The sponsor of a two-page bill offered to protect direct primary care providers in Georgia says the legislation would lead to better health care and reduced out-of-pocket expenses for patients.
Sen. Judson Hill (R-Marietta), the chairman of the Georgia Senate Finance Committee, has introduced the Physician Direct Pay Act (Senate Bill 265) to make clear agreements physicians make directly with patients are not a form of health care insurance. The bill would “exempt such agreements from regulation as insurance,” according to the bill’s text.
Georgia has nine direct primary care providers, as shown on a map at DPCFrontier.com. Direct primary care allows patients to pay a flat monthly rate directly to their doctors’ offices in exchange for a guaranteed suite of services. These rates are often substantially lower than an insurance premium. Physicians typically negotiate discounted services with specialists and freestanding clinics.
Direct pay arrangements bypass insurance companies, but the patient is free to obtain any additional health insurance coverage they would like. Many choose to purchase catastrophic insurance to cover certain hospital visits and other services excluded from the agreements.
Threat of State Interference
Unless Georgia lawmakers pass the bill, state officials could rule direct primary care arrangements “qualify as insurance, and they would be selling insurance unlawfully,” said Kelly McCutchen, president of the Georgia Public Policy Foundation. The Physician Direct Pay Act would give direct care providers “some better clarity than the whims of an insurance commissioner,” McCutchen said.
McCutchen says equating direct care with insurance could subject the program to regulations that defeat the purpose of the relationship.
“The real advantage of this is that the physicians don’t need additional staff, because they’re not filing claims,” McCutchen said. “They can reduce their administrative costs … [and] get health care back to where it used to be—people paying out of pocket for their primary care. That was never supposed to be covered by insurance.”
Dr. Hal Scherz, founder of Docs 4 Patient Care, says direct primary care is “a throwback to 1930 [and] 1940, when doctors and patients had direct-pay relationships.”
Direct Care, Direct Savings
Direct-pay relationships could mean big budget savings for states, Scherz says.
Widespread direct primary care would reduce Georgia’s Medicaid budget by increasing the number of participating physicians and reducing trips to the hospital, “which is the single most expensive point of care in the health care system,” Scherz said.
Scherz says Docs 4 Patient Care co-founder Dr. Lee Gross observed this price disparity when one of his direct care patients went to a hospital for routine abdominal pain.
“For that diagnosis, it wound up costing him close to $20,000 at the hospital, and Lee could have done it for $298,” Scherz said.
Medicaid Cost-Cutting Potential
Dr. Erika Bliss, a direct primary care provider in Seattle, told National Public Radio on January 13 her patients cost Medicaid an estimated 15 to 20 percent less than traditional patients.
For less than the cost of Medicaid, direct care can “guarantee [patients] a regular doctor, circumvent the fractured care that they’ve received in emergency rooms and urgent care centers, get them their medications on a regular basis, improve their outcomes, and in the long run save them a heck of a lot more money,” Scherz said.
The direct care model also gives patients access to more individual time with a doctor, Scherz says. The average primary care physician’s total number of patients, or “panel,” is 2,300, but “doctors who do direct primary care are limiting their panels to 700 to 1,000 patients, and they’re spending 45 minutes to an hour with every patient,” Scherz said.
“By allowing doctors to give care in a private setting, in a direct primary care practice, everybody wins, especially the patients,” Scherz said.
Ben Johnson ([email protected]) writes from Stockport, Ohio.
Patrick Ishmael, “Where Obamacare Leaves Questions, Direct Primary Care May Offer Answers,” Show-Me Institute, October 2015: https://heartland.org/policy-documents/where-obamacare-leaves-questions-direct-primary-care-may-offer-answers
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