Direct Medical Home Offers Healthcare Without Insurers

Robert Zirkelbach, spokesman for America's Health Insurance Plans, says the industry trade group doesn't have "any thoughts yea or nay" about direct medical homes, in part, because "there aren't that many of them either."

"There are a small number of physicians who choose not to contract with health plans and that is fine. But the majority of people are participating in health plan networks and they're reporting high satisfaction," he says. "People want peace of mind so that if they have a serious accident or illness they have financial protection and coverage for their medical bills, and that is what health insurance provides. That desire of individuals and families is not going to go away."

Wu says direct medical homes make "the best partners" with health insurance companies. "It allows them to do what they do best, which is to diversify risk," he says. "If they are selling an insurance product and their customer has us on the front end, their payout is going to come down substantially."

While insurance companies might lose money from premiums when their customers switch to high-deductable plans, Wu says insurance companies shouldn't get too upset because they "don't make the money on the low-dollar, transaction value, routine visits that primary care provides."

Wu says the direct medical home model is an attractive alternative for primary care physicians who've become burned out by decades of haggling over insurance claims that don't even cover costs.

"We have several physicians with us who were looking at early retirement because they couldn't stand the hamster wheel existence with the insurance world," Wu says. "Reimbursements at primary care are so low and the overhead is so high, you've got to see 25-30 patients a day to cover the overhead. They can't spend the quality time they want to with patients."

He says that any national healthcare reform effort that doesn't take low reimbursements and high hassles of primary care delivery into consideration will make matters worse. "If you just expand insurance to another 50 million people that don't have coverage now, instead of seeing 25-30 patients a day, primary care physicians are going to be asked to see 40-50 patients a day," he says. "It is going to accelerate the exodus of primary care docs."