Study: Massachusetts Should Embrace Direct Healthcare Options

Share on Facebook
Share on Twitter
Share on
LinkedIn
+

RevCycle Intelligence: Direct Primary Care Increases Patient-Centered Care Access

Approach to investing in primary care yields lower costs, greater efficiency and increased patient satisfaction

BOSTON – Especially in the COVID era, many are looking to alleviate the increased burden on the healthcare system.  One solution is direct healthcare (DHC), which can provide more patient-centered care at affordable prices and is an effective model to increase access to care for the uninsured, underinsured and those on public programs like Medicaid, according to a new study published by Pioneer Institute.

“This approach to investing in primary care has been shown to reduce costs, emergency room visits, inpatient care and visits to specialists, all while increasing patients’ satisfaction with their care,” said Josh Archambault, co-author with Greg George of “Direct Health Care Agreements: A New Option for Patient-Centered Care That Costs Less and Reduces Provider Burnout.

Under DHC, patients pay practices a set monthly fee that covers a prearranged universe of services.  It is most common in primary care, but can be used for other types of care such as physical therapy, behavioral and mental health, and dentistry.  There are currently 1,200 direct primary care (DPC) practices in the U.S., at least 16 of which are in Massachusetts.

For primary care, patients begin by choosing their provider, then purchase a complementary insurance plan.  They can usually buy a much less expensive plan with a higher deductible because they have access to so many services through DPC.

DPC agreements commonly include:

  • Unlimited office visits
  • Home visits
  • Same- or next-day appointment availability
  • Longer visit durations
  • Annual physicals
  • Vaccinations
  • Routine lab tests
  • Stitches and splintering or casting of fractured or broken bones
  • Help navigating the rest of the healthcare system
  • 24/7 emergency triage support

Some agreements include access to generic prescription drugs at near wholesale prices.  Many DPC physicians give patients their personal cell phone numbers.

In 2018, nearly 80 percent of DPC subscription fees were between $51 and $99 per month, and costs have been stable over time.  About 60 percent of patients who belong to a DPC practice have an annual household income of $95,000 or less.

One DPC provider shared the story of an uninsured 30-year-old man who pays $648 a year for access to the direct primary care practice.  Since joining the practice the patient has suffered from a serious sinus infection, recurrence of cellulitis with abscesses that required draining, had multiple musculoskeletal injuries due to a car crash, and needed an x-ray for a possible femur fracture.  The only additional cost to the patient for treatment of all these ailments was a $60 x-ray and inexpensive antibiotics.  All other care was provided for under the $648.  If he had sought care at the emergency room for any of the ailments, his bill for one visit would have been two or three times that amount.

There are no deductibles, co-pays or third-party insurance claims.  The transparency and lack of surprise bills address the issue of those who don’t see their doctors because of uncertainty over the cost.

DPC patients have an average of four, 35-minute visits a year with their physician.  Under the typical fee-for-service model, patients have 1.66 visits annually and spend around 15 minutes per visit with their physician.

DHC also results in far less physician burnout. “Status quo” providers currently report spending around a third of their day on administrative tasks, by contrast direct care providers spend much more time with patients because there is no paperwork to fill out for insurers.

DHC could help a number of patient groups.  Access to same- or next-day appointments could be particularly helpful to MassHealth members.  Pre-pandemic, the average wait for a doctor’s appointment in Boston was 50 days, and many providers don’t accept Medicaid.

Older adults on Medicare who often have trouble finding transportation to medical appointments could benefit from the home visits usually included in DPC agreements and from the more personal management of chronic illnesses that comes with longer and more frequent appointments.

A study published in the American Journal of Primary Care found that a small subset of direct health care arrangements studied resulted in a $119.4 million decrease in preventable hospital use in these practices in New York, Florida, Virginia, Arizona and Nevada.  Over 90 percent of the savings – $2,551 per patient – came from Medicare patients.

DHC also offers an innovative option for small businesses.  Superior Packaging and Finishing in Braintree saved $370,000 in a year, or over $4,300 per enrolled employee, when the company switched to offering a DPC plan to its employees.

Archambault urges the Commonwealth to take four steps to embrace DHC:

  1. Division of Insurance guidance should be updated to match 35 other states by clarifying that any form of direct care should not be regulated like insurance. If there was clear support, the Legislature could codify this standard.
  2. The Group Insurance Commission should embrace direct health care arrangements for public employees and offer it as a lower-cost option.
  3. MassHealth should explore DHC arrangements, especially for some of the sickest patients on the program.
  4. The Legislature could consider requiring that insurance companies offer at least one product to consumers that wraps around DHC arrangements, especially DPC. This reform would introduce a new, less-expensive option for consumers, as the product would have a higher deductible than most plans currently offered in Massachusetts.

About the Authors

Josh Archambault is a Senior Fellow at Pioneer Institute. Prior to joining Pioneer, Josh was selected as a Health Policy Fellow at the Heritage Foundation in Washington, D.C. In the past, Josh served as a Legislative Director in the Massachu­setts State Senate and as Senior Legislative Aide in the Governor’s Office of Legislative Affairs. His work has appeared or been cited in outlets such as USA Today, Wall Street Journal, The New York Times, Fox News, NPR, Boston Herald and The Boston Globe. He is the editor and coauthor of The Great Experiment: The States, The Feds, and Your Healthcare. Josh holds a Master’s in Public Policy from Harvard University’s Kennedy School and a BA in Political Studies and Economics from Gordon College.

Greg George is the health policy and state affairs advisor for the Mackinac Center for Public Policy.  Prior to joining Mackinac, Greg served as a senior research fellow at the Foundation for Government Accountability. He has also been a policy advisor for the Michigan House of Representatives and legislative director for the Michigan Speaker Pro Tempore. He holds a Bachelor of Science in Finance from Hillsdale College and a Master of Business Administration from Western Michigan University.

About Pioneer

Pioneer’s mission is to develop and communicate dynamic ideas that advance prosperity and a vibrant civic life in Massachusetts and beyond.

Pioneer’s vision of success is a state and nation where our people can prosper and our society thrive because we enjoy world-class options in education, healthcare, transportation and economic opportunity, and where our government is limited, accountable and transparent.

Pioneer values an America where our citizenry is well-educated and willing to test our beliefs based on facts and the free exchange of ideas, and committed to liberty, personal responsibility, and free enterprise.

Get Updates On Our Healthcare Research and Events!

Related Posts

Transformative Medical Therapy Will Require New Cost-Benefit and Pricing Models

Current regulations increase development and manufacturing costs,…

Genetic Therapy Revolution: Benefits and Barriers for Medicine’s New Horizon

Joe Selvaggi talks with neurobiologist and writer Dr. Anne Sydor about the potential for gene therapy to address deadly and debilitating diseases and how current health care models must adapt to encourage this nascent technology.

Boston Children’s, MGH Among Massachusetts Hospitals with Highest Relative Commercial Prices

Pioneer Institute's new tool, the Massachusetts Hospital Relative Price Tracker, displays relative price and facilitates relative price comparisons among hospitals. The average price among all hospitals will have a relative price of 1.0. A relative price of 1.5 means that a hospital charges 50 percent higher than the average of all Massachusetts hospitals. Similarly, a relative price of 0.84 means that a hospital’s prices are 16 percent below average. Relative price data is collected and reported by the Commonwealth’s Center for Health Information and Analysis (CHIA) and is an aggregate measure used to evaluate price variations among different hospitals. It is recalculated annually based on data collected from commercial payers and includes information on private commercial insurance and commercially managed public insurance products such as Medicare Advantage and Medicaid Managed Organizations/Accountable Care Partnership Plans.

Middlemen Pushing Up Retail Costs of Drugs

The reality is that non-price factors, including several players, are causing net prices to decline and retail prices to increase. Those players include employers, health plans, and pharmacy benefit managers (PBMs), all of whom have continuously circumvented the system through loopholes and complicated systems of reimbursement that tend to hurt patients

Telehealth Progress Slowed in 2023

A new report by Cicero Institute, Pioneer Institute, and Reason Foundation reveals worrying stagnation in state-level telehealth expansion efforts in 2023, with only a few exceptions. Progress made during the pandemic is being lost even as provider shortages worsen, raising concerns about patients’ access to care.

‘High’ U.S. Drug Prices Mask Freeloading by Other Nations

The drug company’s choice is to walk away from millions in revenue from a given country and deny their people a lifesaving drug, or swallow hard and accept an unfair price that is nowhere near the drug’s value. For the sake of shareholders and patients, drug companies typically accept the unfair price and devote the revenue to offsetting their previous investments. In short, other nations are freeloading off of American R&D.

Drug Discount Distortions: How Middlemen Increase Costs and Reduce Access

Joe Selvaggi talks with Drs. Bill Smith and Robert Popovian about how the complex system of rebates from drug companies to insurance firms serve to increase costs and reduce access for patients.

Opinion: Drug patents aren’t a ‘necessary evil.’ They save lives.

Drug patents are one of the most important public policy innovations in all of human history, and a boon to patients awaiting cures. Inventions only come when inventors are rewarded, not punished. Patents are not a “necessary evil.”

Study: High List Prices and Deep Discounts for Prescription Drugs Hurt Poor and Sick Patients

A new Pioneer Institute study illustrates how the current system of drug pricing and discounts leads to patients with challenging diseases being charged huge out-of-pocket sums to keep other premiums low, effectively imposing financial penalties on the sick to protect the healthy and wealthy.

Out-of-Pocket Pirates: Spotlight on Accumulator & Maximizer Programs

A new white paper, "Out-of-Pocket Pirates: Pharmacy Benefit Managers (PBMs) and the Confiscation of Copayment Assistance Programs," examines how the way these programs are implemented is having negative impacts on patients living with serious diseases.

Study: Massachusetts Should Join 45 States and Allow Prescribers to Dispense Medications

A Pioneer Institute study shows that middlemen—commercial pharmacies and pharmacy benefit managers—add substantial costs over wholesale prices. Allowing prescribers to dispense routine drugs would save consumers money without compromising safety.

As COVID-19 Emergencies Ease, Some Progress on Telehealth Rules

A new report from Reason Foundation, Cicero Institute and Pioneer Institute rates every state’s telehealth policy for patient access and ease of providing virtual care. The report highlights telehealth policy best practices for states.

First-of-Its-Kind Interactive Mapping Tool Reveals Extent of For-Profit Entities Benefitting from the 340B Drug Pricing Program

Today, Pioneer Institute released a first-of-its-kind, 50-state mapping tool and database highlighting the troubling way in which hospitals and covered entities leverage unlimited pharmacy contracts under the 340B Drug Pricing Program.

Shopping Hospital Value: Price Transparency Mandate Brings Market Forces to Medicine

Hubwonk host Joe Selvaggi talks with Pioneer Institute's senior healthcare fellow Barbara Anthony about her recently released paper, Massachusetts Hospitals: Uneven Compliance with New Federal Price Transparency Law, and how price transparency can empower consumers to shop for better value and encourage hospitals to offer more competitive costs.

Survey Finds Spotty Compliance Among Hospitals with Federal Price Transparency Law

A 2019 federal law requires hospitals to make prices for 300 shoppable services available online in a “consumer-friendly format,” but a Pioneer Institute survey of 19 hospitals finds that information on discounted cash prices—the price most likely to be charged to consumers paying out of pocket—was unavailable at seven of those hospitals.

Right To Save: Paying Healthcare Consumers To Shop For Value

This week on Hubwonk, host Joe Selvaggi talks with healthcare policy expert Josh Archambault about the findings from his Cicero Institute report, The Right to Save: The Next Generation of Price Transparency. He outlines how to incentivize healthcare consumers to utilize price information to reduce out-of-pocket costs, and lower healthcare costs for everyone.