Under the direct care model, doctors eschew insurance contracts and deal directly with their patients. Many charge a monthly membership for routine visits and drugs. They list their prices for procedures up front, prices that are often significantly lower than the standard insurance-driven model.
Sanfelippo says adding direct primary care to Medicaid programs could drive down costs by as much as 20 percent, potentially saving taxpayers hundreds of millions of dollars.
“In our Medicaid program we have an overabundance of emergency use for primary care. Obamacare didn’t change that; if anything it made it worse,” Sanfelippo told MacIver News Service.
Sanfelippo, chairman of the Assembly Health Committee, said 80 percent of Medicaid patient illnesses could be treated by a primary care provider. Instead, many of the cases are being handled in the significantly more expensive emergency room.
Direct primary care for a set monthly fee could stem the tide of Medicaid emergency visits, provide more cost-effective preventative health care and, unlike former President Barack Obama’s failed promises, direct care could truly “bend the health care cost curve.”
“We are spending a fortune,” Sanfelippo said, noting that the state spends $56 million annually on Medicaid recipients who use the ER more than seven times a year.
Total Medical Assistance payments in Wisconsin have soared from $4.7 billion in 2004 to nearly $9.2 billion in the 2016-17 fiscal year, according to the Legislative Fiscal Bureau.
The bill specifically states that direct primary care is health care, not health insurance, and therefore is not bound by the state insurance law. That provision could open the door to a more robust direct care marketplace, further driving down costs through competition.
Direct care is empowering consumers and the free market to drive down the cost of health care and, as has been abundantly documented, improve outcomes. It offers the return of the true doctor-patient relationship because it shifts control from far away bureaucrats to health care consumers.
Price transparency up front. No negotiating. No haggling. No copays or deductibles or piles of insurance paperwork and administrative red tape. Just a flat fee for the medical service provided.
Sanfelippo pointed to Solstice Health, a direct primary care clinic in his district providing unlimited health care services for as little as $39 per month. The model is built on pricing transparency, and the monthly memberships come without per-visit fees, and with unlimited wholesale labs, wholesale imaging, and wholesale medications.
“It’s Your Money. Its Your Healthcare. Take It Back,” declares Solstice on its website.
“Nobody takes their car to the repair shop and says, ‘Just fix it. I’ll wait to see what the bill is when you’re done.’ Yet that’s exactly what we do with our health care,” Sanfelippo said.
Direct care providers presage a “fundamental shift toward more transparent, market-driven pricing” and changes in hospital capital allocation, health care industry consultant David Johnson told Crain’s Chicago Business earlier this year.
“What’s happening in the private market will ultimately reshape health care more than government reimbursements” he said.
Twenty-three states have some form of direct primary care law in place, but Wisconsin could be a national leader in bringing direct primary care to its Medical Assistance programs.
But Sanfelippo knows it won’t be easy. He’s prepared for a pitched battle with the insurance industry.
“I expect there will be a lot of resistance from DHS. They feel they are the experts and (think) the only ideas that are good are the ones that come from their departments,” the lawmaker said.
The legislation requires DHS to issue requests for direct primary care proposals serving Medicaid patients by Oct. 1, 2018 “in at least one location.” DHS could expand to different locations. The department must enter into a contract with at least one provider by Jan. 1, 2019 and implement a direct primary care program, according to the bill. Health care services would begin by March 2020.
If necessary, DHS must seek federal approval for the program. If the federal government says no, the program would not be implemented.
The bill pegs the average monthly fee, to be set by DHS, at $70 per month “if there are equal numbers of participants from each (Medical Assistance) population.”
DHS would be required to provide status reports on the program, and investigate complaints.
Sanfelippo said he will push for legislative hearings soon.
“I don’t expect changes overnight. I’m hoping we will have a lot of open-minded people willing to consider it,” the lawmaker said.
In other words, Medicaid regularly stiffs healthcare providers by paying less than the full cost of services provided. Nationally, Medicaid pays only 52 cents for every dollar that private insurers pay. So if we push more of our citizens into BadgerCare, fewer doctors will accept BadgerCare patients because of the lousy reimbursement rate and access to health care will only get worse.
Dyck continued, “The expansion of the number of persons who receive coverage under the buy-in proposal could exacerbate provider access problems.”
That didn’t stop Sen. LaTonya Johnson (D-Milwaukee) and Rep. Eric Genrich (D-Milwaukee) from introducing the bill, AB 449, that lets anyone sign up for BadgerCare Plus as long as they’re willing to pay an estimated $600 average premium.
Supporters of the bill insisted it will not result in any additional costs to the state at a press conference rolling out the ill-advised proposal. “This costs the government, the state of Wisconsin, nothing, no extra money,” insisted Citizen Action of Wisconsin Executive Director Robert Kraig, who led the Democrats’ press conference. “It’s a simple bill with no fiscal impact whatsoever.”
But the LFB went on to strongly hint that that’s not true, either. The federal government sets requirements for provider access rates, which means the state could end up paying more for BadgerCare because of the ‘public option.’
“It may be necessary to increase reimbursement payments in order to meet minimum provider access requirements under federal Medicaid regulations. Any such increase would increase the cost associated with providing coverage and also increase the amount of the premiums paid for coverage,” wrote Dyck.
The concerns over BadgerCare For All’s impact on health care access makes the question of how many people would actually sign up an important factor, but no one responding to questions at the ‘public option’ rollout knew how many people would be interested in enrolling.
“That’s a super good question. I think the LFB didn’t know, basically,” Kraig said when a reporter asked him how many people they expected would buy into the program.
A sprawling, now-infamous study in Oregon found that participation in Medicaid “generated no significant improvement in measured physical health outcomes,” compared with people with no insurance at all, according to health care expert Avik Roy.
Medicaid’s low reimbursement rates limit patients’ access to care, which could explain why health outcomes didn’t improve. The Oregon study also found that Medicaid enrollees visited the emergency room 40 percent more often than the uninsured.
There are also other notorious examples of the failures of government-run healthcare boondoggles like the scandal-plagued VA system, rationing of care in the UK (the Charlie Gard case comes to mind), and of course, Obamacare, which is devastating individual insurance markets across the country.
While long on vague, unsubstantiated claims about access to care and cost to taxpayers, the Democrats and Kraig did offer something unambiguous in their “BadgerCare For All” proposal: Obamacare isn’t working and the cost of health care is still too high.
“Republicans I think offered some fairly cogent critiques of the affordability issues and access issues that are ongoing in this country,” Genrich offered tepidly after Kraig explained that the motivation for the bill is the spiraling cost of health insurance in the Obamacare era.
Their solution – another big, open-ended government program to patch over the failures of another – is diametrically the wrong approach.
Reagan was right when he famously said, “The more the plans fail, the more the planners plan.” BadgerCare For All is one plan that should go straight into the circular file.
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