By John McClaughry
The Legislature is debating how fast to propel the state into the new adventure of universal coverage for primary health care services, “whether the services are publicly financed or covered by health insurance or other means … [and made] affordable for all Vermonters, such as through income-sensitized, State-funded cost-sharing assistance.”
The current proposal, S.53, directs the Green Mountain Care Board and the usual “stakeholders” to deliver a report by January 2019, followed by a “draft operational plan” a year thereafter. The single payer advocates are furious that the bill doesn’t decree single payer primary care right now.
Let’s make this easy to understand: the Green Mountain Care Board plus numerous “stakeholders” (all of whom will be advocates and most of whom will be protecting their livelihoods) will produce a report recommending which primary health care services and benefits, produced by which providers, will be distributed to which people, and at whose expense.
The board and its stakeholders are, however, unlikely to examine how the cost of primary care can be brought down while at the same time better serving patients, improving health, reducing reliance on expensive medical interventions and making the practice of medicine more rewarding.
The most rapidly proliferating model for doing this is direct primary care. This model is built upon the direct relationship between primary care doctor and patient. Direct primary care clinics are “cash only” with no third-party payer like Blue Cross or Medicare. This eliminates the maddening complying, negotiating and pleading with third-party payers that typically consumes as much as 40 percent of primary care practice revenue.
Direct primary care patients pay a monthly membership fee. Practices of course vary, but usually the fee covers almost unlimited access to your doctor, relaxed visits, an annual physical exam, diagnostic and procedure benefits at no extra cost, and slightly above wholesale prices for laboratory testing and pharmaceuticals. Direct primary care doctors typically arrange for discounted prices at rehab services and independent imaging centers for X-rays, CT scans, and MRIs. Some even make house calls.
One of the leading direct primary care practices, Atlas MD of Wichita, Kansas, sets its fees at $50 a month for adults ages 20 to 44, $75 a month for adults ages 45 to 64, and $100 a month for adults over 65. Each child is an extra $10 a month. Employers, especially if self-insured, may pay the membership fees as an employee benefit.
A typical direct primary care patient would also buy a wraparound high deductible insurance plan coupled with a health savings account, into which the patient, the employer or both can make tax-free contributions up to $1350 a year ($2700 family). For lower income families, states could design Medicaid waivers to allow payment of the membership fees.
If a direct primary care patient develops a major health problem requiring surgery or hospitalization, the direct primary care practice will usually suggest a cost-effective provider. The Surgery Center of Oklahoma and Ocean Surgery Center in Torrance, California, have gained national attention for posting their all-inclusive prices for a wide range of surgical procedures including recovery and medications.
According to a survey by The Physician’s Foundation, many doctors are dissatisfied with the burden of dealing with third-party payers, including the government. The survey found that doctors complained of “too much regulation and paperwork” (79 percent), “loss of clinical autonomy” (64 percent), and “erosion of the physician-patient relationship” (54 percent). The direct primary care model relieves doctors of these annoyances.
An important benefit of the model is better patient health, measured by fewer hospitalizations, fewer emergency room visits, fewer specialist visits, and fewer surgeries compared to traditional patient populations.
So why aren’t we moving rapidly toward direct primary care coupled with independent specialist centers, paid for by health savings accounts and backed up by high deductible health plans? Partly because there’s a learning curve, but also because large medical centers see their profits threatened by low-overhead cash-based clinics and specialist practices focusing on patient satisfaction and wellness.
In addition, opponents have argued in some states that direct primary care practices are insurance plans, bringing them under insurance regulation and preventing patients from paying membership fees from their health savings accounts (whose funds may not be used to pay premiums). Another roadblock is certificate of need regulation, the great shield of every dinosaur health care monopoly.
To date, there are two direct primary care practices in Vermont: one in South Burlington (Dr. Frank Landry), and the other in Manchester Center (Dr. Keith Michl). There will be more, unless primary care is swept into yet another government program designed and dominated by threatened “stakeholders.”
John McClaughry is vice president of the Ethan Allen Institute.