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Direct primary care, a Better Care idea to revisit

July 28, 2017

The biggest problem with Obamacare is that it expanded health coverage through Medicaid, a program with notoriously poor access to doctors, because Medicaid pays doctors far less than private insurance. The Senate Republican health care bill aims to change that, by giving states the ability to offer an innovative new model to their poorest residents: direct primary care.

The fact that people enrolled in Medicaid have poor access to physicians is well-documented in the literature (see hereand here and here). To take one example, kids with acute asthma attacks on Medicaid only had a 45 percent chance of securing a doctor’s appointment, compared to 100 percent of those with private insurance.

One way to change this is through direct primary care, or DPC. The way to think about DPC is that it’s like concierge medicine, but for everyone, including the poor. The idea, at its core, is simple: for a nominal fee amounting to the cost of a gym membership, a patient gets broad access to a physician’s time. In the standard insurance model, a doctor gets paid for how many patients he sees, so he tries to see as many patients in a day that he can: leading to patient visits as short as five minutes. In addition, the doctor spends half his day doing paperwork to comply with electronic health record mandates, and to get reimbursed by insurers and the government for his work.

Direct primary care eliminates these problems. The monthly fee means that doctors have to spend very little time billing for their services, and have much more time freed up to see patients. Lack of physician access, as I noted above, is the biggest problem with the Medicaid program: so direct primary care is a natural way to reform how we offer health coverage and care to the poor.

As I discuss in How Medicaid Fails the Poor, a number of enterprising state legislators, such as Michigan state Sen. Patrick Colbeck, have sought to reform their Medicaid programs to allow for payments to direct primary care. But this has been extremely difficult, because the antiquated and inflexible Medicaid law makes it nearly impossible to offer these services.

The Senate Republican health care bill, the Better Care Reconciliation Act, appropriates nearly $100 billion for “stability and innovation grants” that states can use to stabilize their insurance markets, reduce deductibles, and provide extra assistance to the needy or the sick.

The state innovation provision expressly allows states to use these grants “to provide payments for health care providers for the provision of health care services,” such as direct primary care.

At the website for my think tank, the Foundation for Research on Equal Opportunity, I’ve written about the importance of expanding the funding for state innovation grants, in particular to help pay deductibles for people with incomes near or below the poverty line. This could be done through health savings accounts, or through direct cost-sharing reductions. That funding will be important for ensuring that low-income Americans can gain better coverage through the Senate bill than they gain under Obamacare’s Medicaid expansion.

But what has gone largely unnoticed by the press is how these funds can be used to dramatically expand access to direct primary care for those who most need it.

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DISCLOSURE: There has been some speculation on the internet as to my personal relationship to the Senate bill. I had no role in writing the bill, nor do I have any financial relationships with any governmental entity aside from paying taxes. However, I regularly speak to policymakers in Washington and elsewhere about public policy, as do all leading think tank scholars. In addition, many of the ideas I’ve proposed at The Apothecary and elsewhere, in particular replacing Obamacare’s Medicaid expansion and insurance exchanges with means-tested and age-adjusted tax credits, are reflected in the bill. All of the ideas expressed here and elsewhere are my own personal views on public policy, and I receive no compensation in any form that is in any way contingent on the policies I propose or recommend.

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