It's another complicated year for benefit brokers. Not only are you likely to deliver unwelcome premium news to your clients - again - you may be scrambling to decipher what's coming in 2014 with the Affordable Care Act.
Doctors, too, are feeling the weight of a health care system that is out of control. Family care doctors must see 25-30 patients a day in order to generate the revenue they require, according to the Direct Primary Care Coalition. And that's not making them rich: a recent survey from Physicians Practice reports that nearly 40% of primary care physicians and pediatricians earn less than $150,000 annually, and many report a reduction in their personal income in recent years. Medical malpractice insurance may run between $15,000 and $30,000 per year, and overhead costs include the extra staff needed to process a seemingly endless stream of insurance-required paperwork.
Becoming a family physician is not as attractive as it used to be, and that is reflected in low numbers of practicing primary care doctors in the U.S. As patients, we see longer wait times to get an appointment, overcrowded waiting rooms, and very few minutes spent with the doctor. With less time available, doctors may send patients for tests, to specialists, or out the door without a resolution, but with a handful of prescriptions.
And beginning in 2014, an additional 30 million people are expected to join the ranks of those who want to see a primary care doctor. The lines, the waits and the frustrations will only increase.
Kind of feels like a treadmill, doesn't it?
A new model
Maybe it's time you jumped off. Gaining popularity in the last few years is a new model of health care, direct primary care, that promises to bring your clients better care and lower costs. Dr. Samir Qamar, one of the pioneers of the DPC industry, founded and serves as CEO of MedLion, a multi-state DPC practice. DPC, he explains, eliminates the need for insurance for most patient care. "Roughly 60-70% of all medical care in this country is primary care," he says. "We go to our primary care doctor to find out if this spot on our arm is cancerous or just a mole. The primary care doctor makes sure that it's nothing bad, and then we seek a specialist if it is. We realized that if 60-70% of health care can be made affordable, insurance can be saved for what it was meant for: the rare events."
MedLion, like other DPC practices popping up around the country, charges a monthly membership fee. The membership can be individual, or it can be part of an employer group. When an employer includes it among their group health benefits, employees have more and easier access to their physician. "The average physician has 3,000 patients," Qamar says. "If you shrink that to 300 or 400, you get longer visits, same or next day appointments, no double- or triple-booking, and doctors get to know their patients on a first-name basis."
The good old days of medicine return
For a monthly fee that would be considered affordable by almost anyone - $59 a month for adults, $39 for seniors and $19 for children - MedLion patients can see their family physician as many times as needed throughout the month for a $10 per visit co-pay. The clinics contract with providers of other services, too, receiving substantial discounts for their patients. Qamar says they prescribe generic medicines when they can, and get subsidies from the drug makers when they can't; national labs provide testing services and radiology clinics provide their services for a fraction of the normal cost, because MedLion's patients pay cash and no billing is needed.
At Seattle's Qliance, another direct primary care provider, members pay between $54 and $94, depending on age, with no per-visit fees. Dr. Erika Bliss, Qliance CEO, says the reasonable rates and personal service are meant to encourage people toward a family doctor and away from an emergency room. "We want to reduce any and all barriers to using primary care, so people don't think twice about it," she says.
Robert Anderson, a long-time benefit broker in Washington state, serves as MedLion's vice president of benefits and insurance strategies. He works with brokers across the country to help them set up plans using MedLion for the primary care needs of their clients. Not only does this model result in healthier people, he says, it can substantially reduce costs by substantially reducing insurance claims.
That is welcome news to brokers who have exhausted their arsenals of cost-shifting changes. Both Bliss and Anderson see DPC as not just another plan design tweak, but a way to improve health and health benefits for the long term.
"When a group initially starts using self-funding along with DPC, the big shift will be that the dollars that were previously spent for claims aren't going toward paying claims anymore. Instead, those dollars can go into the reserve account," Anderson says. Qamar illustrates with a small group that, with its fully insured plan, has been averaging $50,000 a year in claims. "Let's say the group decides to self-insure using DPC with MedLion, and buys a $50,000 stop-loss policy, so that anytime the claims go beyond $50,000, there is insurance in place. You would want to set up the plan to have $50,000 in reserves, which you're paying through your premiums. During the year this group signs on with us, we take care of the 60-70% of the claims that are primary care, so none of those are submitted as claims to an insurance company. At the end of the year when everything is tallied up, the insurance may have been used for $25,000 in claims instead of the usual $50,000.
"Now that the group has had only $25,000 in claims, next year's premiums will go down. They won't have to worry about bigger claims, outside the $50,000, because they have a stop-loss in place. And even the stop-loss premiums go down because they didn't need to use it."
'People will start calling'
As a broker, you may wonder where you can fit into this scenario; after all, the insurance is all but eliminated. Anderson says you don't need to worry. "Brokers and employers are searching for anything that can help with their insurance costs," he says. "The price has hit such a ceiling that employers are really struggling; their broker keeps coming in and saying they have to modify the plan, go into these select categories of generic prescriptions, hire a pharmacy benefit manager - just shifting costs. Instead of having their groups constantly in this reactive mode, brokers can take a positive step. Put their clients back in the driver's seat where they have the opportunity to save revenue, and to really solve issues for the patients. They'll win more accounts that way."
But gaining more accounts is not the only way to get paid for helping employers connect with DPC. MedLion's Anderson says brokers can also be compensated by the DPC provider if it is done in a way that meets insurance laws. Because laws governing insurance commissions vary by state, MedLion and Qliance structure payment as marketing fees instead. "We set up a per-head fee, so brokers are compensated for the members they enroll," Anderson says of MedLion. "The standard commission on group health insurance is about 4% or 5%. We pay a little more because, for example, when an employer switches from a fully funded plan to us, the premium is going to go down. So if you got the same percentage of a smaller amount, your revenue per member would go down.
"With MedLion, you make that up because we pay you a marketing fee. And generally you will get a great deal of new business because it doesn't take very long for the word to spread, and people will start calling you. Brokers who have answers for really saving money for group health plans will be very popular. And I'm here to help the brokers by showing them how to put the plan together so they can go out there and help the employers and the patients."
Anderson adds that DPC naturally includes a wellness structure. "Because the docs are there to get you well, they have the time to think about disease prevention. If we're doing our job right, you're going to see a huge impact, a reduction in claims, better care for your people. Patients should get back on track with regard to their health." And that should be the goal.
Higgins is a Portland, Ore.-based freelance writer.
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