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Research & Commentary: Wisconsin Looks to Open State to Direct Primary Care

December 6, 2017

In this Research & Commentary, Matthew Glans examines a new bill in Wisconsin that would would clarify that direct primary care providers are not subject to state insurance regulations.

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, Wisconsin faces a severe primary care shortage. The Robert Graham Center estimates to maintain current rates of primary care utilization, Wisconsin will need “an additional 942 primary care physicians by 2030, a 22% increase compared to the state’s current (as of 2010) 4,167 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. Today, 23 states have a direct primary care law in place.

A new bill introduced in Wisconsin would clarify that direct primary care providers are not subject to state insurance regulations, thereby removing the restrictions and costs associated with being an insurance provider. The bill, proposed by state Rep. Joe Sanfelippo (R-New Berlin) and state Sen. Chris Kapenga (R-Delafield), would also require the state’s Department of Health Services to set up a pilot program for direct primary care for Medicaid recipients.

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. According to the Docs4Patient Care Foundation, under a DPC model, medical practice overhead can be reduced by as much as 40 percent.

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. Applying these savings to Wisconsin’s Medicaid program could save the state millions while improving patient care.

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. Wisconsin 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.
 

Free-Market Physicians Look to Save America’s Broken Health Care System – Directly
http://www.maciverinstitute.com/2017/10/free-market-physicians-look-to-save-americas-broken-health-care-system-directly/
Matt Kittle of the MacIver Institute examines the potential for direct primary care in Wisconsin and the new bill that could make rapid expansion possible. “Direct care is empowering consumers and the free market to drive down the cost of health care and, as has been abundantly documented, improve outcomes. It offers the return of the true doctor-patient relationship because it shifts control from far away bureaucrats to health care consumers,” wrote Kittle.

Policy Diagnosis: Seize the Moment to Reform State Health Care Laws
https://www.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://www.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://www.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://www.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://www.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://www.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://www.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 john@heartland.org or 312/377-4000.

Author
Matthew Glans joined the staff of The Heartland Institute in November 2007 as legislative specialist for insurance and finance. In 2012, Glans was named senior policy analyst.
mglans@heartland.org @HeartlandGR