While one Washington fails to lead, another Washington steps up.
While the federal health reform gets a lot of media attention, in many ways the real action is in the “DIY Health Reform” movement driven by non-partisan entrepreneurs. For example, I outlined this prior to the State of the Union earlier this year – Mr. President: The Deficit Problem was Solved Last Week but for the Preservatives
For over three years, I’ve been writing about how a new care/payment model is increasingly disintermediating health insurance. This model is the only one I’ve seen that consistently eliminates 30-80% of unnecessary (and expensive) facets of healthcare. However, in order to be fully embraced by employers, unions and individuals, there has been a missing element — until now.
If Direct Primary Care is a new concept, before reading on, I’d encourage you to take a moment to read one or more of the articles linked to below.
- “David Clause” in Obamacare Ready to Slay the Healthcare Cost Beast
- Health Insurance’s $4.4B Bunker Buster
- Marcus Welby/Steve Jobs Solution to the Medicaid-driven State & County Budget Crisis
As these articles outline, DPC is a concept that has received broad support across the political spectrum. Not only is it included in Obamacare, it has been championed by vocal Obamacare opponents such as Rep. Bill Cassidy (R-LA) who is also a doctor himself.
[Contact me via LinkedIn if you'd like a copy of the full seminal study on the Direct Primary Care model]
Direct Primary Care’s Biggest Obstacle Removed
Despite the significant successes DPC has had, it has failed to gain widespread traction with employers. The biggest obstacle has been the lack of a wraparound insurance policy to complement what DPC doesn’t cover. But that is about to change.
The first health plan to build on the advantages and success of Direct Primary Care (DPC) is being launched in Seattle this month. The Employer Health Ownership Plan starts with a foundation of DPC and adds wrap-around coverage for specialty and in-patient care. The plan was designed by Physician Care Direct in partnership with several Seattle-area primary care networks including DPC pioneer Qliance, Family Care Network, and Puget Sound Family Physicians.
Although DPC has proven to reduce costs and improve the healthcare experience for both providers and patients, it has not been able to gain a significant foothold among employers as a stand-alone health plan offering. The EHOP builds on the significant strengths of DPC to offer a complete solution that allows any employer to provide comprehensive access to high quality primary care, provide coverage for specialty and in-patient care, all while utilizing its healthcare spend more effectively.
The plan utilizes a purchasing strategy that combines a monthly payment to compensate primary care providers for patients’ basic healthcare needs, with a captive-based self-insurance plan that allows businesses to reduce healthcare benefit costs while providing better overall coverage.
I’ve excerpted a portion of their press release below:
Direct Primary Care, an increasingly popular primary care model, is one in which patients or their employers pay directly for primary care providers who deliver comprehensive, accessible, high-quality primary care services and manage their patients’ healthcare across every care setting. This so-called “captive-based” plan allows participating employers to spread the risk of catastrophic costs across a pool of multiple employers. As a result, for the first time they can add Direct Primary Care to a single insurance plan that includes coverage for specialty and hospital care.
According to the US census bureau, nearly 40 million Americans – about one- third of the nation’s employed workforce – work for companies with 20 to 500 employees. These businesses are ideally situated to take advantage of the new insurance plan. Companies with 500 or more employees are typically already self-insured, allowing them to share in the savings when they help keep their workforce healthy.
In a report entitled “The Emerging New Workforce” it is predicted that 50 percent of new jobs that emerge after the recession will be contingent positions, and as a result “as high as 35 percent of the work force will be made up of temporary workers, contractors or other project-based labor.” In other words, with this new program that is a fit for small employers and the ability to sell directly to consumers, roughly two-thirds of the workforce could be addressed with this proven model.
In a follow-on piece, I will provide additional details on the program and report on how a household name insurance company that isn’t in healthcare yet is using this as an entry point into healthcare. They recognize the opportunity being given to them while the vast majority of health insurance companies are ignoring the most promising model that healthcare has seen in the last decade or two.