive that direct care patients are paying twice for health care. But Americans with insurance are already committing to two payments for health care – monthly premiums in addition to copays and co-insurance. Direct care offers treatments for patients at lower out-of-pocket costs compared to insurance plan out-of-pocket expenses.
- While a majority of direct care takes place in small practice settings, there are DPC establishments that specialize in contracting with large self-insured employers. In North Carolina, Union County is on track to save $1 million in health care claims under its first-year contract with Paladina Health — a large-scale DPC franchise.
- Since Union County has incorporated an additional benefit option for workers to have a doctor spend more time managing their health care needs in either an on-site or near-site clinic, there has been a significant reduction in unnecessary emergency room visits, specialist referrals, and inpatient admissions.
- Another large DPC company is Qliance. Located in Seattle, Washington, Qliance’s clients include Amazon and Expedia, Inc. A review of two years of health care claims data reveals that workers who opted to be treated by Qliance saved their employers 20 percent on health care expenses compared to employees who chose a different provider. The table on the following page illustrates that an increase in direct care visits led to a reduction in specialist referrals, emergency room visits, and surgery.
- For the DPC model to cater to Medicaid patients, the North Carolina Department of Health and Human Services (NCDHHS) could work within a federal waiver to administer and monitor health savings accounts (HSAs) or debit cards with a lump-sum contribution to eligible enrollees.
- Implement a DPC benefit option for State Health Plan members.
- Policymakers should pass legislation that simply states that direct care providers do not act as a risk-bearing entity, so that patients’ monthly DPC membership fees are not classified as an insurance premium. To date, 13 states have enacted legislation that specifically defines DPC not acting as insurance. This would protect DPC providers from Department of Insurance regulations.