By Hal C. Scherz
The Affordable Care Act (ACA) passed with the promise of decreasing the high costs of health care and increasing access to care by making health care insurance more affordable. Almost six years later, it appears that this experiment to remake American health care has been a failure.
Few Americans are happy with this situation.
There has been a trend over the last decade where doctors directly contract with patients to care for them, reminiscent of an earlier time when doctors were paid for the services that they provided by patients and not third parties. The typical arrangements are cash practices, concierge practices and direct primary care.
In cash practices, doctors do not participate in any third-party arrangements. Patients pay doctors directly for their care. The lower administrative burden on doctors in these practices means the overhead is less; presumably, cost savings can be passed on to the patients.
Concierge practices charge a fee in exchange for increased access and services. Patients remain covered by their insurance policy and the doctors still participate in these third-party plans.
Direct care is different. They are predominantly primary care practices. Patients agree to a monthly or annual contract with a primary care doctor. The monthly fee ranges from $50 to $120 and covers on average 20-25 annual visits, basic laboratory, X-ray and diagnostic testing such as EKG, stress test and mammogram. Some practices include basic drugs. Services the primary care office is unable to deliver are outsourced to other facilities at steeply discounted prices. For example, a CT scan that might cost a patient over $1,000 in a hospital can be purchased for $150 at a free-standing facility.
More than 4,000 doctors have direct care practices. Patients prefer this arrangement because these doctors have a lighter patient load and can spend much more time with them. They have easier access to their doctor. The doctors like the elimination of red tape imposed on them by insurance companies and the government. Overhead is slashed, and their income is predictable and not at risk of being indiscriminately cut by third-party payers. They can focus on their patients and consequently their job satisfaction increases. They are less likely to burn out and leave medicine early, which is a growing trend among doctors.
A number of studies have examined patient outcomes in direct primary care practices. Patients receiving their care in these practices have fewer emergency room visits and better management of chronic diseases such as diabetes and hypertension. This means savings of hundreds of millions of dollars annually, of particular interest to states with rising Medicaid costs. Too often, Medicaid patients lack a regular doctor and receive fragmented care in emergency rooms. Direct care offers the possibility of making health care for this population more consistent at a fraction of its current cost.
Unfortunately, the primary barrier to widespread acceptance of this model is a lack of will and vision from elected state officials. Such arrangements have been considered risk-bearing entities by the state insurance commissioner, resulting in licensing and regulation as insurers.
Fourteen states have passed legislation to clarify that these type of practices are not risk bearing. With the assurance that state laws will not impede them, the uncertainty that doctors currently face in establishing direct care arrangements is removed. It’s a choice that Georgia patients need now.
Hal C. Scherz, MD, FACS, FAAP, is the Secretary of the Docs 4 Patient Care Foundation and the managing partner of Georgia Pediatric Urology.
The Foundation’s Criminal Justice Initiative pushed the problems to the forefront, proposed practical solutions, brought in leaders from other states to share examples, and created this nonpartisan opportunity. (At the signing of the 2012 Criminal Justice Reform bill.)