Wisconsin lawmakers are moving to allow doctors to treat patients on a subscription basis known as Direct Primary Care (DPC). States must define that relationship as one of a provider and patient, rather than an Insurer and customer. Wisconsin is poised to join more than thirty other states in this trend to improve access to higher quality care at a lower cost to patients.
The most important role a legislator is to protect constituents. Any changes in how care is delivered needs to address this first. DPC has been tested in more than thirty states and has been developed to work within the Affordable Care Act (ACA) and state law to allow greater access to primary care, while safeguarding the best interests of the patient. Because of the ACA, patients are still required to buy an insurance policy on top of their DPC fee, protecting them from non-routine medical costs.
Sen Kathy Bernier has introduced Senate Bill 889 in Wisconsin to define how this will work. The bill, like every other such bill implemented across the country, simply says that direct primary care is not health insurance. That distinction is important because of the many laws governing that industry. The relationship is much more like the one that was developed more than a century ago in an era when doctors could focus on patient care.
Renewing the old-time doctor-patient relationship turns out to provide better care. In DPC, Doctors spend more time with their patients, and that relationship is key to managing chronic disease and preventing hospitalization. Developing that strong relationship can aid in care coordination and prevent fragmented, expensive, and often unnecessary care. Its good for the doctor and the patient.
Finally, creating DPC saves money. Because doctors can eliminate time dealing with insurance companies, they are freed up to spend time with patients, who save money by utilizing efficient and proactive healthcare. Although the idea is fairly new and growing, the results are coming in and they are good. Total medical spend in DPC has been shown to save 20% and provide higher patient satisfaction.
Consolidation in healthcare delivery systems, and a strong demand for more personalized care have fueled rapid growth for DPC since its beginning in 2006. Doctors spend more time with patients, spend less of that time in documentation. DPC practices usually have fewer patients than traditional primary care practices, typically fewer than 1,000 and most often around 200 to 600. In the past five years, developments in personal home health monitoring, and the popularity of telehealth options offered during the coronavirus pandemic have redoubled interest and demand for more direct primary care options. In the past year, states like Montana and South Dakota have passed legislation, and several other states hope to expand this tool.
DPC is a relationship between you and your doctor for basic healthcare services on a subscription basis. You sign up with your doctor, and she or he agrees to treat you and see you for basic primary care including telehealth visits, in office treatments, and most lab tests. The cost is significantly less than traditional health insurance (DPC patients typically spend $100/person/month) which is paid as a retainer by individuals directly to their doctor.
Some DPC doctors take insurance with some of their patients, and have a separate panel of patients under DPC, but it would defeat the purpose of DPC to have an insured relationship with your DPC provider. It is estimated that more than 50% of a primary care physician’s time is spent on documentation, billing and arguing with insurance companies to get their patient’s care covered. Under DPC, that time previously spent on insurance related work can be spent on patient care. For this reason, DPC physicians see significantly fewer patients than their colleagues who take insurance. This allows DPC docs to spend longer time with each patient. The average reported current DPC patient panel size was 445, while the average target panel was 628. The average ratio of the current to target DPC patient panel sizes was 70% (i.e., on average, the current DPC patient panel was 30% below the target). For those DPC practices with a full DPC patient panel, the average length of time to fill the panel was 21 months.
A two-year study across 4,000 patients found improved patient satisfaction and an overall reduction of 20% in medical spend through better disease management. That translates into real savings for families.
DPC does not cover specialty care, catastrophic illness, emergency care or prescriptions. DPC patients typically purchase a lower cost basic insurance plan (in addition to their DPC) to cover these costs. The Affordable Care Act mandates all Americans have a health insurance policy with a minimum benefit set defined as the bronze medal level. DPC patients are willing to pay for both the cost of the DPC retainer and ACA-compliant insurance premiums because they have found the combined cost to be a better value than any single policy.
Concierge care is often interchanged with DPC, even by some advocates and policy experts. DPC does not take insurance and Concierge care often does. Generally, concierge care was developed to allow people ability to buy additional services not covered by insurance. This important difference highlights the need for states to define DPC laws in statute.
A DPC physician is agreeing to accept a capitated fee for a variable amount of service and is willing to treat a group of patients for a monthly rate, rather than a negotiated rate with a third party. But simply taking on unknown costs doesn’t make a doctor a health insurance company. Because insurance companies are highly regulated, and the Affordable Care Act is very prescriptive with insurance mandates, DPC providers refrain from taking insurance, and their relationship with the patient must be defined specifically as not being health insurance. This is required for state’s wanting to set up DPC.
Physicians and patient advocates are wise to ask congress and their state legislators for more guidance in creating a free space for DPC to safely grow in the states. Patients want access to a more personalized, less expensive care system and DPC delivers at lower cost. Doctors are gaining acceptance of the model as they would rather treat patients than fight with insurance companies.
The following articles provide more information about direct primary care reform.
“Direct Primary Care, Delivering Exceptional Care on Your Terms,” American Family Physician Journal, Jan, 2021
Finnegan, Joanne, “Primary Care Doctors Spend More Than 50% of Workday on HER Tasks,” Fierce Healthcare, September 13, 2017
Hall, Mari, “Gianforte signs direct primary care bill in Billings” Billings Gazette, April21, 2021
Lamberts, Rob, MD “Difference Between Concierge and Direct Care, Medical Economics, February 18th, 2018
Maharrey, Mike “South Dakota Passes Bill that Would Set Stage to Expand Healthcare Freedom” The Tenth Amendment center, March 23rd, 2021
Qliance, “New Primary Care Model Delivers 20% Lower Overall Costs, Increases Patient Satisfaction and Delivers Better Care, PR Newswire, Jan 15, 2015
Robeznieks, Andis, Pondering Direct Care? 13 Potential Benefits and Drawbacks, American Medical Association, October 10, 2018
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 and other topics, visit the Heartland Daily News website, The Heartland Institute’s website, our Consumer Freedom Lounge, and PolicyBot, Heartland’s free online research database.
The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state, or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact Matt Dean at [email protected] or 312/377-4000.