Chairman Murante and members of the committee, good afternoon and thank you for the opportunity to testify today in support of Legislative Bill 1119. My name is Arianna Wilkerson. I am a government relations coordinator for The Heartland Institute, a 34-year-old independent national nonprofit organization. Heartland’s mission is to develop and promote public policy solutions that expand opportunity and empower people. Heartland, which is headquartered in Illinois, focuses on providing national, state, and local elected officials with reliable and timely analyses on important policy issues.
Establishing a direct primary care (DPC) pilot program for state employees would be a big step toward expanding direct primary care and reducing health care costs. In 2016, the Nebraska Legislature unanimously adopted a law making it clear DPC arrangements are not insurance plans, and therefore aren’t subject to state insurance regulations. This push to further expand DPC comes at the right time, given the current shortage of primary care physicians facing the Nebraska. Population growth, aging citizenry, and the Affordable Care Act have all contributed to the increase in need for primary care doctors. Without reforms, it’s unlikely Nebraska will have enough primary care physicians to meet the needs of its residents.
Clinician researchers at the Robert Graham Center estimate Nebraska will need 133 more primary care physicians by 2030 to maintain current primary care utilization rates. Right now, many doctors are retiring early or avoiding the profession altogether to avoid having to deal with the state’s bloated bureaucracy and tedious insurance claims. A lack of physicians has been and will continue to be particularly harmful to Nebraskans in the rural parts of the state, such as Western Nebraska. To ensure the supply of primary care providers meets the state’s demand, Nebraska should lower overhead costs and ease the ability of providing such care, making the state more attractive to primary care physicians. Establishing a pilot program that would give public workers the ability to have a direct primary care doctor would be a good start. It would also help lower costs and increase the quality of care available to public employees.
In a direct primary care model, third-party payments for individual primary care medical services are replaced with affordable, flat-fee payments made by patients directly to their primary care physicians, usually on a monthly basis. Under this model, patients receive nearly unrestricted access to their physicians, as well as routine tests and procedures.
Supporters of direct primary care cite the growing amount of evidence that has found DPC increases the time patients spend with their doctor per visit and reduces medical practice overhead by up to 40 percent. In a study published in the American Journal of Managed Care, medical researchers compared direct primary care members to non-members in five states: Arizona, Florida, Nevada, New York, and Virginia. They found over a five-year period, DPC members were on average 52 percent less likely than non-members to utilize hospital services, saving the system an estimated $119.4 million in costs. They believe these findings were due to “increased physician interaction,” allowing physicians “to take a more proactive, rather than reactive, approach.”
In 2015, North Carolina permitted the use of direct primary care for Union County employees. The results were promising. Taxpayers in the county were spared more than $1.28 million in health care claims, and that was with only 44 percent of county employees opting into DPC. DPC enrollees’ medical expenses were 23 percent less than county employees who did not opt into DPC. DPC enrollees’ prescription expenses were 36 percent less. In addition, nearly three out of four enrollees reported significant improvement in their overall health. If the other North Carolina counties had adopted a DPC option and had similar participation rates, the state would have saved nearly $75 million in just one year.
Today, 23 states have some form of direct primary care for state employees or Medicaid recipients. The number of DPC practices across the country continues to trend upward, with more than 700 practices now in business. Nebraska should follow the lead of those states that have adopted low-cost, high-quality health care plans for state employees. In the process, Nebraska would help to improve the doctor-patient relationship for thousands of families and save crucial tax dollars, which could be better allocated to pay for other essential services.
Thank you for allowing me to testify.