Could Ditching Health Insurance Transform Physician Practices?

A new approach to practice management could reduce cost and utilization and enhance patient care.

An Atlanta physician practice management startup suggests it has figured out how to get primary care physicians out of the business of managing insurance and return to the practice of medicine.

HIPnation removes insurance companies from the doctor-patient equation. Its approach claims to reduce costs and enhance patient care, yet unlike concierge medicine, it says it also changes the health delivery system. In addition to owning or partnering with primary care practices, the company has established a local network of specialists, plus laboratory, imaging, and pharmacy services. The service model:

• Limits a physician's case load to 700 patients (compared to 2,000+)
   
• Proposes to reduce cost and utilization of health care services
   
• Has the potential to diminish hospital readmissions after discharge
   
• Offers price transparency

Practice management experts HealthLeaders contacted to provide outside perspective about this model, who are members of the HealthLeaders Population Health Exchange, found HIPnation has compelling elements for physicians, patients, and small businesses, as well as the potential to reduce costs.

But, while praising the concept, they also expressed concern about the narrow breadth of the network and potential issues with some types of nontraditional insurance—unrelated to HIPnation—which patients might obtain from an outside source.

How HIPnation Works

HIPnation founder and physician Brian Hill, MD, says that as soon as he emerged from his residency, he noticed that "healthcare had become more about the industry that was built around it than [healthcare itself]. I didn't like that."

In his spare time, the urologist spent the next couple of decades researching ways to fix the system. Eventually, with the help of an attorney and other physicians, HIPnation was born.

He points to health insurance as one of the primary reasons the system is failing. "It just drives everybody's cost up," he says, "and distracts physicians from the patients."

HIPnation was founded in 2016 and began buying or partnering with physician practices last year. Currently, there are 10 primary care physicians, three pediatricians, and 100 specialists in the network. About 1,000 patients have become members.

The HIPnation model includes the following features:

• Patients pay a $100 monthly membership fee to select and access one of the company's primary care physicians who is available to them 24/7 via phone, text, secure video, office visits, and, in some cases, home visits.
   
• Members without insurance—or the companies they work for—may opt to purchase an indemnity health plan offered through independent brokers who are not affiliated with HIPnation. Rates are typically more affordable than traditional health plans and directly reimburse patients for care on a flat per-visit basis.
   
• Some members partner HIPnation with a sharing plan, like Medi-Share.
   
• Other members have traditional insurance and choose to pay membership fees and other expenses out-of-pocket on top of their premiums.
   
• In addition, by enrolling in an affiliated association for $5 a month, members satisfy ACA individual mandate requirements, although that requirement and the associated penalty will disappear in 2019.

Separating Healthcare From Health Insurance

To create a deeper connection between providers and patients, HIPnation separates the concept of healthcare from health insurance.

Most patients using HIPnation have health insurance—but not necessarily traditional coverage. It requires a change in mindset that is analogous to the way the American public thinks about car insurance, says HIPnation CEO Will Hall.

Car insurance covers expensive, infrequent events, like accidents, Hall says; "you do not use car insurance for your oil change or to get your tires rotated." By the same token, "you don't really need health insurance to manage a sinus infection or poison ivy, but you need it if you have cancer, or a car accident, or a tree falls on you."

"We are not insurance and not trying to be," says Hall. "We provide healthcare services, and we put insurance in its proper place for high dollar, low frequency events."

Patients Take Responsibility for Insurance Coverage

Separating the connection between providers and health insurance puts the onus on the patient to ensure they have the right type of coverage, particularly if a catastrophic event occurs, experts say.

This could lead to problems if a patient doesn’t have the right type of coverage, doesn't understand the details of a nontraditional plan, or expects reimbursement for HIPnation membership fees and other out-of-pocket costs through a traditional plan.

"Mixing insurance with a program like this can be complicated," says Mark Wagar, president of Heritage Medical Systems in Palm Springs, California. The organization is an affiliate of the Heritage Provider Network that serves more than a million patients in integrated, population-based health quality payment programs through medical groups and independent practice associations in California, New York, and Arizona.

He also is former president and CEO of Empire BlueCross BlueShield in New York City.

Another expert agrees. "Traditional insurance will have a larger network and healthcare options, and care coordination services, as well as contracted hospital and pharmacy discounts," says Frank Astor, MD, MBA, FACS, chief medical officer of NCH Healthcare System in Naples, Florida.

Astor formerly served as medical director of BlueCross BlueShield of Florida and chief medical officer of Triple S-BlueCross BlueShield of Puerto Rico. In addition, he says, "Traditional carriers have contracted fees with hospitals and large practices, and, as part of their network, accessibility nationwide."

These benefits translate to what Astor characterizes as challenges for patients who select nontraditional insurance plans: "small networks, lack of fee discount contracts with large providers and systems… and lack of care coordination or population health."

Cost, Limited Choice Create Market for Change

The problem, Hill points out, is that with rising premiums, many people, and the businesses they work for, can no longer afford to go the traditional route. Rates for the four carriers offering plans through Georgia's health insurance marketplace rose from 30.8% to 57.5% in 2018.

In addition, options for individual coverage in Atlanta, where HIPnation is based, are limited. Blue Cross Blue Shield of Georgia pulled out of the individual market last year, leaving only two carriers, whose rates went up in 2018.

A Model That Could Reduce Costs

HIPnation proposes its approach reduces costs to the healthcare system and increases efficiency in multiple ways:

• Patients have immediate access to their physicians, so they are less likely to visit urgent care facilities or emergency departments
   
• Physicians have time to focus on prevention, keeping patients healthy and providing better management of chronic conditions
   
• Due to a limited case load, doctors are intimately familiar with their patients' history and needs and can provide better guidance, thereby decreasing use of laboratory and imaging services
   
• Physicians can tap into HIPnation's network of specialists for same-day phone consultations, often resolving in a day what might otherwise take weeks to accomplish

According to a study published in the December 2012 edition of the American Journal of Managed Care, personalized preventive care provided through a concierge model does save money.

Patients were up to 62% less likely to be hospitalized, and readmissions for specific conditions were up to 97% less likely than patients not enrolled in this type of care. HIPnation's CEO says it shares the same commitment to personal care as the concierge concept.

The promise of HIPnation's cost savings caught the attention of an Atlanta hospital system that is exploring opportunities for alignment. Hall will not disclose the name of the system, but says the fact that HIPnation is attracting attention so early in its evolution demonstrates the value this approach provides to the greater community and the industry.

Astor agrees that HIPnation's approach has many benefits. "Advantages include [the] potential for lower fees and continuity of care by a primary physician focusing on wellness and prevention. It [also] can have utilization efficiencies and community support." 

A 180 for Physicians

The HIPnation concept could appeal to physicians who currently operate independent practices, as well as those who previously sold their operation to a health system. Dr. Robert Herrera falls into the latter category, leaving the Emory Healthcare system and joining HIPnation in May.

He experienced ongoing frustrations with the scheduling system and EMR. When approached about joining HIPnation, "it didn't take long to make up my mind," the internist says.

"This is really the way things should be done," says Herrera. In addition to enhancing patient care and satisfaction, "it actually saves money in the long run because you're able to keep patients healthier."

That's exactly what HIPnation's founder had in mind when he developed the model. Dr. Hill says he has lofty goals to also move his concept into specialty practices, particularly for consults, and remove health insurance "out of the outpatient space altogether. But it has to happen incrementally."

Astor predicts HIPnation "will be successful as long as monthly fees are competitive, local accessibility is efficient, and if it is able to cover pharmacy." (Editor's note: HIPnation does offer pharmacy in its network.)

"Finding ways to help patients be able to be more engaged with a good primary care relationship is important and can be rewarding for both the patient and the practitioner," says Wagar. "The value of this program will really depend on the details of how it works. In this instance, it may provide value through changing the practice to serve the select patients who can afford the fee—a choice some practices have made. But [it needs to be] scalable if an objective in our overall healthcare system long term is better, affordable, healthcare, and coverage across all patient types."