Is Direct Primary Care the Answer?

Direct Primary Care: can it reduce Obamacare cost inflation?

The sticker shock of the Affordable Care Act, (aka “Obamacare”) has arrived and patients are now face to face with much higher insurance deductibles. Of course, that means that routine “day-to-day” health care needs are being paid for out of pocket by more and more Americans.

How can patients afford to have such an expensive, mandated health insurance and still have to pay for most routine medical care out of pocket? Village Health is currently working hard on providing a solution for the patients of North Macomb County. It’s called Direct Primary Care (DPC) and it’s one of the newest concepts in medicine. It involves doctors and patients contracting together – without the costly bureaucracies of government and the insurance industry ratcheting up the fees.

The most important concept in DPC is the removal of the costly layers of insurance and government administrative fees from most health care transactions and its replacement by a system where patients contract directly with the physician for most routine medical services.

The majority of this routine care does not require expensive resources such as hospitals, surgical centers and MRI or robotic surgery devices. Health insurance should be reserved for catastrophic medical developments such as heart attacks, major traumas and cancers which, of course, require these advanced resources. These are the events which, though relatively rare, can bankrupt the victim and his family. Conversely, just as we don’t submit insurance claims for routine oil changes on our cars, we should not be filing insurance claims for routine medical events like annual checkups, sore throats and UTI’s.

The way Direct Primary Care works is somewhat similar to a gym membership and very similar in price. The latter is based on universal usage of everything in the facility, in return for payment of a monthly fee. Likewise, with DPC, the patient/family pays a monthly (or quarterly) fee and enjoys all the services that the clinic or office has at its disposal. For conditions requiring more advanced services, the patient — who is strongly encouraged to carry a low cost, high deductible “catastrophic” insurance plan — will pay out of pocket up to their deductible.

Even expensive testing like CT’s and MRI’s, which are typically not available in a doctor’s office, are much cheaper when paid for out of pocket due to the lack of insurance overhead. As more and more patients join DPC plans, these costs are likely to drop further as part of discount pricing arranged through preferred provider status. If this price “deflation” extends to specialist referrals, laboratories, physical therapy and surgical suites, we could be talking about massive savings.

Fortunately, in practice, those more costly interventions applying toward the deductible will be the infrequent exception when compared to the day-to-day treatment of complaints ranging from sinusitis and lacerations to migraines and back pain. When paired with the high deductible health plan (even when it’s burdened with costly and often unnecessary Obamacare mandates) the DPC solution will be affordable to most Americans.
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