In a word, no.
Insurance is a good thing. Insurance is used to cover the cost of an event for which we don’t want to or can’t pay out-of-pocket. For instance, we carry car insurance in part to cover the replacement price of a car in the event of a car accident. If my car is in a wreck and is undrivable I want to be able go buy another car. As a car goes down in value it becomes easier to replace and the car insurance coverage (collision anyway) goes down. At some point we may elect to drop coverage as replacing it isn’t hard because it doesn’t cost much. Also, we don’t generally carry insurance on minor things. For instance, when my son buys a used video game they offer an addition fee to cover accidents that might damage the disc. This is a form of video game insurance. If the game breaks for any reason they’ll replace it. Even though the fee is small, we never purchase the added protection for two reasons. First, it’s just a video game and he could live without it, but primarily because he can afford the $19 to buy a another one if desired.
Insurance is great at helping us protect against the financial loss of an unexpected costly event. However, it was never designed to cover the cost of things that are guaranteed to happen. You can’t buy gambling insurance because the house always wins. We all know that. In healthcare, primary care is virtually a given. Everyone will eventually need to see a pediatrician, an internist, or a family doctor. We all end up with a cough, a sprained ankle, or a question about our cholesterol. Yet we insure against that inevitability with a monthly premium and high deductible.
Admittedly, health insurance is more tricky than car insurance because it’s hard to say ‘no’ to something concerning our health. One of the basic needs is to have good health. In fact we have a saying, “Well, at least you have your health.” Modern health insurance takes all our health concerns from the minor sore throat to the appendicitis to the brain tumor and lumps them together in one big package of coverage. Do we really need to prepare against the expense of a strep test? We end up preparing against some tragedies while prepaying for others. The unexpected gets some protection while the expected only gets a price inflation.
We believe people have a basic need for food and offer many different community based and government run programs to help people obtain food who have been deemed at risk for not being able to buy it themselves. That may be the approach health care should take. We expect those who can to buy their own food and those who are unable we try to support. As such, food remains one of the lowest margin industries. The price of groceries is typically only 1.3% higher than the cost to provide the groceries. Our society has lots of grocery choices so it doesn’t tolerate high prices or poor service for very long. With healthcare many people feel stuck. They have one choice so neither the price nor the service matter.
The Direct Primary Care movement encourages all patients to be appropriately insured against health tragedies and certainly to obtain all the coverage required by law. However, DPC also realizes that it is cheaper to buy your healthcare directly when the chance you’ll need it is high and the cost of that healthcare is low. DPC wants insurance to be used for what it is always intended. I heard it said yesterday that ‘Catastrophic Insurance’ is an oxymoron because all insurance is by nature catastrophic. Let’s move health insurance back to that realm. Let it cover the catastrophe and leave the ordinary to the free market. The free market affords the best chance for the most people to get the care they need.
I going to provide two examples in two posts about the cost of primary care. First, I want to highlight what the true cost of ordinary primary care visits can be even for those with insurance. Second, I hope to show how difficult it is to determine the cost of care before a visit occurs. Lastly, I want to show how a Direct Primary Care program helps stabilize and lower the cost of ordinary care.
Steve is a 55 year old truck driver who is married and has two daughters in high school. He drives a local route so he’s home every night to help with home work. He works hard and never seems to have the time or energy to eat as healthy as he knows he should. Steve started developing high blood pressure years ago and was started on medication. After several years of watching his blood sugar climb and pant size grow he was diagnosed with diabetes and high cholesterol. Medications were prescribed for both disorders. His doctor has talked to him about “diet and exercise” and even offered to set up an appointment with Medical Nutrition Management but that hasn’t happened yet.
Here’s Steve’s problem. The best medical care available recommends regular visits with his doctor to discuss how to eat healthy, how to incorporate exercise, and to make sure his medications are doing a good job without any side effects. That seems like a tall order for the routine 15 minute visit. Steve wants to make every dollar count so he asks what the price of all this care is going to cost.
He knows that he will need at least four moderately complex office visits (billed as a 99214 for those in the know) this year to properly work on his health problems. He might need more depending on unexpected illnesses and complications that develop. At each visit it is recommended he get a few routine laboratory tests done including a HgbA1c, a lipid profile, a chemistry panel, a urine microalbumin (twice a year usually is good enough), and since his doctor is very proactive at managing diabetes an insulin level.
Let’s consider four possible scenarios Steve might have depending on the insurance he carries.
If Steve comes to Trinity Medical Associates and has a High Deductible Health Plan (HDHP) then
Four 99214 office visits charged at $133 each = $532
Charges for all the labs for the year are $232
Total charged price for the year = $764
His insurance has already negotiated a lower price that typically runs about 80% of charges.
So Steve pays $611.20 per year out of pocket with a HDHP for four visits and the associated blood work.
Steve needs to be commended for coming in four times in a year to get his health issues under control. The average adult in the United States only sees their doctor about 2.5 times a year. That’s not enough time to work on medical issues and that is why many patients see their health decline year after year. Additionally, Steve knows that any other visits will result in more medical bills so he might try to ignore the worsening heart burn and the nagging chest pain a little while longer.
If Steve comes to Trinity Medical Associates and has no insurance then you might think he will get charged a crazy high bill. In fact, Trinity’s administrative team diligently spent 2014 leveling the playing field for all un-insured patients. We jokingly call it The Fairness Act of 2014. The total charged price for the year is still $764 and, if Steve pays for each visit at the time of service, he is given the same 20% discounted rate that the insurance companies negotiated. As a cash payor, he receives the same benefit as anyone with insurance.
So Steve still only pays $611.20 per year out of pocket without insurance for four visits and the associated blood work.
Still though, any other visits will cost extra, and there’s good evidence to suggest people don’t come to the doctor as often as they should due to the fear of high cost. Maybe he’ll try another heartburn pill over-the-counter and see what happens.
If Steve seeks out care from a retail health care provider, urgent treatment center, or doc-in-the-box then there really is no telling what the prices will be. I’ve spent some considerable time researching prices in the community and most everyone doesn’t fully post prices online (in fairness, neither does Trinity for now but it is available if a patient needs to know). For instance, the Little Clinic in Kroger’s posts lab prices of $54 for the lipid profile alone with a consultation about the results costing extra. They don’t offer the other necessary labs for diabetes management. AnyLabTest Now! offers a Diabetes Panel for $99 which is a good start but doesn’t include the other recommended tests. Other labs would cost extra and, of course, there is no consultation, management, or discussion about the medical problems either.
So Steve doesn’t know how much it’s going to cost to get care from these facilities. In fact, no one knows until the bill comes. That’s part of the problem with our current system. Would you go buy a family meal or a buggy full of groceries without knowing the price first? Imagine the waiter saying “Just leave your credit card number with me and you’ll see the price in a couple days when the charge clears the bank.”
If Steve comes to one of Trinity’s new Direct Primary Care offices in Hardin Valley or Maryville then he knows the cost of his care before he ever steps foot in the office. We actually have posted these prices already. His monthly price would be $60. This would include all his visits that he needs to have his diabetes, high blood pressure, and cholesterol managed. It would also include all the blood work needed to understand how he was doing and measure his progress. We already saw that this would have cost him at least $611.20. On top of all that though he would be able to call or email the office to ask questions or come in an additional 21 times that year for no extra cost. We include 25 visits per year with the membership and offer further visits at $25 a piece. These visits would typically last 30mins each and allow for more time to cover any topic he needed not just his diabetes, hypertension, and cholesterol disorder. Maybe he could finally talk about that heartburn and chest pain too. So Steve pays $60 a month for an ongoing conversation about his health care that includes his office visits, phone calls, and emails as well as all the routine labs used to help him succeed. He has further access to discounted pricing on other labs and services as needed including the Medical Nutrition Management and Wellness Coaching. He could even get a package that includes VitalSigns gym membership and a subscription to VitalMeals which offers weekly recipes and grocery list delivered via email. These tools are just what he needs to fully engage his health problems and maybe even cure them. Perhaps he could even come off his medications and save even more money?
At the end of the analysis we have wonder in which scenario Steve would spend less money and get more time to talk about the health issues most pressing to him. Which scenario benefits Steve as the patient the most? Now, is this scenario true for everyone? Is every patient a Steve? Of course not, but for many patients they feel very much like Steve. They are stuck in a system of high premiums and low coverage with health concerns going undiscussed. Maybe we should reorient our healthcare system to focus on the patient first and build a healthcare delivery model with that in mind. It’s definitely something to think about.
As the winds of medical practice have shifted over the last several years, many physicians are calling into question the medical model under which we have worked for the last couple decades. It is an interesting discussion to understand how we ended up in this medical system but that is for a later date.
One physician who is breaking the trend is Rob Lamberts, MD. He is a Meds/Peds physician in Georgia who recently decided to step out of the insurance based medical system and return to the simple paradigm of one doctor and one patient. He only accepts cash for services and that is on a monthly membership basis. The idea being is to engage patients in overall health and be motivated to help them stay well.
Here is a link to a recent editorial he wrote about what is wrong with our problem based medical system. I really like the editorial even if I don’t agree with it all. At Trinity we strive to provide comprehensive care that allows for patients to be well (and stay well) and not need our services. We don’t want to establish a group of dependent people who need medications and labs ad infinitum. Insurance companies, however, take the opposite approach. They have started to develop programs of ‘quality assurance’ that measure physicians and other health care providers with certain metrics of health. For instance, if a patient with a diagnosis of diabetes doesn’t receive appropriately timed blood and urine evaluations I am penalized. It doesn’t matter that the patient is doing so well they no longer fall under those guidelines nor does it matter if an abnormal result will fail to change our treatment option.
Give this commentary a read and consider where our health care system should go in the coming years. We have a choice.