Cutting the middleman will increase access and lower costs

The direct primary care model is the embodiment of the direction healthcare needs to go — limited regulation, patient-focused, transparent and competitive pricing for all services.

Many physicians have begun to realize the benefits of this model compared to the traditional model that relies on a third party to make payments on behalf of patients. Taking that third-party middleman out of the equation for the most basic services everyone needs has the potential to transform the way we receive primary care.

An op-ed in the Wall Street Journal yesterday highlights the benefits this model can provide for both patients and physicians:

If Todd Gibbons from Poulsbo, Wash., has an aching shoulder or needs a physical, he can call and schedule an appointment on a day’s notice, maybe the same day. His physician is also available for phone consultations and even makes house calls. It all costs Mr. Gibbons $150 a month to cover his family of five.

Costs are so low and coverage so good because the Gibbons family goes to Vintage Direct Primary Care—a medical practice that treats patients for routine care and procedures for a monthly membership fee. Virtually every routine service—from electrocardiograms and pap smears to stitches and physicals—is included. There are no office-visit fees or copayments. All physician services and procedures offered at Vintage are covered, and all without the use of health insurance.

Without third parties taking money and adding overhead, Vintage can offer medications and lab tests not covered by the monthly fee at wholesale prices. A cholesterol blood test is $3.20 for a Vintage member, but $22 at other in-network providers, according to Fair Health Consumer. Drugs are cheaper. Vintage buys directly from three national wholesalers, which compete to provide medications at the best possible price for any given patient, and Vintage resells them at cost. A 30-day supply of the generic equivalent of 40 mg Lipitor for cholesterol is $3.30 at Vintage. At Walmart it’s $9. Sildenafil, the generic for Viagra, is 37 cents a pill. The next cheapest option in Poulsbo is Safeway at $2.13. Over-the-counter drugs are also cheaper and available in-house at Vintage. Cetirizine allergy pills (the generic version of Zyrtec) are 6 cents a tablet at Vintage, about half the Walmart price.

Yet this low-cost, patient-driven model is stifled by the unwillingness of Congress to allow unrestricted use of tax-free dollars for healthcare purchases:

Tax incentives currently discourage employers from switching to direct primary care plans. One possible fix would allow patients to use health-savings accounts to pay for membership. The IRS could make this change by redefining a direct primary care membership as an eligible HSA expense.

Cutting the middlemen out of daily health care won’t solve all of the medical system’s problems. But altering the tax code to encourage employers to use direct primary care could help control or even shrink costs. Most important, it would improve the quality of care by letting doctors spend less time filling out paperwork for reimbursement and more time helping patients.

Congress could make this fix to open up a new avenue for families in this country to access low cost, high-quality primary care. As more doctors switch to primary care model, regulations need to allow people to make the choices they want based on their healthcare wants and needs.

Jordan Roberts / Health Policy Analyst

Jordan joined the Locke Foundation in the summer of 2018 as Health Care Policy Analyst. He analyzes state and national health policy issues with an eye toward removing governm...

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