Research & Commentary: Missouri Should Expand Direct Primary Access to Medicaid Patients

Published November 20, 2017

In 2016, Missouri’s lawmakers made crucial reforms to allow physicians in the Show-Me State to practice an innovative health care delivery model known as direct primary care (DPC). Now, a Missouri lawmaker wants to expand direct primary care to poor and vulnerable patients enrolled in Medicaid.

In early October, state Rep. Steve Helms (R-Jefferson City) introduced draft legislation to launch a pilot program that would allow Medicaid enrollees in Greene and Christian Counties to contract with physicians who practice direct primary care. Under this approach, a physician opts out of billing an insurer and instead charges a flat monthly payment for primary care services. If passed, Helm’s proposal would pay physicians in these localities $70 per month to care for Medicaid patients.

“Direct primary care is an opportunity to help us bend down the real cost of healthcare and reset the doctor-patient relationship to deliver superior, personalized care,” said Helms.

Patients on Medicaid need these changes now more than ever. As the program’s costs have exploded, Medicaid routinely cuts payments to doctors to control spending. As a result, one in three Missouri physicians now refuse to treat new Medicaid patients. This has made it harder for Medicaid patients, who statistically have higher rates of medical complications, to access essential services.

Shifting Medicaid’s primary care delivery to a DPC system would curb the program’s rising costs and improve the financial state of doctors. Surveys find almost half of doctors spend one- third of their day on data entry and other administrative tasks required to bill insurers. In addition, physicians spend more than half of every patient’s visit inputting data into a computer.

By removing fee-for-service billing out of primary care, private practices can save as much as 40 percent on their operating costs and pass those savings onto patients by offering low membership fees.

Direct primary care also benefits patients by improving overall health outcomes. Since DPC doctors only receive a fixed payment from their patients, they have a financial stake in providing the most cost-effective care.  A five-year study in the American Journal of Managed Care found Medicare patients who visit DPC doctors are 52 percent less likely to be hospitalized. The analysis concluded “elective, non-elective, emergent, urgent, avoidable, and unavoidable admissions were all lower in the [DPC] members compared with nonmembers for each year.”

Jim Blaine, a practicing physician and the director of the Green County Medical Society, supports Helm’s proposal to shift Medicaid enrollees into DPC’s more patient-centered system. 

“The DPC model would be a great solution by providing access to care from a caring physician, thereby decreasing interval emergency room visits and saving resources for the taxpayers,” said Blaine.

Missouri lawmakers can learn from North Carolina about how direct primary care yields dividends for taxpayers. Starting in 2015, Union County partnered with Paladina Health, a network of DPC practices, to provide affordable preventive care to public employees. After just one year, these providers help the county save $1.28 million, resulting in a savings of $260 per employee per month, according to the John Locke Foundation.

DPC generates the most savings by successfully treating high-cost patients outside of fee-for-service practices. The same study found workers who opted into DPC with at least one chronic illness ended up costing Union County 28 percent less than those who stayed with the county’s fee-for-service physicians.

Medicaid needs DPC now more than ever. After years of delivering poor outcomes at increasing costs, Missouri should allow Medicaid enrollees to access quality health care at a price Missouri taxpayers can afford.

The following documents examine direct primary care in greater detail.


Where Obamacare Leaves Questions, Direct Primary Care May Offer Answers
This report by Patrick Ismail of the Show-Me Institute outlines how the Affordable Care Act (ACA) failed to lower costs or expand health care access and explores how direct primary care can deliver on the broken promises of the ACA.

Direct Primary Care: Saving Doctors from Burnout           Katherine Restrepo writes about direct primary care and how it can help save doctors from burnout in this article in Forbes. “Doctors are happier once they realize that they can keep health care simple. There is actually a way to practice medicine without the government or administration walking into the exam room with the patient. This is what makes direct primary care a successful practice model,” wrote Restrepo.

These Doctors Got Fed Up With Insurance. Now They Treat Their Patients Like Valued Customers 
In this article in Reason, Mark McDaniel shows a growing number of doctors are practicing direct primary care, as increasingly complex medical records, billing codes, and prior authorizations threaten the doctor-patient relationship. “Today there’s a small but growing movement of doctors who are opting out of the traditional health care system by no longer accepting insurance. This new approach is called ‘direct primary care,‘ but it’s essentially a throwback to an era before insurance companies were responsible for covering routine services like ear infections or strep cultures,” wrote McDaniel.

Policy Diagnosis: Seize the Moment to Reform State Health Care Laws
In this interview, Health Care News Managing Editor 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.

Research & Commentary: Ten Health Care Reform Options for States–commentary-10-health-care-reform-options-for-states
In this Research & Commentary, 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.

Where Obamacare Leaves Questions, Direct Primary Care May Offer Answers
Proponents of the Affordable Care Act (ACA) set out to remake American health care with the law’s passage in 2010, but in many respects the ACA didn’t change the health care paradigm at all; it simply doubled-down on a broken, decades-old status quo making health “coverage” a national priority, rather than focusing on limiting health care costs and enhancing health care access. Patrick Ishmael of the Show-Me Institute explores in this essay a promising medical practice model, direct primary care, which he says could deliver on the promises made by proponents of the ACA to lower costs and improve access to quality health care.

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.

Direct Primary Care: A Legal and Regulatory Review of an Emerging Practice Model
Philip M. Eskew examines concerns related to the “business of insurance” (BOI) encountered by DPC physicians. He analyzes recommended contractual provisions used to minimize BOI risk; compares state laws written chiefly to address risks related to BOI; considers the DPC provisions in the Affordable Care Act; and briefly considers the tax and scope-of-practice policy implications of the DPC model.

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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