The excessive amount of health care regulation that deteriorates the physician-patient relationship is pushing some doctors to opt out of insurance contracts so they can spend more time with their patients.
This practice model is known as direct primary care (DPC). In exchange for a monthly fee, patients can see their DPC doctor for all of their primary care needs. 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.
While DPC is a niche market, it’s experiencing considerable growth. As of 2014, over 4,400 doctors in the U.S. had transitioned to direct health care, a significant increase from just 146 in 2005. More than 30 doctors in North Carolina practice DPC.
- DPC is an appealing health care option for patients because it is price-transparent and affordable. Industry-wide data show that the average monthly membership is $75. In return, patients have quicker access to primary care 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 addresses physician burnout in many ways. Because DPC doctors are no longer subject to insurance companies’ complex billing codes and prior authorizations, they can be creative in how they care for their patients. They also don’t have to spend 40 percent of practice revenue on personnel who are responsible for filing insurance claims. Removing insurance costs and keeping a low overhead helps DPC practices break even on as little as four patient visits per day. In traditional practice settings, primary care physicians see as many as 32 patients per day to stay afloat financially.
- 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 on total health care spending and enjoyed an average of 35 minutes per visit compared to eight minutes in a nondirect-care practice setting.
- Because the Affordable Care Act requires most health plans to cover primary care services, many perceive that patients who pay for direct care memberships in addition to health insurance are paying twice for health care. But Americans with insurance are already committing to multiple payments for health care – monthly premiums in addition to co-pays and co-insurance. Direct care offers treatment for patients at lower out-of-pocket prices compared to an insurance plan’s out-of-pocket expenses.
- While most direct care takes place in small-practice settings, there are DPC companies that specialize in contracting with large self-insured employers. In North Carolina, Union County saved over $1.2 million in medical and prescription drug claims under its first-year contract with Paladina Health — a DPC-like 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.
- For the DPC model to work for 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, 23 states have enacted legislation that specifically defines DPC as not acting as insurance. This would protect DPC providers from Department of Insurance regulations and keep costs low for patients.