Direct Primary Care (DPC): A Health Care Revolution from Day’s Edge Productions on Vimeo.

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Like the Medicaid reform we proposed three years ago, Right to Shop realigns incentives for health care consumers by rewarding them for seeking out cost-effective care. In a Right-to-Shop state, patients would be able to receive a portion of the savings an insurer would realize if the patient went to a lower-cost provider rather than a higher-cost provider. Rather than reinforce the paradigm where the ever-increasing prices we pay for a service go straight toward driving up our respective premiums, Right to Shop shifts the paradigm by empowering consumers in the private market to save themselves—and their risk pools—money that can be used toward other life needs they might have. That means more money can go toward health care spending, but also toward rent, car payments, or whatever else a patient might need, health-related or not.

Here’s how Josh Archambault of the Foundation for Government Accountability, the chief proponents of the idea, explained the concept in Forbes last year:

Right To Shop empowers patients with the knowledge they need to make smart choices about how and where they consume health care. They’re given tools to find the best value providers and, when they choose those options, they get a share of the savings – in cash.

It’s so easy, even a caveman can use it.

“Caveman” is probably a good image here, given that health care shopping was stuck in the Stone Age for much of the last few decades. For most Americans, the price actually charged for our health care when we received it was less of a gripe than the price paid in deductibles, premiums, and copays throughout the year—even though they’re all inextricably connected.

Right to Shop takes us another step in a better policy direction, toward transparency in pricing, competition for our care, and gentle reform of the third-party payer system we’ve come to expect. If Missouri policymakers haven’t considered the idea yet, now would be a good time.

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Making health care more available and affordable requires attention not only to health insurance and care demand; it requires that we also take a hard look at provider supply, and try to find ways to expand the care opportunities available to patients that are currently obstructed, unnecessarily, by government.

Physician licensure reform is an important step toward that end. There are over 900,000 state-licensed physicians in the United States, and yet today only about 3% of those doctors can substantively see Missouri-based patients, thanks to the way our current physician licensure system works. The paper's argument is straightforward: if you are a medical doctor who is licensed and in good standing in your home state, Missouri should not be stopping you from practicing in our state and helping Missouri-based patients.

With the maldistribution of primary care physicians we see both nationally and at the state-level, there are many underserved communities in Missouri that would benefit from the opportunities of interstate licensure, especially in the telemedicine context. Importantly, rather than pursue a system like the Interstate Medical Licensure Compact promoted by many state medical boards, policymakers should look at the Nurse Licensure Compact as a guide to making care by a physician more available and affordable to Missouri patients.

The paper builds on our previous work with the direct primary care and Medicaid reform issues. 

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The good news is that such arrangements are arguably promoted under the Affordable Care Act; the bad news is that many states could try to regulate these practices as insurance providers when they’re clearly not. Missouri fixed that problem last year by protecting DPC medical retainer arrangements from such insurance regulation, and it appears it won’t be the last state implementing these reforms, either. Enter Wyoming, last month:

Wyoming Gov. Matt Mead (R) has signed into law Senate File 49, which will exempt direct primary care practices from state insurance code regulations….

Dr. Hal Scherz, founder of Docs4PatientCare, says Wyoming’s protection of direct primary care providers will help bring relief to a health care system that has grown unreasonably expensive for patients and physicians.

“We’ve got a huge problem here that’s brewing in our health care system, and what direct primary care does is a win-win for all—patients, doctors, the system itself,” said Scherz. 

Dr. Scherz is exactly right. Direct primary care offers patients and doctors the opportunity to establish stable care relationships without the burdens of insurance and with the transparency of clear pricing. Taken together, less insurance paperwork and more doctor competition means better prices for patients and the opportunity for American consumers to finally see the cost curve for health care bent downward.

Nationally, sixteen states have passed retainer agreement reforms like those passed in Missouri and Wyoming, so the movement still has a long way to go to clear the way for more robust DPC availability. That said, it’s a great start, and one that doctors, patients, and free marketeers can be excited about.

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You can find the Physician Foundation's study here. I have talked extensively about why DPC innovations are important not only for patients, but for doctors as well. Patients can generally expect to see cost and access improvements when they join a DPC program; meanwhile, doctors can generally expect to see lower costs and greater control over their practices. Indeed, for many doctors, moving to a DPC model offers them a way to remain in the field of primary care rather than be pushed out of it.

Expanding insurance—as Obamacare has attempted to do—fundamentally doesn't accommodate these cost, access, and professional control priorities. Instead, the Affordable Care Act doubles down on a broken status quo that ignores the system's effect on a host of important policy considerations, including the prices for care paid by patients and the supply of doctors serving the system. Gayle Brekke, a health insurance actuary writing for the Benjamin Rush Institute, captures the quandary well:

In the health care system, when a 3rd party (insurance company, government) is paying the bill from the first dollar of coverage, patients (consumers) do not have an incentive to shop for value. They are not spending their own money at the point of service. In fact, patients often feel like they pay high insurance premiums so they want to consume more health care in order to feel like they are getting value from their insurance coverage.

Until the health care industry grapples with its longstanding cost and, relatedly, access problems, patients will continue to be let down by the system and primary care doctors will continue to get squeezed by it.

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But the difference between concierge and direct primary care isn't just academic; the terms also appear to be related to the price of the services rendered by these nontraditional physician practices. According to a study by Phillip Eskew and Kathleen Klink published this month in the Journal of the American Board of Family Medicine, practices that simply self-describe as a concierge service are more than twice as expensive as direct primary care on a monthly basis.

We found the public perception of the term concierge as having higher prices holds true. Self-described DPC practices charged a lower average monthly fee ($77.38) than DPC practices that self-described as concierge ($182.76). Concierge practices such as MDVIP and MD² have listed average periodic (monthly) fees of $137.50 and $2083.33, respectively; these periodic fees are billed in addition to standard fee-for-service office visit and procedural charges that would be encountered in any traditional medical practice.

In other words, while they sometimes use these terms interchangeably (and for understandable reasons given their similarities), both doctors and patients should be mindful that these models differ in very important ways, and that pricing is perhaps the most important difference. Making that fact clear is especially important for patients seeking cost-effective treatment plans with direct primary care physicians—because in the process of trying to find one, they could balk at the price tag they might find if they're only looking at "concierge" practices.

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But before you do, I’d like to highlight one quote from the story that is among the better explanations of the principles of not only DPC practices, but of substantive health care reform in general.

“The classic analogy of direct primary care is auto insurance,” said Dr. Shelby Smith, who will open Equality Healthcare with two fellow doctors in December. “Everybody needs auto insurance for a car wreck. You don’t use auto insurance for a car wash, or an oil change or new tires. Sort of what we’re doing in the primary care realm is saying that primary care in this country should be accessible, it should be affordable and the pricing should be very transparent.”

Bingo. Dr. Smith’s focus on access and the cost of care is not only what DPC practices are largely all about, but they are also what the focus of our public policy should be. “Coverage” is not care, and until policymakers more readily recognize this fact at the state and federal levels, we should not expect insurance rates to stop rising or insurance plans to stop failing en masse. DPC offers a blueprint for health care policy progress; hopefully lawmakers will study it closely.

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Along with explaining what direct primary care is and the advantages it may offer patients and doctors alike, the paper also walks through many of the problems of the ACA and outlines why those problems need to be addressed sooner, not later, if health care in this country is going to improve over the long haul. We'll have more on the contents of the paper in the days ahead.

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Removing barriers to care should be a priority over simply guaranteeing Americans “coverage,” which is the focus of Obamacare. The problem with prioritizing mere coverage over actual care is that in many cases being “covered” only provides the illusion of protection, like many Medicaid beneficiaries have found, and not much else.

If the doctor won’t see me, what good is any “coverage” I might have?

That’s where direct care agreements come in. Here, the care is contracted directly with a doctor, cutting out the middleman insurer whose networks may not actually fit my care needs. Can health insurance supplement direct care arrangements? Sure, but the arrangement itself is not insurance. And that’s what HB 769 reaffirms—that direct pay arrangements are care, not just coverage.

Kudos to the general assembly.

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• HB 769 makes “medical retainer agreements” exempt from regulation by the state’s Department of Insurance. MRAs are direct-pay arrangements—where a patient and a doctor contract directly for care. Such contracts are not a matter of insurance, but in other states there have been pushes to regulate them under the “insurance” umbrella. HB 769 would preempt such a move.
• HB 985 enhances Missouri’s Medicaid eligibility verification system by leveraging the resources of a third party. Over the past year MO HealthNet has been hit by a series of embarrassing reports of waste and mismanagement. Suffice it to say, money wasted is money that cannot go to the poor beneficiaries who need it most. HB 985 tries to tackle the problem of waste on the enrollment side by trying to make sure those limited dollars flow to beneficiaries who, in fact, qualify for them.
• HB 319 expands on an existing state law dealing with MO HealthNet telemonitoring services, also known as telemedicine. Telemedicine allows medical professionals to diagnose medical problems remotely, which for people in medically underserved communities is a great technological innovation and benefit. Section 208.670.1 of current law already allows for reimbursements for telehealth “in the same way as reimbursement for in-person contacts”; HB 319 pushes MO HealthNet to further adopt and advance telemedicine practices.

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These may sound like philosophical questions, but the answers have very real consequences, as this story in the New York Times shows.

Alison Chavez, 36, who is self-employed, signed up for a marketplace plan in October 2013 that she hoped would be an improvement on her previous plan. She had recently been given a diagnosis of breast cancer and was just beginning therapy, so she was careful to choose a policy on the Covered California marketplace that included her physicians.

But in March, while in the middle of treatment, she was notified that several of her doctors and the hospital were leaving the plan’s network. She was forced to postpone a surgery as she scrambled to buy a new commercial policy that included her doctors. “I’ve been through hell and back, but I came out alive and kicking (just broke),” she wrote in an email.

Obamacare tries to treat the symptoms of a sick American health care system—the rising cost of insurance—but it doesn’t really treat the underlying sickness, the rising cost of care. And that’s ultimately what we expect when we “have health care”: care. It’s just not necessarily what people receive under the ACA.

In that context, it’s understandable that many Americans are looking for alternative care models that meet their needs, not the needs of a government bureaucrat. The “direct care” model is one of the most promising. The direct care model is simple; for a set fee, patients and doctors can contract for health care services. These care “subscriptions” guarantee access to a doctor of the patient’s choosing, oftentimes because the doctor is limiting the number of total patients he or she will take over that period. Instead of paying for insurance and getting poor care or no care at all, patients pay for care and receive . . . care. Imagine that.

An article published in Time Magazine late last year sums up what makes direct care arrangements attractive.

The driving insight here is that primary care and specialized care have two very different missions. Americans need more of the first so they’ll need less of the second. And each requires a different business model. Primary care should be paid for directly, because that’s the easiest and most efficient way to purchase a service that everyone should be buying and using. By contrast, specialty care and hospitalizations—which would be covered by traditional insurance–are expenses we all prefer to avoid. Car insurance doesn’t cover oil changes, and homeowners’ insurance doesn’t cover house paint. So why should insurance pay for your annual checkup or your kid’s strep swab? [Emphasis mine]

You can think of it as “a la carte care” or “concierge care,” or something else, but it is indisputably care—care that the patient has chosen and can actually access. The potential for direct care extends even to more specialized care, too. At the Surgery Center of Oklahoma (SCO), the surgeons post the prices of their services online, with prices oftentimes a fraction of what other hospitals and insurance companies charge patients. This 2012 video from Reason TV explains the lower-cost, and arguably more personal, SCO model.

It is no wonder several proposals now floating around the Missouri Legislature aim not only to protect direct care arrangements, but also to facilitate them. One proposal would insulate direct care arrangements from undue bureaucratic interference; another would initiate a pilot program to make direct care available to the poor. Both are well worth the consideration of Missouri legislators, especially before the legislature’s session comes to a close next month.

Direct care has the potential to help patients like Alison find and keep the doctors they want—and not have that relationship jeopardized by some middleman insurance relationship. Amidst all the problems of America’s post-Obamacare medical system, direct care represents a bright shining possibility for a better model for our health care: one that puts the patient first, not the government.

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