The U.S. Supreme Court ruled on Jun 28th by a 5-4 vote to let the individual mandate portion of the Affordable Care Act (Obamacare) stand. Immediately following, a CEO of one of the nation's largest insurance companies was asked if people can expect their premiums to go up as this law is implemented. The answer was yes. So what can employers do to protect themselves from the inevitable?
One strategy for driving market incentives back into the healthcare system and driving down costs is called consumer-driven health insurance, and it is growing in popularity. Historically, the consumer or patient has had very little monetary skin in the game when it comes to the cost of healthcare. We go to the doctor and pay our copay, and never have to worry about what it really costs for health care.
Many employers are now trying to incentivize their employees to be as prudent a purchaser of health care as they are of any other product or service. And they’re doing this by offering highdeductible health insurance policies combined with health savings accounts, or HSAs.
For the 50% of patients who collectively spend only 3.5% of all healthcare dollars, it's a fantastic alternative. Instead of paying the high premiums for a lower-deductible plan to the insurance company for care you don’t use — that's money that goes out the window unnecessarily — you can store the money away, accumulating it every year until a health event occurs when you really need it.
To be sure, a big drawback to these high-deductible insurance plans is the negative impact they can have on the 5% of patients who spend 50% of all healthcare dollars. Many worry that high-deductible plans will increase the total cost of healthcare because those with chronic healthcare problems won't get the help they need until their condition gets so bad that they are forced to seek help — when obviously the cost will be much greater. They have a very valid point.
Direct Primary Care
One solution to this problem is a new type of primary care called "Direct Primary Care." Under this arrangement, patients struggling to manage multiple chronic health conditions pay their physician a flat monthly fee, usually $100 to $150 a month, for all their primary care needs. This pays for all office visits and office procedures, and the insurance company only gets billed when a specialist is involved or when the patient goes to the hospital for surgery and other more serious procedures.
Direct Primary Care seems to work well for both patients and physicians because it gives the doctor a financial incentive to do everything he or she can to keep that patient as healthy as possible. Instead of the usual 10 minutes per patient, the doctor will often spend an hour or more with the patient, especially initially, to really understand his or her problems. Initial assessments can often last several hours, during which the doctor does a detailed patient history and assesses the complex social and emotional factors affecting the patient's health. No time is spent billing the insurance company.
Remember, under our current bill-for-procedures health care system, most primary care physicians have thousands of patients in their practices and must see each one as quickly as possible in order to bill enough office visits and procedures to earn even half the money earned by a specialist like a cardiologist. In contrast, a Direct Primary Care physician needs only about 500 patients in his or her practice to make a good living, and because of the lower case load, these patients now have much greater access to the physician.
Face-to-face appointments last as long as is needed, and the doctor is completely familiar with the patient's needs and life challenges. The physician now has the time to educate, to motivate, and to focus on helping the patient make the behavioral changes that are oftentimes so crucial to his or her well-being — stopping smoking, for example, or losing weight and eating better.
When a referral to a specialist is needed, the Direct Primary Care doctor calls the specialist ahead of time to discuss the patient’s situation and then spends time discussing the patient's follow-up needs with the specialist after the visit. Truth be told, this is the kind of healthcare that most physicians want to practice — it's the reason most of them went into medicine in the first place.
In the new book, "The Future of Health-Care Delivery: Why It Must Change and How It Will Affect You", author Stephen C. Schimpff, MD, tells the story of one chronically ill patient who went from needing 23 different prescriptions from four different doctors, to needing just seven prescriptions — all because one Direct Primary Care doctor took the time to examine the patient’s needs closely and coordinate his care. The patient's health and quality of life improved dramatically as a result.
I know of a Direct Primary Care physician in my own Salt Lake City area who spent many years as a traditional physician. Frustrated by having to see patients for only minutes while having to spend hours fighting with their insurance companies, he took a sabbatical. After seeing a television story about Direct Primary Care, he realized that's the kind of medicine he'd always wanted to practice, so he set up his own Direct Primary Care office.
Each month, this doctor invites his patients to join him for a healthy free lunch, where he teaches them about this marvelous miracle called the body and how to take care of it. Who says there's no free lunch? This doctor makes great use of them to incentivize his patients to learn how to stay healthy.
There is a lot that employers can do to curb the inevitable cost increases projected as a result of the implementation of the Affordable Care Act. Employers are in a pivotal position to drive market incentives back into healthcare in an effort to slow down future increases. Consumer driven health insurance is just one of many strategies employers can use.
Darrell Moon is CEO of Orriant , a wellness program provider.