By Marguerite Duane, MD, MHA
MARCH 24, 2014 – Five years ago, I became medical director of two community health centers that serve an almost exclusively poor and uninsured population in the DC metropolitan area. More than 90% of our patients make less than 200% of the federal poverty line (about $47K for a family of 4 in 2013). Our patients live paycheck to paycheck and often times have to make hard choices when it comes to paying for health care. We request patients contribute $40 a visit towards their care and on average they pay $32 a visit at the time of care. This is a good deal of money to our patients, but when asked why they contribute as much as they do, they respond with statements such as “I appreciate all the time the doctor spends with me” or “it’s important for my health” or “I value all the work of the physicians and staff in helping me manage my problems.”
Albeit challenging, caring for this patient population has been extremely gratifying. Since they pay out of pocket they are invested in the care they receive. They ask questions about the necessity of tests and treatments, especially more expensive ones, but with minimum 30 minute visits, we have time to explain why a certain vaccine is important to receive or which labs we could consider doing at a later date. The patient is truly at the center of care and as a physician, my role was to work with them, guiding them to make the best choices to support their health and well-being. Almost all our patients are grateful for this type of care and with appropriate support can become actively engaged in their care, willing to pay what little money they have for the services they need. However, there is a small sub-set of our patients that differ dramatically, the few patients we have with government health insurance. From their perspective, health care is free, so they typically request tests that are not necessary because in their mind they do not have to pay for it. Or, these patients refuse necessary services, e.g. counseling, even if it only costs them $20 for a 45 minute session. They have become so addicted to “free” health care via their insurance, that they do not feel it is fair if they have to pay for anything.
This becomes especially problematic when they visit our dental clinic. These patients are also much more likely to no show for appointments because we cannot charge them for the missed visit. Also, I believe this reflects how little they value the time of the doctor – whom many of them view as a means to an end, e.g., the medication or treatment that they think they should receive. Our uninsured, poor patients also occasionally no show, but it is typically due to an unexpected financial emergency that forces them to choose between seeing the doctor or paying their electric bill as an example.
So, if poor people have so little to spend, why would the direct primary care model work for them? Simple, with direct pay models the actual health care costs can be kept much lower and therefore more affordable for these very patients. Plus, since direct pay models often have smaller patient panels, these patients may have more time with their physicians and staff to address the myriad of issues in their life that may be affecting their health.
When most people, even health professionals, hear the term Direct Pay Primary Care, they presume this is high cost concierge care for the wealthy. While it may have started out this way, it has evolved over the last decade and many variations of the model exist now that would serve poor patients well.
Some direct pay models charge patients a monthly or yearly membership fee that covers all primary care office visits and even some basic or in-house labs. For example, at Qliance in Seattle, depending on the patients’ age, members pay a fee that ranges between $54 – $94 a month, which includes:
- 7-day a week access to the Qliance health care team
- Same or next-day appointments for urgent care
- 30-60 minute office visits
- Phone appointments and e-visits
- After hour phone access to a physician for urgent medical needs
- Convenient, basic x-rays onsite at no additional charge
For my family of five, this would cost us $3,780, a significant sum of money, certainly, for poor patients, but much less than the $16,000 our health care insurance costs, which does not include co-pays or x-rays. Granted our health insurance also covers catastrophic care, but patients can purchase catastrophic health insurance as a separate policy, which would be significantly less than a comprehensive plan that includes coverage for primary care. I know from personal experience as I purchased catastrophic health care insurance coverage for a year for about $1000, with a $3000 deductible.
Monthly membership models work particularly well for patients with chronic conditions, especially poor patients who may be reluctant to pay for an office visit to follow-up for their high blood pressure when they don’t feel sick. For example, at the community health center, I had a patient cancel his follow-up visit for his blood pressure, because he thought it was more important to spend the money on new school clothes for his kids. When he came to the office a month later after having been off of his medications for 3 weeks, his blood pressure was dangerously high. I believe if he would have already invested in a monthly membership plan, he would have kept his visit and we could have kept his blood pressure under control.
Some direct pay primary care models allow patients to pay for services “a la carte.” For example, Access Health in Apex, NC offers $59 office visits for non-members. In the waiting room, there is a list of prices for commonly ordered labs and services, e.g. a strep test or an EKG, so patients see exactly what they are paying for – true price transparency! This model would also work well for poor patients as they would know how much their care will cost up front. Yet, would Medicaid patients choose to pay for primary care that they would otherwise receive for “free”? Absolutely! The founder of Access Health shares stories of patients who happily pay to see him, because they would rather see a physician for 45 minutes after waiting for 5-10 minutes, than wait for 45 minutes before seeing a physician for 5-10 minutes. Also, Access Health goes one step further to make care even more accessible to the poor, by offering a way for people to donate money to cover primary care services for poor patients.
Sure, direct primary care is great because it covers all primary care visits, but you may wonder how will poor patients pay for labs or specialty visits? It may surprise you to learn that the actual cost of most basic labs is actually very little. Again, at my community health center we negotiated with local labs to pay just above the actual cost of the tests and in exchange, we paid our lab bill in full monthly. Here is an example of how it would work for a patient with diabetes:
Labs Actual Cost Patient Paid at time of visit
HgA1C $8.72 $10
Lipid panel $3.47 $ 5
CMP $4.21 $ 5
The patient would pay $20 for labs that actually cost $16.40. While a profit margin of $3.60 in the health care may seem small, neither the clinic or lab had to pay an “insurance bureaucracy tax,” i.e. money paid for billing people to process insurance claims or send follow-up reminders for un-paid bills months later, so we benefitted from the savings by paying close to the cost for actual labs.
What about the cost of specialty care, clearly this is much too expensive for poor people to afford, right? My response to that question is two-fold.
First, one of the main benefits of the direct primary care model is physicians have more time to spend with their patients to actually figure out what is wrong and treat problems appropriately; and therefore, they need to refer patients less often. As family physicians, I believe we are well trained to handle the myriad of problems that patients may present with, but we do not have enough time to adequately address them in a 10 minute office visit, so we often feel compelled to refer them to specialists.
Qliance has demonstrated that when you have the time to spend with patient, specialist and ER visits, surgeries and hospitalizations are all significantly reduced. (http://www.academyhealth.org/files/2011/tuesday/bliss.pdf – Slide 15). Second, even specialists are willing to reduce their fees when they are guaranteed payments in a more timely manner. Again, when we eliminate the insurance middleman, we significantly reduce the uncertainty and/or time it takes to pay for services. In reality, fees for sub-specialty visits, services, surgeries, etc. are set for insurance companies who routinely underpay by a significant amount, since they can negotiate much lower payments. Again, if we could eliminate the “insurance bureaucracy tax” by reducing administrative costs through the removal of the insurance middle man, specialists could charge patients much less for the actual services they provide.
So, why are physicians reluctant to move to direct pay model? Two reasons:
- Many physicians mistakenly believe that poor people can’t afford concierge medicine. However, again, the concept of concierge medicine is distinctly different from direct pay models of primary care. Concierge medicine often does involve high retainer or membership fees that guarantee access to the physician. However, these fees often do not cover actual physician visits which may still be billed separately to insurance companies. On the other hand, direct pay models of primary care may involve monthly membership fees, but these are much more affordable, often costing less than monthly cell phone bills. More importantly, these fees cover the actual physician visits almost entirely.
- The second reason it may be difficult for patients and physicians to move to direct pay models of care is our addiction to the insurance model of care. Physicians are accustomed to being paid by insurance companies, so they provide the care that insurance companies require in order to be reimbursed appropriately, rather than the care that patient may actually need. As for patients, many poor people are accustomed to being covered by Medicaid which often times allows them to access care without co-pays, so in their mind it is “free”. However, since fewer and fewer physicians accept Medicaid, usually because of poor reimbursement rates, patients “spend” a lot of time searching for care rather than receiving the actual care they need. While change is difficult, physicians and patients alike must break their addiction to health insurance, because with the insurance company as the payor, the patient will never be at the center of care.
Patients should pay for primary care through direct pay models, so they can truly be in control of the care they receive. If patients are in control, they can choose physicians that provide high quality care with which they are satisfied. Although these models of care may necessitate physicians have smaller patient panels, this will actually allow physicians to form better relationships with patients. Insurance is designed to cover unpredictable, undesirable or expensive events. Primary care is none of these and therefore these services should be paid for directly by the patient through Direct Pay Model Practices.