When Amazon, Berkshire Hathaway, and JP Morgan (AmBerGan) announced their healthcare partnership, Berkshire CEO Warren Buffett declared “the ballooning costs of healthcare act as a hungry tapeworm on the American economy.” He is right. Our broken system is infested with tapeworms. Tapeworms are parasites; they exploit their hosts, drain resources, and suck the life out of their prey. Unfortunately, Buffet failed to call attention to the tapeworms specifically –they are insurers, hospital conglomerates, pharmaceutical companies, and pharmacy benefit managers.
As healthcare costs continue to skyrocket, Americans increasingly find themselves struggling to make ends meet. Direct Primary Care (DPC) is a tapeworm-free medical concept whereby: 1) a periodic fee is charged for comprehensive primary care services, (2) the arrangement is free from billing through third parties, and (3) if additional fees are charged, those are less than the monthly fee. Depending on age, fees range between $60-150 per month. Patients gain direct access to their physician coupled with unprecedented levels of affordability.
DPC physicians provide protracted office visits, after-hours appointments for emergencies, and occasionally, even home visits. DPC practices can dispense chronic medications at wholesale prices, perform basic procedures in-office, and when outside testing is necessary, these physicians can negotiate discounted “cash” prices on behalf of their patients. This model goes a long way toward restoring the sacred relationship between a patient and their physician. It is no wonder patients are leaving the health care system in droves.
The last obstacle facing expansion of the DPC practice model is their misclassification as an “insurance” product rather than a “healthcare” entity. Legislation, known as the Primary Care Enhancement Act, already exists to repair this mistake and has 29 cosponsors. H.R. 365/ S.R.1358 would allow for two things: 1. Taxpayers participating in a DPC arrangement may qualify for an HSA plan and 2. HSA funds could be used for monthly fees for a DPC arrangement. According to the Moran Company, this legislation is nearly “deficit neutral.”
Why has this legislation floundered? Because corporate interests, like those of the Amazon group and CVS-Aetna, have left Congress a little dazed and confused. Enter Capitated Primary Care (CPC) from stage left, an entirely different medical practice model, where a pre-negotiated rate is paid monthly by a third party for unlimited primary care services. This model welcomes the third-party back with open arms.
To make things more confusing, the Centers for Medicare and Medicaid Services (CMS) jumped on the DPC bandwagon by introducing a “Direct Primary Care Prototype,” is anything but direct primary care. The CMS concept requires physician enrollment in Medicare and submission of patient data to receive capitated payments of $90-120 per month. This innovative model is certainly intriguing, but is another example of capitation, not DPC. Data on capitated payment for healthcare services is equivocal at best, an indication that cost containment is difficult to achieve with third party involvement.
Following CMS footsteps, the Amazon group hired Martin Levine, MD, a geriatrician formerly of Iora Health, a Boston-based CPC entity focused on providing comprehensive services for the over-65 crowd, indicating they may be intrigued by the CPC model as well. Corporate entities should not lose sight of the fact that Qliance and Turntable Health went bankrupt last year after offering team-based CPC services to the masses.
Tapeworms represent third parties who have ingratiated themselves into the patient-physician relationship in the interest of the almighty dollar. As the distance has grown between patients and physicians, costs have spiraled out of control. By inviting extra layers of bureaucracy, CMS and other corporations are essentially slapping lipstick on the tapeworm and trying to make CPC look as attractive as Direct Primary Care, but that is an illusion. Cost-containment can only be achieved by bringing the patient and physician in closer proximity and eliminating the tapeworm infestation currently sucking the life out of the healthcare system.
Niran Al-Agba (@silverdalepeds) is a third-generation primary care physician in solo practice in an underserved area in Washington State who blogs at peds-mommydoc.blogspot.com.
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Essential consideration got at a clinic enterprise possessed practice where the visit is $250, the official charge is $450, and seasonal influenza test is $2000 (look at findmydirectdoctor’s blog ) definitely “do go into it.”
Well written. Today, healthcare is shifting from fee-based care to value-based care. Also, digitization in healthcare is growing exponentially. To reduce care fragmentations and improve physician-patient relationship there are health IT solutions for a better patient outcome and better patient-physician relationship. Solutions like patient referral management, chronic care management, care management can be great to solve many challenges.
Doctors are people too.
“Why do you refuse to acknowledge its value?”
Because it exacerbates the scarcity of access to PCPs, especially in rural areas with few enough. Why should anyone be forced to join the club just to ensure access to health care.
It has value to docs and maybe to chronic needs patients, but forces people who don’t need constant access to pay the monthly fee just to get any access. DPCs can’t service Medicaid and Medicare patients, unless both are willing and able to pay cash.
It’s not a cure for the health care system – only for docs.
I am not a DPC doc, Peter. I support this model wholeheartedly. It is meeting a need for many in my rural community. Why do you refuse to acknowledge its value?
“You cannot appreciate it until you experience the difference.”
At least the doc appreciates the difference, but not those patients who need a doc appointment but have not joined the DPC club. Have you checked the price of Atorvastatin (Lipitor) through cash price at Walmart?
Niran, I have nothing against DPC docs or the model itself. Indeed, I’m pretty sure the doctors are very good. I just don’t think it works for me because my combined premiums for Medicare Part B, Part D, my supplemental plan and Medicare’s significant IRMAA surcharge would still be the same whether I subscribed to a DPC practice or not. Ditto for my wife who is in quite good health knock on wood.
I also take six generic maintenance drugs for heart disease five of which are either Tier 1 or Tier 2 on my insurer’s Part D formulary. My copay for each of those five drugs is zero for a 90 day supply if I get them by mail which I do. The other one I get from Costco for $35 for a 90 day supply that would have cost about $75 through my insurer as a Tier 3 drug.
Right on Dr. Morgan. This just happened to one of my patients at a specialty clinic last week. They have to pay $400 out of pocket for the same service I already provided….. its ridiculous.
The tapeworm is actually “ballooning costs” sucking the system dry. Hospitals, big pharma, insurers, PBM’s and large organizations are actually responsible for the ballooning costs. Tell me you can understand that simple concept… pretty please?
Remember physician costs are only 8% of the overall expenditures.
Soon they will be hungry for control over DPC…. Hmmm, Did you mean more relevent…. like your posts?
DPC is like a fine wine. You cannot appreciate it until you experience the difference. Obviously, you do not have high opinions of DPC physicians and that is alright Barry. Heart disease isn’t rocket science. They can’t perform heart surgery, but can do everything else. Lipitor is less than $5/mo through a DPC doc. And you would pay the same rate as everyone else, it is not charged based on medical issues…. but you are a businessman so I understand why you have it a little backwards. Thanks for reading.
Primary care received at a hospital corporation-owned practice where the visit is $250, the facility fee is $450, and the flu test is $2000 (check out Dr. Pelzman’s blog if you don’t think that’s what they charge in NYC for that last one) most certainly “do enter into it.”
The primary benefits of a DPC membership as far as I can tell are timely appointments, often on the same day, the ability to handle some routine matters by phone, and the ability to reach the doctor by phone on a timely basis, especially in an emergency.
For someone like myself with established heart disease and some lesser medical issues as well, I don’t see how it would save me or the healthcare system any money. At my age, it would probably cost at least $150 per month for the DPC membership. I could easily afford it but I just don’t see the value, at least in my case and even less so in my wife’s case.
The tapeworm that Buffet describes is the overall cost of health care. The cost of Primary care (to ape Monty python) “don’t enter into it”…. find a better and more relevant analogy pretty please
That is kind of the point Peter. 80% of the time, patients would not need Medicaid. However, when something serious happens, no one should go bankrupt. Medicaid is necessary and physicians should care for Medicaid patients.
In a word, it is difficult because of the cost of providing immunizations. Basically, in Washington State they are provided to the physician offices free and we do not charge for any cost except administration. As a result of participating in the Vaccines For Children program we must contract with Medicaid. I have a waitlist with more than 100 on it. They have to go to Federally qualified health clinics, but they jump at the chance when we call to accept them once we have space. I have always taken care of children on Medicaid, (it used to be 50% of my practice) but now I have to limit the number due to healthcare changes in the last 7 years.
These DPC practices charge $10/month and offset the cost of caring for children by having the adults pay up to $60/mo. I don’t take care of adults, in general, so do not have the balance of patients that a family doc would.
As far as the medications costing less, physicians (including myself) can buy them at wholesale from various companies. Those of us who do that, can provide them to patients at cost. This is how it used to be done in physicians offices.
Medicaid came first. The issue is hospitalization, and that’s why Medicaid recipients keep Medicaid. DPC doesn’t address the hospitalization cost. Huge infrastructure and unparalleled mechanisms for getting income-qualifying people signed up also keeps Medicaid flush with beneficiaries, and sign up centers get bonuses! There isn’t a marketplace competition. That doesn’t mean their health will get better or that they will comply with the government mandates. As we know, the nation is sicker despite throwing dollars at this entity. The ER will see them for free, without an appointment. And you and I will foot the bill. But we’re going bankrupt.
https://www.medicaid.gov/medicaid/benefits/list-of-benefits/index.html
Keep in mind also that “the poor” on Medicaid often have income that isn’t reported to the IRS, so many of them have disposable income for a higher quality level of medical care. Hairdressers, contractors, waiters, etc. But for a bigger example: pregnant woman gets on Medicaid to cover the L&D 100%. The baby is born and leaves the hospital already enrolled in Medicaid. Vaccines, well child visits, dental, hospital… all for “free” to that beneficiary. So for pediatrics it’s an uphill climb. But for a 45 year old lawn guy on Medicaid, he may pay $100 a month for his family to get DPC care–conveniently in one place with doctors that speak to him and don’t wave a bunch of forms in his face (as is done at Rural Health Centers with Medicaid enrollees, I know because I used to work at one).
But as you say the DPC saves people so much money why would they even need Medicaid?
Because pediatrics in a rural setting= Medicaid, and Medicaid recipients cannot go outside the system to get care, unless it’s cash and not tracked or trackable. Kids in a rural setting suffer big time. Kudos to Dr. Al Agba for keeping her lights on.
Generic drugs can be purchased very cheaply from wholesalers and the costs savings passed on to patient. In fact my local supermarket offers FREE amoxocillin and Bactrim antibiotics as a loss leader. The thinking is yes they cost you $0 but you’ll probably buy some Coke and a sandwich while waiting. You’re SOL though if you’re allergic to both…
Niran, why would it not work for pediatrics in rural setting if it’s so good?
“So many patients can afford DPC that both local DPC practices are completely full with waitlists that are more than 1 year long.”
That’s part of the “tapeworm” of DPC, it takes a PCP shortage and makes it worse by turning it into an exclusive club membership. Where do all those “waitlisted” patients go for treatment? You have opined about the growing PCP shortage, especially in rural America.
Interested on why the drug cost is supposedly less? That may be because they are now cash pay.
There will always be tapeworms in every system. If patients can directly pay physicians, or contract with them, then the tapeworms have less to suck on though huh?
Dr. Palmer – you are right. Great explanation for the difference between DPC and CPC. Thank you.
Glad you asked this question Peter. So many patients can afford DPC that both local DPC practices are completely full with waitlists that are more than 1 year long. At $60/mo, $100/family, its the deal of a century. Amoxicillin costs $2. A parent of one of my patients with diabetes said he is saving $300/mo on medication now that he and his wife are DPC.
The argument that rural patients cannot afford it is getting stale… it should be “rural patients cannot afford not to be DPC.”
I cannot speak for other docs but for myself, I am not looking to increase my income. I learned to be frugal a long time ago. I do want to reduce my workload, but right now the need is too great. DPC is not well suited for pediatrics in a rural setting. The reason DPC in my opinion is not insurance is that is does not replace insurance. It is a form of membership healthcare and provides 80% of the patient needs.
As for the “tapeworm”, my point is that third party payers are sucking the money out of the system. Physicians and patients are required in the relationship — everyone else outside of that could be called a parasite. 🙂
aka, “Free Rider”
With CPC, your incentives are to do as little as possible for your patient–and still be minimally satisfactory to your payer so that you remain on the panel.
With DPC, your incentive is to keep the patient happy and healthy, all the while keeping him coming back, building good community word-of-mouth public relationships, and furthering your business plan.
The latter incentives seem better and are more lofty and altruistic than the former.
This illustrates well the singular problem of the third party in health care.
Niran, how many of your rural patients can afford the DPC fees? How will it let you see more patients?
Let’s face it, docs are looking to increase their incomes (beyond Medicaid/Medicare) while reducing their work load (beyond insurance) – why is that not a “tapeworm”? And why is the shared risk of a DPC model not an insurance model?
A small group of physicians who agree to collectively share the resources contributed monthly by a larger group of “patients” has an obligation to actively reconcile their honest differences of opinion as to “how best” to offer their health care to the group of patients. The problem of the Free Rider either among the physicians or the group of patients will always exist. The physician issue will always work best if they monitor each other. All of the research underlying Common Pool Resource issues supports this rule.
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This rule is the primary reason why “value based” reimbursement will never work. Nobel Prize honoree Professor Elinor Ostrom spent her entire academic career to establish the “Design Principles for Managing a Commons (common pool resource)” successfully. Its important to remember for Primary Healthcare that a person’s health is the ultimately the responsibility of the person. There are very isolated, but very important, temporary exceptions to this rule for which a physician group should periodically discuss to maintain a consensus. This especially applies to phone calls for medical TRIAGE, symptomatic prescriptions, referral choices and chart audit processes.
Unfortunately, post-graduate medical education does not usually help a physician to understand and engage the benefits of the group interaction process for resolving the alternate points-of-view for clinical situations characterized by a high level of multi-dimensional uncertainty. There currently is very little in the way of awareness of how inadequate many physician perceive their skills when first encountering full-time employment after finishing their Post-Graduate medical education.
As a independently-minded doctor surely you agree that there are doctors who are tapeworms or tapewormlike as you might put it ; )
And hurt the system in the same way as the actors (pharmas, pbms, insurers, other usual suspects et al) on the list you’ve helpfully provided ..