Wisconsin lawmakers are considering legislation establishing that direct primary care agreements are not insurance.
Primary care includes routine and preventative services such as annual check-ups, urgent care, chronic care management, and tests. In a direct primary care arrangement, the patient pays a membership fee of around $75 to $100 a month that allows unlimited access to a doctor, often same-day or next-day, and big discounts on tests, prescriptions, and other services. DPC providers do not bill insurance companies. Combined with high-deductible, low-cost insurance against catastrophic health problems, direct primary care provides low-cost, high-quality, personalized care while the separate insurance provides protection from financial disaster.
The main barrier to DPC is the complicated regulations imposed by state bureaucracies and consumer protection authorities that regulate insurance companies.
Wisconsin’s Assembly Bill 8 and Senate Bill 4 state, “This bill exempts valid direct primary care agreements from the application of insurance law. A ‘direct primary care agreement,’ as defined in the bill, is a contract between a health care provider that provides primary care services under the provider’s scope of practice and an individual patient or the patient’s legal representative or employer in which the health care provider agrees to provide primary care services to the patient for an agreed-upon subscription fee and period of time.”
Freeing direct primary care from insurance regulations is important because such agreements are not insurance. DPC practices provide routine health services, not insurance against expensive, catastrophic conditions.
The simple subscription payment approach of DPC eliminates the paperwork costs and rigid treatment rules that interfere in the doctor-patient relationship. U.S. physicians currently spend more than one-third of their work time on paperwork and other administrative tasks insurers require, according to the Medscape Physician Compensation Report for 2023. In addition, doctors spend more than half of every patient visit typing data into a computer, a prominent source of physician burnout. A March 2023 study in the Journal of Internal Medicine found 49.9 percent of health care workers met the criteria for burnout.
Direct primary care eliminates those problems, enabling doctors to take more time in examining patients and develop much greater knowledge of their conditions. DPC doctors also have a smaller patient load, generally around 400 to 600 (averaging 402), while physicians in traditional medical clinics can have 2,000 to 3,000 or more. The reduced paperwork burden for DPC doctors can save practices as much as 40 percent on their operating costs, savings they pass on to their patients through low membership fees.
Direct primary care also benefits patients by improving overall health outcomes, as the fixed-payment approach gives DPC doctors a financial stake in providing the most effective care because additional visits do not increase their revenue. “U.S. adults who regularly see a primary care physician have 33% lower health care costs and 19% lower odds of dying prematurely than those who see only a specialist,” says the Purchaser Business Group on Health. A five-year study published in the American Journal of Managed Care found Medicare patients who visited DPC doctors were 52 percent less likely to be hospitalized.
Wisconsin has a shortage of doctors, and the situation is expected to get worse. The Cicero Institute projects Wisconsin to be short 2,263 doctors by 2030, with primary care short 942 providers. In 2024, “44 of Wisconsin’s 72 counties [were] health professional shortage areas,” and “31.1% of Wisconsin physicians are within retirement range right now,” according to the institute.
AB 8 and SB 4 are designed to prevent DPC providers from taking only the healthiest patients, stating they “may not decline to enter into or terminate a direct primary care agreement with a patient solely because of the patient’s health status.” DPC practitioners may consider the provision to be a bearable price to pay for being freed from insurance regulations. The requirement, however, is unnecessary and opens the door to further government interference in practices’ membership decisions and undermining their independence.
Removing the burdensome and misguided government regulation of direct primary care as insurance helps patients get truly affordable care in a timely manner, improves patients’ health, increases access to care, and frees doctors to provide individualized treatment while avoiding unnecessary, costly paperwork that does nothing to improve people’s health.
The following documents provide useful information about direct primary care.
Wisconsin Assembly Bill 8, Senate Bill 4
“This bill exempts valid direct primary care agreements from the application of insurance law. A ‘direct primary care agreement,’ as defined in the bill, is a contract between a health care provider that provides primary care services under the provider’s scope of practice and an individual patient or the patient’s legal representative or employer in which the health care provider agrees to provide primary care services to the patient for an agreed-upon subscription fee and period of time.”
The American Academy of Family Physicians Foundation provides a primer explaining direct primary care for patients and providers.
Wisconsin Physician Shortage Facts
The Cicero Institute projects Wisconsin to be short 2,263 doctors by 2030, with primary care short 942 providers. In 2024, “44 of Wisconsin’s 72 counties [were] health professional shortage areas,” and “31.1% of Wisconsin physicians are within retirement range right now,” according to the institute.
Personalized Preventive Care Leads to Significant Reductions in Hospital Utilization
This 2012 study in The American Journal of Managed Care reports that members of a personalized care plan “were approximately 42%, 47%, 54%, 58%, and 62% less likely to be hospitalized relative to nonmembers for the years 2006, 2007, 2008, 2009, and 2010, respectively. By 2010, MDVIP hospital discharges for the Medicare population were 79% lower than the nonmember Medicare population, and this difference was shown to be trending up since 2006 (70% to 79%). A similar trend was seen in the non-Medicare population (49% to 72%).”
Burnout Related to Electronic Health Record Use in Primary Care
This 2023 study in the Journal of Primary Care & Community Health states, “Physician burnout has been increasing in the United States, especially in primary care, and the use of Electronic Health Records (EHRs) is a prominent contributor.” Insurance and other third-party payers are responsible for the problem, the study shows: “Billing and documentation have been the primary drivers of EHR design, not patient needs and health management.”
Direct Primary Care: Saving Doctors from Burnout
Katherine Restrepo explains how direct primary care helps save doctors from burnout in this article from Forbes. “Doctors are happier once they realize that they can keep health care simple,” Restrepo writes. “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.”
Primary care physicians in fee-for-service practices spend more than half their workday dealing with electronic health records, a study published in Annals of Family Medicine found. “During a typical 11.4-hour workday, primary care doctors spend 4.5 hours on EHR tasks while in the office and an additional 1.4 hours per day outside of clinic hours, in the early morning or after 6 p.m., including 51 minutes on the weekend,” the study states.
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 concierge medicine; and evaluate data compiled from existing DPC practices across the United States to determine the cost advantages of DPC. Eskew and Klink confirm DPC practices’ lower price points and broad distribution, though data about quality were lacking at the time.
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 Health Care News website and The Heartland Institute’s website.
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S. T. Karnick
S. T. Karnick is a Senior Fellow at The Heartland Institute.
S. T. Karnick is a senior fellow and director of publications for The Heartland Institute.
