DOCTORS EXIT THIRD-PARTY-PAYER MODEL FOR DIRECT PRIMARY CARE

This is a great article published by the Heartland Institute.  I had the pleasure of both attending and speaking at the conference to which Mr. Glans is referring.  I had the honor of meeting him as well.

Michael A. Ciampi, M.D.


DOCTORS EXIT THIRD-PARTY-PAYER MODEL FOR DIRECT PRIMARY CARE

NOVEMBER 29, 2016

More physicians are charting their course out of the insured patient market.

Many doctors are abandoning the traditional third-party-payer business model and instead adopting a direct primary care (DPC) model, and more than 260 physicians from 42 states recently rallied in Irving, Texas for two days to discuss why.

A conference titled “Direct Primary Care: Nuts and Bolts to 2.0” attracted physicians who primarily bill patients’ insurance carriers, Medicare, or Medicaid and are considering converting their practices into DPC practices. Attendees heard from and asked questions of current DPC providers, whose patients pay them directly instead of through third parties.

DPC patients pay monthly membership fees ranging from $35 to $150 per person in exchange for preventive care services, unlimited medical advice by e-mail and text, at least a dozen office visits per year, and certain tests and procedures.

The Docs4PatientCare Foundation hosted the conference in conjunction with the Texas Medical Association and the Physicians Foundation on October 14 and 15 at the Irving Convention Center and Omni Mandalay Hotel.

Health Care Prices ‘Artificial’

The artificial nature of medical pricing in the third-party-payer system drew ire throughout the conference.

Dr. Lee Gross, board president of Docs4PatientCare Foundation, displayed a medical bill one of his patients received from a Florida hospital for $19,723.27 for services billed through insurance. Gross showed the bill next to a price menu at Epiphany Health Direct Primary Care, Gross’ DPC clinic in North Port, Florida. Epiphany provides the same services for an up-front cash price of $278.79.

“All prices in medicine are a joke,” said Dr. Chad Savage, a DPC provider in Brighton, Michigan, during a panel on October 14. “They’re all artificial.”

‘Do No Financial Harm’

Dr. Josh Umbehr, a DPC provider in Wichita, Kansas and co-creator of Atlas.md, an electronic health records platform built specifically to enhance DPC, says physicians are obligated to charge patients honest prices.

“If we really take our oath seriously when we say, ‘Do no harm,’ that includes, ‘Do no financial harm,’” Umbehr said during the          panel.

Instead of marking up the cost of each service, doctors might try marking them down, Umbehr says.

“An EKG costs me 36 cents in the office,” Umbehr said. “I could charge $1 and get a 200 percent profit, or I could give it away for free.”

In the DPC model, Umbehr can afford to increase his value to patients by providing high-quality care less expensively than in a third-party-payer system.

“When a patient asks what his wife’s procedure is going to cost, and I tell him, ‘I’m sorry, did we not explain that it’s free?’ … [T]hat patient will go out and tell more people about his wife’s free surgery than I could,” Umbehr said. “That’s how you add value to service.”

Umbehr says doctors should compete to provide patients the best care at the best value, which he says should be measured by whether the patient returns as a consumer.

Neither Insurance nor Concierge

Speaking at the DPC conference in Irving, David Goldhill, CEO of the Game Show Network and author of Catastrophic Care: Why Everything We Think We Know about Health Care Is Wrong, distinguished DPC’s ease of use from the mainstream insurance model.

Goldhill says insurers complicate health care for patients and providers.

“There is no harder work than being a beneficiary of health insurance,” Goldhill said during his keynote lunch address on October 14.

DPC is often compared to concierge medicine, a model in which patients pay doctors $1,500 to $5,000 per year for continuous access. Concierge doctors typically bill patients’ insurers in addition to charging the patient an access fee, unlike DPC providers, who bill patients directly and charge less.

Savage says DPC stops insurers and government from interfering with doctor-patient relationships.

“Concierge charges more to give you great care,” Savage said during a question-and-answer session. “DPC cuts out the bureaucracy to give you great care.”

Policy Obstacles

Ambiguity in state laws deters potential DPC providers from entering a state’s health care market, according to Gross and Dr. Phil Eskew, founder of the advocacy website DPC Frontier. Eskew led the breakout session on “Legal Challenges for the Start-Up Direct Primary Care Practice” at the conference.

An important obstacle to providers opening DPC clinics is the risk state officials will classify DPC as an insurance product, which would place DPC doctors under the same regulatory and licensing system as insurers.

Lawmakers in 14 states have passed legislation specifying direct primary agreements do not constitute insurance. Arkansas, Oregon, and West Virginia do not adequately distinguish DPC from insurance or concierge, and 34 states, including the District of Columbia, lack any DPC legislation, according to a map at DPCFrontier.com.

Matthew Glans (mglans@heartland.orgis a senior policy analyst at The Heartland Institute.\

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