An insurance-free primary care "direct medical home" that requires patients to pay low monthly fees, but gives them 24/7 access and cheaper healthcare costs has the potential to save hundreds of billions of dollars if it's included in the national healthcare reform model, one advocate says.
Norm Wu is CEO of Qliance Medical Management, Inc., which operates one direct medical home that employs nine physicians serving about 2,500 patients in Seattle and has hopes to expand nationally. Even though their numbers are small, Wu is an unabashed enthusiast. He says the direct medical home model on a national scale could save patients and employers $300 billion to $500 billion a year "in hard-dollar, upfront savings" largely in the form of lower health insurance premiums.
"With that savings, you can provide comprehensive health coverage for every man, woman, and child in America," Wu says. "But it is hard to get that message out. People consider insurance synonymous with healthcare and it's hard to break out of that box."
Wu insists that the direct medical home model is not another form of concierge medicine that cherry picks healthy patients and shoos away the chronically ill. "We don't like that term because it smacks of elitism. We provide concierge-level service at prices that everyone can afford," Wu says.
"The people who are really attracted to us are the high utilizers," Wu says. "If you have a chronic illness we are a God send. For a flat monthly fee, you can see us as many times as you need to. We are available for phone conferences and e-mail. There is 24/7 access."
"We also have a lot of people who are reasonably healthy," he says. "They don't get sick that often, but they are health conscious so they want preventive care and when they do get sick they want to see a physician who knows them as soon as possible."
For monthly fees ranging from $39 to $79 depending upon age, Wu says Qliance patients get unrestricted primary care for vaccinations, checkups, pneumonia, minor fractures, women's health exams, and ongoing care for chronic illnesses, such as diabetes, hypertension or obesity. No one is denied care for preexisting conditions, there is same- or next-day service for urgent care, and visits with salaried, physician-employees can last 30 minutes to an hour.
Medicare/Medicaid/SCHIP patients are accepted; their coverage is not.
Lab tests, pharmacy, and durable medical equipment are not covered by the monthly fee. Instead, Wu says Qliance "passes on our wholesale costs, so there is no incentive for us to be pushing stuff off on patients that they don't need." The patients' higher out-of-pocket expenses for ancillary care are offset, Wu says, by the savings of 40% to 50% for patients, and 20% to 35% for employers when they swap their low-deductable, high-premium health insurance for either high-deductable or wrap-around coverage.
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."