Welcome to the first blog entry for Full Circle DPC. Let me start by explaining direct primary care, how it can benefit patients, and how it fits into the bigger picture of rescuing our troubled healthcare system.
Direct Primary Care-The Basics
Direct Primary Care (DPC) is a rapidly growing national movement whose goal is to bring the doctor patient relationship back to the center of healthcare. We do this by breaking away from taking health insurance. Instead, we charge a moderate monthly fee for all of our services. It allows us to focus on patients, rather than jumping through hoops for insurance companies. DPC also allows doctors the flexibility to communicate with patients by phone, email or videochat because we don’t need an in-person office visit to get paid. Some problems still need an in-person visit, but now we can make that decision for medical, not financial, reasons. The increased time we have also allows us to do some of the work that we might normally refer to specialists, or some of the work (like getting stiches) that would normally need an ER.
Most people understand that dealing with insurance is a big distraction for us, and they want a doctor who focuses on them instead. Those same people ask how they can possibly afford it, when they are already paying so much for health insurance. The rest of this article focusses on these concerns.
Our Failing Health Insurance Model
We live in a time of great transition in health care. The affordable care act (ACA/Obamacare) was passed in 2010 with most of it being implemented by 2014, and the new administration promises major changes to that legislation. In reality though, neither the ACA nor any of the proposed changes significantly affects two important trends: medical care cost increases and increasing insurance company interference in the doctor-patient relationship. The graph below shows increases in insurance premiums since 2000:
The graph below shows overall health costs, not just insurance premiums, but it shows that these big cost increases date back to at least 1960:
In practice, this means that more and more people and businesses are not able to afford the full coverage health plans that were dominant 10 years ago. More and more people have high deductible health plans to be able to afford insurance at all.
Percent of people with high deductible health plans. HDHP/HRA and HSA-Qualified HDHP are two different forms of funding health care not covered by high deductible insurance.
High deductible health plans are scary because they create a huge uncertainty in medical costs. Many people can budget for a monthly premium, but who can budget for an unexpected $11,000 until they meet their deductible? People also worry that these high deductibles will mean that they will need to skimp on needed care.
Financing Your Healthcare with Direct Primary Care
DPC combined with a high deductible health plan is a solution to this problem. High deductible health plans make insurance more affordable, and DPC reduces the risk of unexpected costs. Having DPC in place is almost like primary care insurance. Like insurance, you may be paying us some months when we are not seeing you. If you get sick and need to see us twice a week, however, you don’t have to pay anything more. You can also feel comfortable calling or coming in when you need, so you won’t need to skimp on care. Below is a comparison of the costs of a conventional health insurance plan for a family of 4 ($1500 deductible) and the same family with a high deductible plan ($11,000 deductible) with DPC ($150/month for a family of 4).
The financial risk to patients is not zero, of course, because there are still labs, xrays and specialists that might have to be paid out of the deductible. The risk is not huge, however, because the savings you would get from the above plan would add up to the deductible in just over 18 months.
If you have multiple medical conditions and need to see a lot of specialists, this calculation is more complicated. DPC can still save money by reducing your need for specialists and eliminating copays for primary care. Additionally, you could spend up to $7000/year out of pocket on specialists, ER visits, and operations and still save money with a DPC/high deductible plan. As I’ll discuss below, we can also work to save you money for some of your out-of-office healthcare expenses. In the end though, people that need frequent specialist visits or multiple hospitalizations may not save money with a high deductible/DPC type plan. At that point, the value of DPC depends on whether the increased time we spend with you is worth the extra money.
We can also help you save money outside of our primary care services. We already have implemented a low-cost lab at our office and are developing relationships with imaging services to help save you money. We plan to stock affordable generic versions of certain commonly used drugs as well. Networks of specialists are developing who will be able to offer low cost services to cash pay patients.
Towards a Better Future
This last part is also a clue as to how to revolutionize our healthcare system. By making patients the payers instead of insurance companies, the whole healthcare system shifts focus. All the effort we have been putting into pleasing insurance companies can now go into caring for you. Customer service becomes a central goal, so every interaction with the medical system does not feel like a runaround. Medical institutions would need to compete with each other on price and quality, and would have an incentive to advertise quality achievements they make.
Perhaps the most important part of a patient-payer system is that it finally puts a brake on cost. Despite what it may feel like, insurance companies really only have incentive to save money around the edges. State insurance regulators historically allow medical insurance to make a reasonable percentage profit, and this was set into law by the ACA, requiring insurance companies to spend 80% of their premiums in actual care. Since profits are set at a percentage of cost, the only way for an insurance company to increase its profits is to increase its costs. Insurance companies are also hamstrung by the fact that they cannot refuse to contract with any of the major players (eg hospital systems) in a local health system, leaving them in a weak negotiating position when they try to get better prices or services (for more details see How American Health Care Killed my Father by David Goldhill or his book).
With a brake on the cost of healthcare, it would also be easier for government programs to help those who cannot pay for their own healthcare. We support universal access to care, and using market forces bring down cost makes that more realistic. In the meantime, we plan to ensure access for low income people by offering some free memberships for those who really cannot afford the monthly fee.
Dr Gold and I have embarked on the journey of offering a new form of primary care. We do this to offer better care for our patients, save them money, and to start our own little push to change the healthcare system. We invite you to join us or to contact us with question