One of the lesser-known factors contributing to the rapid increase in the cost of health care is the shrinking number of primary care physicians (PCPs) available relative to the size of the population. Similar to most states, Florida faces a severe primary care shortage. The Robert Graham Center estimates to maintain current rates of primary care utilization, Florida will need “an additional 4,671 primary care physicians by 2030, a 38 % increase compared to the state’s current (as of 2010) 12,228 PCP workforce.”
Current primary care doctors face myriad regulations and a reimbursement system that is slow and costly, creating overhead that can eat up to 60 percent of a typical primary care practice’s revenue. For this reason, many new doctors have chosen to avoid primary care altogether, a phenomenon that has helped to create a shortage of family doctors across the United States. Direct primary care (DPC), also known as “retainer medicine,” is one health care provider model that has become increasingly popular for doctors and patients alike and could serve to revitalize the U.S. primary care system.
Under a direct primary care agreement, patients pay a monthly membership fee, typically ranging from around $50 to $80. As part of the membership, patients receive a more-generous allocation of appointments than they would under most traditional plans. Some agreements even include same-day appointments and house calls.
The model removes the layers of regulation and bureaucracy created by the traditional insurance system and allows physicians to see fewer patients and focus more time on each patient. Routine tests and procedures are included in most DPC plans, and lower membership fees are typically charged for programs that do not provide these additional services.
The Florida Legislature is again considering an important reform that could dramatically affect the state’s direct primary care industry. The proposal explicitly states direct primary care agreements do not constitute “insurance,” thereby exempting such agreements from regulatory burdens placed on insurance companies.
A second proposal under consideration in the state is a new model for Medicaid that includes direct primary care. The plan has three main components: a direct primary care plan to provide primary care for patients; a health savings account, which would allow patients to pay cash for their health care needs; and an insurance plan that would cover catastrophic illnesses. This pilot program, which is similar to another being discussed in Michigan, could save the state from paying huge Medicaid-related costs and give patients greater access to care.
In one 2012 study published in the American Journal of Managed Care, urgent and avoidable hospital admissions were found to be lower among DPC patients. The study concluded, “We believe that the [DPC] personalized preventive care model of smaller practices allows the physician to take a more proactive, rather than reactive approach … This increased physician interaction has resulted in lower hospital utilization and ultimately lower healthcare costs.”
According to the Docs4Patient Care Foundation, under a DPC model, medical practice overhead can be reduced by as much as 40 percent. Proponents of DPC programs agree these services are best used in conjunction with a high-deductible health care insurance plan or another form of catastrophic coverage to handle in-patient health care services. The American Academy of Family Physicians has endorsed the DPC model.
A health care model that embraces direct primary care could lead to lower health care costs. In a report on DPC by the Maine Heritage Policy Center, Liam Sigaud cites a 2014 study that found if DPC is adopted nationwide, overall health care costs would be reduced by as much as 30 percent.
Direct primary care empowers patients and doctors, giving them greater freedom to establish and participate in health care provider models that work best for their unique needs. Florida should remove unnecessary regulatory barriers to direct primary care to help revitalize the state’s primary health care system.
The following documents examine direct primary care in greater detail.
Policy Diagnosis: Seize the Moment to Reform State Health Care Laws
https://heartland.org/news-opinion/news/policy-diagnosis-seize-the-moment-to-reform-state-health-care-laws?source=policybot
In this interview, Health Care News Managing Editor Michael Hamilton asked Dr. Hal Scherz, board secretary for the Docs4PatientCare Foundation, how the Trump administration is changing the health care regulatory environment and what actions lawmakers should take to improve health care.
Research & Commentary: Ten Health Care Reform Options for States
https://heartland.org/publications-resources/publications/research–commentary-10-health-care-reform-options-for-states
In this Research & Commentary, Matthew Glans outlines 10 steps state legislators should take to improve the cost and availability of health care in their states.
Direct Primary Care: An Innovative Alternative to Conventional Health Insurance
https://heartland.org/publications-resources/publications/direct-primary-care-an-innovative-alternative-to-conventional-health-insurance?source=policybot
Insurance-based primary care has grown increasingly complex, inefficient, and restrictive, driving frustrated physicians and patients to seek alternatives. Direct primary care is a rapidly growing form of health care which alleviates such frustrations and offers increased access and improved care at an affordable cost. State and federal policymakers can improve access to direct primary care by removing prohibitive laws and enacting laws encouraging this innovative model to flourish. As restrictions are lifted and awareness expands, direct primary care will likely continue to proliferate as a valuable and viable component of the health care system.
Restoring the Doctor-Patient Relationship: How Entrepreneurship Is Revolutionizing Health Care in Maine
https://heartland.org/publications-resources/publications/restoring-the-doctor-patient-relationship-how-entrepreneurship-is-revolutionizing-health-care-in-maine
This report by Liam Sigaud of the Maine Heritage Policy Center analyzes the current direct primary care (DPC) landscape in Maine, evaluates how DPC is benefiting patients, highlights some of the challenges DPC practices face, and offers policy recommendations to promote this type of practice in the future.
Where Obamacare Leaves Questions, Direct Primary Care May Offer Answers
https://heartland.org/publications-resources/publications/where-obamacare-leaves-questions-direct-primary-care-may-offer-answers?source=policybot
Proponents of the Affordable Care Act (ACA) set out to remake American health care with the law’s passage in 2010, but in many respects the ACA didn’t change the health care paradigm at all; it simply doubled-down on a broken, decades-old status quo making health “coverage” a national priority, rather than focusing on limiting health care costs and enhancing health care access. Patrick Ishmael of the Show-Me Institute explores in this essay a promising medical practice model, direct primary care, which he says could deliver on the promises made by proponents of the ACA to lower costs and improve access to quality health care.
Direct Primary Care: Practice Distribution and Cost Across the Nation
https://heartland.org/publications-resources/publications/direct-primary-care-practice-distribution-and-cost-across-the-nation?source=policybot
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 the “concierge” practice; and evaluate data compiled from existing DPC practices across the United States to determine the cost advantages associated with this model. Eskew and Klink confirmed DPC practices’ lower price points and broad distribution, but data about quality are lacking.
Direct Primary Care: A Legal and Regulatory Review of an Emerging Practice Model
https://heartland.org/publications-resources/publications/direct-primary-care-a-legal-and-regulatory-review-of-an-emerging-practice-model?source=policybot
Philip M. Eskew examines concerns related to the “business of insurance” (BOI) encountered by DPC physicians. He analyzes recommended contractual provisions used to minimize BOI risk; compares state laws written chiefly to address risks related to BOI; considers the DPC provisions in the Affordable Care Act; and briefly considers the tax and scope-of-practice policy implications of the DPC model.
Direct Primary Care: Restoring The Doctor-Patient Relationship
http://www.forbes.com/sites/katherinerestrepo/2015/10/23/direct-primary-care-restoring-the-doctor-patient-relationship/
Katherine Restrepo writes about direct primary care and how it could lower costs and improve the relationship between doctors and patients in this article in Forbes. “The beauty of practices like Doctor Direct is the traditional doctor-patient relationship is restored. By cutting 40 percent of overhead which is normally spent on getting paid by insurance companies, primary care providers can devote hour-long appointments to their patients and deliver care at a fraction of the cost.”
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 subject, visit The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.
If you have any questions about this issue or The Heartland Institute’s website, contact John Nothdurft, The Heartland Institute’s government relations director, at [email protected] or 312/377-4000.
Matthew Glans joined the staff of The Heartland Institute in November 2007 as legislative specialist for insurance and finance.
