A Low-Cost Short Cut to Primary Health Care

Consumers will choose a plan that works with a network of health-care providers with flat-fee, direct care medical homes membership as an option in the insurance exchanges, when bundled with a lower-cost "wrap-around" insurance plan that covers more expensive services outside the scope of primary care—such as specialist care, hospital stays or emergency room visits.

Earlier this year, new legislation introduced by Senator Hatch and Rep. Erik Paulsen (R-Minn.), known as The Family Retirement Health Investment Act, would allow patients and employers to use health reimbursement accounts (HRAs), health savings accounts (HSAs),  and flexible spending accounts (FSAs)to pay for these services.

“This is a virus that will catch on,” says Bliss.

“It pleases everyone, including insurance companies; eventually government will see the potential of this movement as the barriers are dropping away.”

But the idea worries some physicians.

"Unless you find a wrap-around health plan or a catastrophic health plan—you will essentially be left with a huge donut hole," says Roland Goertz, past president and current board chair of the AAFP. Some people still will need to see specialists and go to hospitals, he added, increasing the chances that there will be gaps in care.

Internist Albert Fuchs says that while the new legislation will generate a large number of newly insured patients, the "traditional model is not going to be able to expand quickly enough to accommodate.” Fuchs charges his patients an annual retainer fee and says he does not want to participate in the exchange. "It gives me a level of autonomy and independence that I don't have if I am working for the insurance company."

While proponents of direct care believe the model is a good alternative to the current health-care system, some say the legislation revisions would change the concept for the worse and require physicians to depend on insurance.

"Having to do business with insurance companies undermines the entire business model that direct primary cares have now," says Devers of the Urban Institute's Health Policy Center.

Many doctors have urged the HHS to use the Washington State primary care law as a model to make sure that federal regulations allow direct practices to remain independent of insurance companies. Doctors argue that without this independence it would be difficult for any practice to continue to offer high quality, affordable primary care.

"It is imperative to patient choice and the integrity of the direct primary care model that people be allowed to pay their direct primary care provider directly... Direct primary care practices also work because there is no insurance overhead, coding, billing, or paperwork to deal with in order to be paid," Bliss says.

It’s unclear how the new legislation will impact costs. Consumers fear the additional required wrap-around policy to cover "catastrophic events" defeats the purpose of using direct primary care as opposed to insurance.

"We are going back to square one. I don't have enough money to pay for insurance. That is the reason why I use DPC—to see a doctor," says Mona Witter, a student and direct care patient in New York. "The new policy is requiring that I have insurance."

And while the insurance exchanges will provide consumers with a choice of health plans, another concern is that the new regulations will create unhealthy competition among other health plan providers. A rush of companies, many not associated with health insurance, is also expected to jump into the market for health insurance exchanges—estimated to be worth billions of dollars.

As a result, DPC practices will begin competing with retail clinics in places such as Wal-Mart

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[WMT  Loading...      ()   ], CVS

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[CVS  Loading...      ()   ], and Walgreens

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[WAG  Loading...      ()   ], plus federally funded health-care centers, and clinics covered through Medicaid .

“I think this model could work in some markets and some entities may succeed, but I doubt it is something that can work everywhere and also doubt that it is a ‘solution,’ in that it is just another option for consumers willing to trade some things for others," says American Enterprise Institute's Gottlieb.

But Qliance's Bliss believes otherwise: “The insurance companies want to make our cost plus their cost equal less than the cost of their competitors who are just doing insurance... We want a situation where insurance companies win, and direct primary car, and patents win. If that works, then I think we have built something that can do that."

While attempts to control costs over the last decades have been largely unsuccessful, many consumers and small businesses are left having to make difficult decisions about health care. Both opponents and supporters of direct primary care are awaiting HHS regulations defining exactly how the practices will merge with wraparound coverage and be sold in exchanges. The HHS could not give specifics.