Legislation permits direct primary care to complement insurance
Healthcare spending continues to grow. Fortunately, a bill being considered in Madison this week, SB4, and companion bill AB8, provides a solution that could make it both cheaper and more accessible via direct primary care.
Under DPC, patients receive care from physicians or other providers without the involvement of insurance. DPC and insurance are complementary, though. Patients can choose to use their insurance for more expensive procedures.
Under a DPC arrangement, typically with an individual physician or a small physician group, patients pay a monthly fee, typically $40 to $100, in exchange for a wide variety of services. Membership is voluntary and can be canceled or entered into at any time. Patients have 24/7 access to comprehensive and personalized primary care. Lab tests and imaging are offered at nominal extra cost.
The arrangement avoids bureaucracy, paperwork and costly claims processing. Physicians do not engage in any kind of risk analysis for billing and consider age only in deciding how much to charge for membership rates.
No approvals are needed for procedures or services, so the physician and patient are more empowered. Care can be obtained faster and at lower cost.
DPC is not meant to replace insurance and is not insurance — so should not be regulated as insurance. Regulating DPC as if it were insurance would restrict providers’ flexibility to innovate and at least partly negate DPC’s cost and service advantages that stem from having less overhead for expenses such as the large buildings, infrastructure and administrative staff of hospitals.
DPC legislation in Wisconsin
More than 30 other states have already enacted laws similar to the one now again being considered in Wisconsin. A similar bill was considered in the last session but failed to make it out of the Senate.
There’s good reason to hope it has more success this time around. It is good for consumers to learn that they can sometimes pay cash and sometimes use insurance, and that the two approaches are complementary. While incumbent players in an anticompetitive healthcare system might resist, direct payment will control costs while also empowering patients, physicians and employers that pay for benefits.
Daniel Sem, Ph.D., MBA, JD, is professor of management and marketing at Walsh College and president of Walsh Ventures and CU Ventures.
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