Direct Primary Care Expansion in Texas Would Create Affordable and Accessible Care for Those on Medicaid

Published March 26, 2021

Direct Primary Care (DPC) is sweeping the nation. Currently, 32 states have passed DPC laws and 12 states have pending legislation. Texas has laws on the books that defines DPC differently than typical health insurance. Yet, the need to make health care affordable and accessible to all is at the heart of the health care debate, and DPC is a viable way to achieve this notable goal.

According to the Texas Public Policy Foundation, DPC practices provide services to approximately 600 to 800 patients. This is far less than the upwards of 2,000 patients a typical physician provides services to. One of the major benefits of DPC is that it allows for more time to be spent with patients, and less time on paperwork. DPC is an affordable alternative to third party insurance because it cuts out the middleman. DPC offers better care to families with more frequent visits and longer visit times, resulting in improved health outcomes.

Unfortunately, not all patients have access to DPC. For example, Medicaid recipients cannot engage in DPC agreements. This is a problem given the sheer growth in Medicaid over the past few years. From 2013 to 2018, the number of Medicaid enrollees increased by nearly 28 percent, to more than 67 million. In 2017, the cost of Medicaid reached $581.9 billion, accounting for 17 percent of total health care spending nationwide. What’s more, there is evidence Medicaid costs will continue to increase. According to a recent report from the Centers for Medicare and Medicaid Services, Medicaid expenditures are expected to rise at an average annual rate of 5.7 percent from 2017 to 2027, a rate that far exceeds annual U.S. GDP.

Legislators in Texas are looking to expand DPC agreements and allow Medicaid patients to opt into DPC agreements. The pilot program that has been proposed would cover basic health care services and could be a much better option for many Medicaid patients.

Moreover, several states with large rural populations are struggling to retain direct primary care physicians, and Texas is no exception. Expanding DPC could help rectify this problem. 

According to a report by United Health Group, 13 percent of Americans live in a county with a shortage of primary care physicians. The demand for physicians is outpacing the supply according to the Association of American Medical Colleges.  Unfortunately, this problem is going to get worse before it gets better, unless policy is put in place to address the physician shortage.

The potential cost savings DPC could bring to Medicaid spending is substantial as well. DPC lowers health care costs nearly 40 percent annually, according to the Docs4Patient Care Foundation.  Similarly, a study in The American Journal of Managed Care found DPC patients are 52 percent less likely to use services at an expensive hospital than at a traditional private practice.

Texas legislators should make it a priority to expand DPC programs to create affordable and accessible care for all. Increasing health care costs are inevitable and are linked to overregulation, rising drug prices, and new enrollees needing more medical care than anticipated.

Future policy decisions should promote patient centered care, and DPC is a commonsense solution that does just that. Today, there are 1,200 DPC practices in 48 states, providing care to more than 300,000 Americans. Increasing primary care access is the future of health care, and Texas ought to be a leader in DPC innovation.

The following documents examine direct primary care in greater detail.

Policy Diagnosis: Seize the Moment to Reform State Health Care Laws  
In this interview, Michael Hamilton asked Dr. Hal Scherz, board secretary for the Docs4PatientCare Foundation, how the Trump administration is changing the health care regulatory environment and what actions lawmakers should take to improve health care.

Don’t Wait for Congress to Fix Health Care
Heartland Institute Senior Policy Analyst Matthew Glans documents the failure of Medicaid to deliver quality care to the nation’s poor and disabled even as it drives health care spending to unsustainable heights. Glans argues states can follow the successful examples of Florida and Rhode Island to reform their Medicaid programs, or submit even more ambitious requests for waivers to the Department of Health and Human Services, a suggestion the Trump administration has encouraged.

Research & Commentary: Ten Health Care Reform Options for States–commentary-10-health-care-reform-options-for-states  
Heartland Institute Senior Policy Analyst Matthew Glans outlines 10 steps state legislators should take to improve the cost and availability of health care in their states.

Direct Primary Care: An Innovative Alternative to Conventional Health Insurance
Insurance-based primary care has grown increasingly complex, inefficient, and restrictive, driving frustrated physicians and patients to seek alternatives. Direct primary care is a rapidly growing form of health care which alleviates such frustrations and offers increased access and improved care at an affordable cost. State and federal policymakers can improve access to direct primary care by removing prohibitive laws and enacting laws encouraging this innovative model to flourish. As restrictions are lifted and awareness expands, direct primary care will likely continue to proliferate as a valuable and viable component of the health care system.

Direct Primary Care: Practice Distribution and Cost Across the Nation
Philip M. Eskew and Kathleen Klink describe the direct primary care (DPC) model; identify DPC practices across the United States; distinguish it from other practice arrangements, such as the “concierge” practice; and evaluate data compiled from existing DPC practices across the United States to determine the cost advantages associated with this model. Eskew and Klink confirmed DPC practices’ lower price points and broad distribution, but data about quality are lacking.

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

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