The Affordable Care Act 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.
• The average American now pays over $4,000 more for health-care insurance, with deductibles in the $6,000 range.
• Meanwhile, 10 million to 15 million Americans still lack health insurance.
• The ACA has disrupted the health-insurance market, making it difficult for healthy young Americans to purchase insurance.
• Of the 23 federal-state insurance co-ops, 11 have declared bankruptcy, and all are in the red, except one.
• All insurance companies participating in the insurance exchanges are losing money on those products.
• UnitedHealth projects losses this year of $450 million and is contemplating dropping out of Obamacare.
• The regulatory burden on physicians is excessive and has created a major upheaval in the medical delivery system.
• Small medical practices cannot afford to remain open and doctors are either retiring or selling their medical practices to hospitals, which then shifts health care to the most expensive place in the health-care delivery system.
• Patients lose out because they no longer have the relationship with their doctor and instead get put into a system where they are just another number.
• Doctors who remain in private practice face increasing pressure to remain economically viable, which means seeing more patients in a day and devoting less time to each one.
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 types 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.
Scherz, M.D., FACS, FAAP, is the secretary of the Docs 4 Patient Care Foundation and the managing partner of Georgia Pediatric Urology. The Georgia Public Policy Foundation, an independent think tank that proposes market-oriented approaches to public policy to improve the lives of Georgians, distributed this column.