Obamacare is severely holding DPC back from succeeding

Editor’s Note: Welcome to Medical Economics' blog section which features contributions from members of the medical community. These blogs are an opportunity for bloggers to engage with readers about a topic that is top of mind, whether it is practice management, experiences with patients, the industry, medicine in general, or healthcare reform. The series continues with this blog by Anish Koka, a cardiologist in private practice in Philadelphia. The views expressed in these blogs are those of their respective contributors and do not represent the views of Medical Economics or UBM Medica.

Dr. KokaIn a world created by nonphysician administrators where 15 minutes per patient, 30 patients per day, little ancillary support and the constant threat of litigation is mixed with declining reimbursements and high debt loads, it comes as little surprise that primary care physician burnout and suicide rates are among the highest of any occupation.

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The answer to this lament helpfully provided by health policy analysts who have spent little or no time in actual practice is to reimagine the physician as a population health master who leads a team with healthcare coaches, personal trainers and masseurs connected to patients via some high-tech wearable device providing data no one has the inclination or time to look at.

As the physician-patient relationship has been eroded by employment that turns physicians into shift workers, patients are increasingly forced to single-handedly navigate a healthcare system that becomes increasingly complex.

A much better solution to this problem would be a model that allows more time for patients and liberates physicians from a reimbursement climate and overhead costs that minimizes physician-patient interactions and incentivizes patient throughput. 

It is within this space of unhappy patients and physicians that Direct Primary Care (DPC) has risen to prominence. DPC typically involves a direct payment between patients and physicians, usually in the form of a subscription service that may range from $50 to $100 per month.

Physicians in this arrangement do not bill insurance and offer same day/next day access, and frequently include the cost of other medical services, such as labs and immunizations, as part of the monthly fee.

Further reading: As insurers leave Obamacare exchanges, doctors pay the price

The math isn’t complicated: 600 patients paying $100/month would translate to $720,000/year of gross revenue, with no need for the overhead normally related to collecting payments from insurance companies. A panel of 600 patients also returns the gift of precious time stolen from physicians and patients.

Unfortunately, this reasonable model is opposed by a phalanx of current policy makers for a very good reason: A successful DPC model makes the current version of the Affordable Care Act (ACA) even more unworkable than it already is. In defense of the designers of the ACA, there are 20 million people now covered that did not and mostly could not get health insurance in the past.

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Unfortunately, the ACA fails at most everything else. Insurance premiums and deductibles continue to rise and insurers continue to flee the marketplace leaving fewer, more expensive options for the consumer. This has as much to do with who is signing up for the ACA coverage as it does with who isn’t signing up for the ACA.

Health insurance rests on the idea of large number of healthy patients paying for the sick among us-and so the initial idea of pooling risk among the nearly 40 million uninsured to allow for affordable healthcare was sound.

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Regrettably, bending to political realities and constituencies meant coveted young healthy patients are allowed to slip through the cracks, leaving only the sicker and poorer behind. Insurers, faced with a sicker risk pool than expected, are forced to exit the marketplace or raise premiums. By directing potentially young healthy patients out of the ACA risk pool, DPC would make what is a bad situation for insurance companies even worse.

Yet another problem with the ACA-DPC relationship relates to the minimum healthcare benefits mandated by the reform law. DPC is not an end-to-end solution because it only provides for ambulatory services, while visits to specialists, hospitalizations and major procedures are not covered.

This can only work if DPC is paired with a “catastrophic,” usually high- deductible health insurance plan. The current ACA policy for health insurance does not like this one bit because the ACA mandates minimum essential benefits like prescription plans and laboratory benefits that catastrophic high deductible plans don’t provide. This is an expensive proposition. As a result, the cheapest plan available to the 40-year-old with no medical history, and who doesn’t qualify for a federal subsidy based on income is  around  $3600/year with a deductible of nearly $6,000.

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This same 40-year-old would have to pay his or her DPC physician in addition to the cost of the insurance plan. Using pre-tax health savings accounts (HSAs) would seem to provide an answer that works within the current system, but this would be too easy, make too much sense and cut out your friendly insurance company from the $3 trillion-dollar trough we as a nation spend on healthcare.

Inexplicably, payments to physicians in DPC are not considered a “qualified medical expense,” and therefore ineligible to use with an HSA. So that means the internal revenue code recognizes chiropractors performing spinal manipulations for the treatment of coronary artery disease, but considers payments to physicians participating in DPC inappropriate.

Next: Working on legislation to better the relationship

Direct primary care advocates have been working for legislation to allow the health insurance marketplace to accept DPC. Admirably, they have had success with 16 states recognizing DPC.

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Unfortunately, it is an uphill battle. Governor McAulliffe (D-Virginia) recently vetoed a bill that would have given some legal cover to DPC physicians by explicitly noting that these arrangements between physicians and patients were not insurance, and thus could co-exist with other traditional insurance plans.

McAuliffe, a former national political Democrat insider with ties to folks that would benefit from Medicaid expansion, not surprisingly believes the answer to our current healthcare woes is an expansion of Medicaid.

Even without having to deal with the political machinations that seem to drive policy, the simple fact is that the ACA in its current form has great difficulty co-existing with Direct Primary Care. Those interested in a real fix to the travails facing physicians and patients can only hope that the too-big-to-fail ACA actually fails.

Anish Koka is a cardiologist in private practice in Philadelphia trying not to read the writing on the wall.  Follow him on twitter @anish_koka.