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Skipping Insurance Costs Lets Wisconsin Patients Pay Less for Better Care

March 4, 2016

A Wisconsin doctor promises to provide inexpensive, high quality health care 24 hours a day to patients by using a payment model known as direct primary care.

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A Wisconsin doctor promises to provide inexpensive, high quality health care 24 hours a day to patients by using a payment model known as direct primary care.

Rather than pay for health care using a third-party health care insurer, direct primary care patients at the Platte Medical Center in Platteville, Wisconsin pay Dr. Brian Sachs a monthly fee in exchange for an agreed-upon package of services.

‘Incredibly Rewarding’

“The care you receive from a direct primary care physician is far above what a traditional insurance clinic can offer,” Sachs said.

A typical physician spends 40 percent of his or her day facilitating the payment of health care services, says Sachs. Adopting a direct pay model reduced his administrative costs and increased his availability to patients.

“My day is now spent doing what patients expect and physicians train for: diagnosing and treating disease,” Sachs said. “It is strange to say, but for the first time in my career I am free to practice medicine solely for the benefit of the patient. It is incredibly rewarding.”

Before opening his direct primary care clinic in August of 2015, Sachs practiced medicine for three years under the traditional patient-insurer-doctor payment model dominant in U.S. health care. Sachs says his new model would help physicians avoid burnout, by enabling them to decrease the “nitty-gritty details for an average practice, such as the need to answer emails, texts, and phone calls, occasionally ordering medication, coordinating with specialists.”

Skipping the insurance claims process for basic primary care services reduces overhead and allows physicians to pass those savings on to patients, Sachs says.

There is a stark difference between what his insured patients paid under the traditional model and how much he charges his direct primary care patients for similar services, Sachs says.

“Employers save 20 percent by switching payment models,” Sachs said. “It varies for individuals. Some pay more. Those with high insurance deductibles pay far less.”

Potential Backlash

Sachs’ model could suffer backlash from insurance companies in the future, depending on whether insurers come to view direct primary care as a threat, says Dr. Richard Armstrong, treasurer of the Docs 4 Patient Care Foundation, an educational nonprofit organization run exclusively by practicing physicians as an advocate for direct primary care providers.

“We have flown under the radar of the insurance industry so far,” Armstrong said. “We have not been involved in any legal action involving the insurance companies.”

Sachs says insurance companies may have larger problems to solve right now than competing with direct primary care, because they are unhappy with their own model, particularly in the wake of the Affordable Care Act.

“The direct primary care movement isn’t … big enough for the Aetnas to concern themselves with,” Sachs said. “However, we’re hopeful that instead of hostility, insurance companies will start to offer wraparound policies to complement direct primary care.”

A wraparound policy is similar to a catastrophic insurance policy. It’s designed to cover non-emergency services beyond what a direct primary care provider offers.

“As consumer and employer demand for better and cheaper health care increases, compatible insurance products will come to market,” Sachs said.

Incentive to Innovate

Armstrong says the direct primary care model creates opportunities and incentives for health insurers to innovate.

“We are in direct contact with some of the larger companies to design high-deductible policies which can work with the direct primary care model,” Armstrong said.

Sachs says the direct-pay model, already prominent in other industries, is not new to health care.

“In reality, direct patient-to-physician payment is nothing new, and virtually every other industry operates this way,” Sachs said. “Membership models exist in the cell phone industry, cable service, 24-hour gyms, and none of these are foreign or failing concepts. Primary health care services lend themselves very well to a membership model.”

Not Seen as a Cure-All

As an alternative to the traditional health care payment model, direct primary care represents an expanded option for patients as they make decisions about their health care, Sachs says, though the membership model “isn’t for everyone.”

Direct primary care “isn’t a cure-all for America’s broken healthcare system,” Sachs said. “Wraparound insurance, ancillary services, and legislation are all in flux, but solutions are being found.

Sachs says people should “talk with their employers [and] speak to local legislators” about the advantages of direct primary care “and vote with their wallet.”

Joshua Brown (josh@joshbrownesq.com) is a legislative advocate and policy analyst for the Ohio Municipal League and executive director of the Ohio Association of Public Safety Directors.

Internet Info:

Matthew Glans, “Direct Primary Care,” Research & Commentary, The Heartland Institute, January 21, 2016: https://www.heartland.org/policy-documents/research-commentary-direct-primary-care 

Author
Attorney Josh Brown is Government Relations Counsel at Graff & McGovern.
josh@grafflaw.com

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