Colorado’s direct primary care bill: A better way to pay for healthcare?

Coloradans frustrated with the high costs of primary healthcare, take heed: A bill to protect a lower-cost model heads today to the state House floor after passing committee in both chambers.

Fed up with the administrative burdens of “fee-for-service” insurance billing, family doctors across the country increasingly are turning to a payment model called direct primary care, in which patients and their primary care physicians enter into payment agreements that eliminate the middleman of traditional insurance.

Much like gym memberships, direct primary care patients pay a monthly fee —it’s usually between $25 and $80, depending on factors like the patient’s age — in exchange for access to primary care services like consultations, lab work and clinical visits without insurance copays or deductibles. Proponents say the model reduces administrative hours and leads to lower costs.

The House bill defines how such agreements must work and makes it clear that direct primary care payment models are not insurance. The bill’s Senate sponsor, Democrat John Kefalas, says the bill will help ensure that the model is allowed to advance here in Colorado. Despite a growing popularity, the percentage of doctors offering direct primary care payment models remains very small.

There are currently more than 600 such practices operating in all but three states, and more than 10 percent of them are in Colorado.

The Affordable Care Act requires that patients purchase health insurance or incur a penalty, so direct primary care providers typically recommend that their patients also purchase insurance. But the model allows such patients to buy higher-deductible plans that serve more as stop-gap measures, knowing that they will be able to afford the majority of their routine visits and treatments.

“Use insurance for high dollar things, like hip replacements,” said physician and direct primary care provider Clint Flanagan during Senate committee testimony in late March. After providing both primary and emergency services for more than 15 years, Flanagan now provides care with direct primary care provider NextEra.

“I can tell you that this is a much better business model,” he says. For one thing, this model allows physicians to stop spending one to two hours a day billing, which he says, ”truthfully we shouldn’t be doing in family medicine.”

During the same Senate committee hearing, patient Eugene Agdelott described his recent struggle with multiple tumors in his face and head, the treatment of which required surgery, chemotherapy and radiation. Over the past few years, Agdelott has had three different insurance companies through the Affordable Care Act exchange and has thus had three different networks of doctors.

Moving around was frustrating, as many providers weren’t familiar with the background of Agdelott’s illness. With direct primary care, he says he now always has at least one physician who knows his complete medical history.

Agdelott says he has a gym membership, too, but says the importance of his medical coverage matters far more. “If I had to give up the gym membership or the direct primary care, I would give up the gym membership,” he says.

The Senate Business, Labor & Technology committee has passed an amendment to the bill clarifying that while Medicaid patients cannot enter direct primary care agreements, practitioners can still provide such patients care under the traditional Medicaid payment structure.

The House is scheduled to consider the amended bill on the floor today.

Photo credit: Naval Surface Warriors, Creative Commons, Flickr