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Research & Commentary: South Dakota Should Consider Direct Primary Care to Increase Health Care Access and Reduce Costs

February 23, 2021

In this Research & Commentary, Christina Herrin evaluates a bill moving through the South Dakota Legislature that may allow direct primary care in the Mount Rushmore State.

It should be no surprise that direct primary care (DPC) is spreading like wildfire across the United States. According to the Direct Primary Care Frontier, the number of DPC practices has increased from only a handful in the early 2000s to more than 900 as of 2018.

DPC offers an alternative to the current debacle that is the health care insurance system by providing a fee-based membership plan usually costing anywhere from $50 to $100 dollars per month. DPC is a viable alternative to the current third-party health insurance system that is extremely complex, bureaucratic, and expensive. Typically, DPC clinics also have more flexible hours than traditional health care facilities, making it much easier to schedule timely appointments.

South Dakota is one of the few states that does not have DPC laws on the books, even though DPC could increase health care access and lower costs. One of the best perks of DPC is the time doctors are able to spend with patients, instead of filling out piles of paperwork. By removing third-party payers that come in the form of health insurance companies, DPC offers patients and practitioners a simple alternative to the complex world of health insurance reimbursement.

Because of the simplicity of DPC, there is abundant demand. By 2030, DPC participation is expected to increase by 38 percent for patients over the age of 65, and by 55 percent for those over the age of 75. Across all age groups, DPC demand is expected to increase by 8 percent over the next decade. To keep up with demand, states must first legally define what DPC is. Codifying the difference between health insurance and DPC is the first step to opening up the marketplace, allowing DPC clinics to operate within a state.

Fortunately, South Dakota Rep. Tamara St. John introduced HB 1131, which would make DPC legal in the Mount Rushmore State. As aforementioned, DPC is a patient-centered approach that allows patients more freedom when it comes to selecting a doctor at a convenient time for them. The cost benefits of DPC are also substantial. According to a study in the American Journal of Managed Care, DPC patients are 52 percent less likely to use services at an expensive hospital than those at a traditional private practice. This is a win-win for all South Dakota residents and health care providers.

Direct primary care removes layers of red tape that have contributed to the nation’s primary care physician shortage. According to the American Journal of Medicine, the percentage of primary care doctors decreased from 50 percent in 1961 to 33 percent in 2015. Research shows that this shortage is partially caused by new physicians entering the medical industry seeking specialized fields that pay more than general physicians. DPC, along with lowering costs, would also likely reverse the disturbing trend of primary care shortages throughout the United States.

A 2018 United Health Group report found that 13 percent of Americans live in a county with a primary care physician shortage. South Dakota’s rural populations are the most vulnerable to this problem, being five times more likely to live in a county with a primary care physician shortage than urban and suburban areas.

Direct Primary care is beneficial to patients and health care providers. The South Dakota Legislature has the chance to turn a commonsense idea into an impactful policy solution. Americans are being burdened by rising health care costs, physician shortages, and overly complex health care insurance policies. DPC would alleviate this problem. I urge all members of the South Dakota Legislature to strongly weigh the cost of doing nothing. If DPC were available in the Mount Rushmore State, South Dakotans (especially those in rural areas) would gain greater access to better quality health care at lower costs. In South Dakota, and every state, it is time to empower patients by allowing them to engage in DPC agreements, which would allow them more health care choices at lower costs.

 

The following documents examine direct primary care in greater detail.



Direct Primary Care: An Innovative Alternative to Conventional Health Insurance
https://www.heartland.org/policy-documents/direct-primary-care-innovative-alternative-conventional-health-insurance
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 that 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 that encourage 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.

Direct Primary Care: Practice Distribution and Cost Across the Nation
https://www.heartland.org/policy-documents/direct-primary-care-practice-distribution-and-cost-across-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 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://www.heartland.org/policy-documents/direct-primary-care-legal-and-regulatory-review-emerging-practice-model
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.

Ten Principles of Health Care Policy
http://heartland.org/policy-documents/ten-principles-health-care-policy
This pamphlet in The Heartland Institute’s Legislative Principles series describes the proper role of government in financing and delivering health care and provides reform suggestions to remedy current health care policy problems. 

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 that the traditional doctor-patient relationship is restored. By cutting 40 percent of overhead that 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 Health Care News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

The Heartland Institute can send an expert to your state to testify or brief your caucus, host an event in your state, or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact the government relations team at governmentrelations@heartland.org or 312/377-4000.

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Health Care
Author
Christina Herrin is the Campaign Manager for Free to Choose Medicine.
cherrin@heartland.org @_Free2Choose