Most people dislike their health insurance, and yet we use it for every healthcare purchase. Why is that? We’ve been conditioned to believe that insurance will reduce our healthcare expenses, but that isn’t necessarily the case. In fact, the involvement of insurance providers may be increasing the cost of healthcare in some instances.

The Traditional Primary Care Problem

An overwhelming majority of US doctors use a “Fee for Service” (FFS) billing model (i.e. the doctor receives a fee for each service rendered). Insurance carriers reimburse medical practices for these services, and the reimbursement levels have continued to decrease over the last 20 years. Most primary care doctors have been independent until now, and the low reimbursements have left doctors to focus on volume. They generally have a panel of up to 4000 patients and have to see 8-14 patients an hour (do the math, that is only 4-10 minutes per patient!). Since they need to generate enough revenue to cover the bills, doctors also have an incentive to prescribe excessive tests and procedures. Patients approve of them because insurance will “cover” it. And without a traditional cash-paying customer, there is no demand for medical practitioners to competitively price treatment. Costs continue to rise, and the quality of care is declining.

You’ve likely felt the effects of this firsthand. As insurance reimbursements began to account for more and more medical services, physicians banded together (joining medical groups and large hospital systems) to take advantage of collective bargaining power for larger insurance payments. Consequently, we’ve ended up with 4-minute primary care visits, overextended physicians and very limited patient-physician relationships.

A New Model for Primary Care

To end the cycle of rising costs and decreasing quality, we must change the primary care model…

“Direct Primary Care (DPC) eliminates undesired fee-for-service (FFS) incentives in primary care. These incentives distort healthcare decision-making by rewarding volume over value. This undermines the trust that supports the patient-provider relationship and rewards expensive and inappropriate testing, referral, and treatment. DPC replaces FFS with a simple flat monthly fee that covers comprehensive primary care services. Fees must be adequate to allow for appropriately sized patient panels to support this level of care so that DPC providers can resist the numerous other financial incentives that distort care decisions and endanger the doctor-patient relationship.”
– Direct Primary Care Coalition

The DPC model creates a value based solution for the most frequently used healthcare services (primary care services). DPC membership fees are not influenced by insurance contracts, coding and arcane rules about what is covered and what is not. Simply put, DPC puts control back into the hands of patients and their doctors.

A New Model for Purchasing Insurance

The rising cost of health insurance is already changing how we shop for coverage. More and more people are choosing high deductible policies in pursuit of lower premiums, and that fairs favorably for the expansion of DPC.

The pathway to affordable insurance and higher quality primary care looks something like this…

• Buy catastrophic coverage.
• Opt out of the notion that all medical spending needs to go through your insurance company.
• Seek medical providers that offer transparent pricing.
• Start paying a flat fee in cash that isn’t inflated to subsidize the complexity that insurance companies create.

A New Benefits Model for Employers

Can employers contribute to DPC fees as part of an employee benefits package? Absolutely, but there are a few factors to consider—most importantly the demographics of your employee group, the reach of local DPC providers and the DPC membership cost.

Currently there are only about 900 DPC practitioners in the US, and accessibility is a challenge until the model scales more widely. In the interim, Virtual Primary Care (VPC) physicians are providing unlimited medical support via phone, video conferencing and text for a flat fee like DPCs. VPCs can arrange in-office doctor visits with a local provider as needed, but most patient interactions are handled virtually.

Aligning with a DPC or VPC provider may help your organization to attract talent, reduce employee turnover, reduce absenteeism and ultimately get more value out of your health plan investment.

Schedule a complimentary consultation to learn more about DPC/VPC membership and other creative coverage options.
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