Direct pay primary care and the ACA still don’t mix

Lately I’ve gotten hooked on watching the reality TV show, the Deadliest Catch.  It’s astounding to me what these guys go through to catch crab in the Bering Sea.

One of the recurring themes on the show is the new crop of “greenhorns” — new recruits to the profession of working crab boats — that try to show they can hack “the world’s most dangerous job” each year.  They often come with bravado and brashness, thinking that they can prove to the world just how tough they are.  Reality hits quickly, and most greenhorns don’t make it through the year.   The more the bravado, the more quickly they seem to wilt.

Welcome to health care 2013: my reality TV show.  Here is something my family just got from our insurance company:

Direct pay primary care and the ACA still dont mix

$1200 per month?  This is double what we have been paying all along.  Compared to this, the $50/month that I charge (maximum $150/family) seems pretty reasonable.  This plan is, after all a high-deductible insurance that doesn’t cover a whole lot of services, so a practice like mine that focuses on avoiding unnecessary tests, medications, and use of medical services would make a lot of sense, wouldn’t it?

But people are scared and confused by what has been going on with the Affordable Care Act.  They are getting letters like this, and (like me) don’t know how they can afford to do this.  I have to admit, the irony of this happening as a result of something labeled “affordable” is not lost on me or my patients.   It’s also a tough irony to see how a practice like mine, which was built to offer access to truly affordable care, is being hurt by the ACA.

I got this from a patient who recently signed up:

I am sorry to inform you that due to our circumstances, and the ACA it is not feasible for us to use your service. We would still not qualify for appropriate coverage because we don’t have hospitalization. We will just go to prompt care or the emergency room if necessary. Actually I hope everyone drops their health insurance and goes to the emergency room, and show the socialists how we can totally decimate their ideas of forcing some to pay for others. If I didn’t have so many personal issues right now I would have stayed with you, but if I would still be penalized for not being in an exchange, it doesn’t make sense to keep going. Some months we don’t even go to the doctor, so I must say thank you, for your work with us, and I hope you are able to weather the storm, and we wish you success.

While this sentiment is fairly strong, it is fairly representative of people’s feelings on this issue.   Other direct care providers have reported a significant drop in the number of people signing up.

The solution, I am told, is to combine what I am doing with a “wrap around” high-deductible plan, and that “will meet the ACA requirements” and get the person out of paying the fine.  Many/most of my patients are interested in this possibility, both for themselves and for their businesses (as a very large percentage of my patients are owners of small businesses).  This would benefit all parties, it would seem:

  • This would be a huge gain for me, as it would give my practice an inside-track to a large number of patients.
  • It would be good for the patients, as it would give them the ability to avoid the fines while maintaining high-quality care.
  • It would benefit the small businesses as they’d be able to insure their employees or at least be sure their employees weren’t getting socked with huge insurance bills (see above).
  • It would benefit the insurance companies, as I would be far more focused on avoiding spending up the patient’s deductible, reducing unnecessary testing, and keeping the patient out of the ER/hospital.  In short, they would reduce the risk, which is speaking in a language insurance companies know well.

This is where, just like it does to a greenhorn on the Deadliest Catch, reality hits.  It’s not as easy as I thought.  I thought the contrast of my practice’s simplicity with the complexity and confusion of the ACA would have people seeking alternatives.  Enter me stage left with heroic bravado, here to save the health care system!  But I am met with the same smirks and sneers thrown at the greenhorns by the weathered deck hands.

None of my patients know what to do, and I could probably get several hundred covered lives’ worth of business for an interested insurer.  I could make some employers happy and the lives of a bunch of employees happy as well.  But when it gets right down to it, I am met with blank stares.  How crazy, wanting to do things in a better way!  How crazy, trying to improve care quality while saving money!  How crazy trying to offer truly affordable care!  Don’t I know that there is no cutting into line here, and that I’ll have to fill out all the proper forms and stand at the end of the line until my turn comes?

I’ll still hit the street and try to get answers for my patients.  I’ll still be calling more insurance agents trying to put something together that doesn’t make a mockery of the word “affordable.”  But I suspect my hopes for gaining some advantage by the provision in the ACA for pairing practices like mine with wrap-around plans is not reality.

These crab pots are coming back empty.

Rob Lamberts is an internal medicine-pediatrics physician who blogs at Musings of a Distractible Mind.


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  • Thomas D Guastavino

    For better or worse the the abilty of both patients and providers to survive the changes to the healthcare system will depend on facing reality.
    For patients: Cash will be king. To the ability to fund an HSA to paying a subscription fee, to affording any insurance at all, your access to care will depend on your ability to afford any out-of-pocket expenses. Medical Tourism will explode.
    For providers: 1) Develop unique skills that are not easily replacable. A lot of work is going to flow to the lowest cost providers.
    2) Keep it simple. Stick to a high volume a of low risk services.
    3) Stay out of the hospital emergency room. Urgent care centers are OK as long as it serves a stable economic market.
    I invite anyone to add to these lists.

    • Guest

      The Obama administration has severely limited how much we’re allowed to pour into our HSAs anymore – there’s a $2500 cap now. And they’ve limited what you can spend it on. I mean, it’s not like it’s YOUR OWN MONEY or anything. Ugh.

      Also, you’re not allowed to buy a policy that covers less than 80% of all of your medical expenses. Which means you still have to pay for a very expensive insurance policy (unless you’re one of the lucky ones who gets us other suckers to subsidize them).

  • Margalit Gur-Arie

    Don’t give up Dr. L. This is temporary. When the dust settles, in a couple of years, people will be stepping on each other to secure a spot in your practice. Like it or not (and I don’t), we are moving to a system where most people will only have catastrophic insurance, at least for the next few election cycles (see my last post on this blog).
    I got the same letter you did, but in my state I was able to extend our existing plan for one more year, and I began to look around for a concierge doctor for my family. For a diehard liberal, this was a very difficult decision to make, but my kids come first, and if people like me are going this route, most other less politically opinionated folks will too.
    No matter what they keep telling us, there will be an awful shortage of “real” primary care (my latest on this: ), and every person with two bucks in their wallet will be looking to secure some of that for their families.

    • ninguem

      “Everyone has catastrophic insurance……”

      Is that necessarily bad?

      It seems to be something that would be “scalable” to a large and diverse nation.

      The truly rich could fund their insurance and their HSA.

      The truly poor could get both government-subsidized.

      In between, varying amounts of support for insurance, or for HSA, could be allowed, based on income.

      Incentive to save on healthcare costs with the patient pocketing savings. The “skin in the game” you always hear about.

      • Dr. Rob

        Catastrophic insurance alone gives people a disincentive to take care of routine problems, such as blood pressure and diabetes. They tend to avoid the care that would avoid the catastrophic. Ideally you have a catastrophic plan with a practice like mine ($50/month for all care) that works to keep people well and prevents them from needing to use their catastrophic insurance in the first place.

        • ErnieG

          With all due respect, I don’t think retainer practice fees can qualify for catastrophic insurance. If your patient gets in a MVA and needs emergent splenectomy, ORIF of tib/fib, etc, do you peform these? Or Multiple sclerosis presenting as optic neuritis- do you feel confident diagnosing and treating MS? or acute onset of lupus nephritis with nephrotic syndrome needing renal biopsy to guide treatment?
          But I do believe that “routine” care, or “preventive care” should be probably NOT be covered by insurance, since what we REALLY want is care that is affordable, and want to PREVENT medical bankruptcy. The key is to provide mechanisms to reduce costs, and let patients have “skin in the game.”– enough for them to make decisions, but not enough to not seek care (which the ACA was nothing about- it was about grabbing more covered lives). Because “Preventive care” can be budgeted, common, and “foreseen” (ie. Mammos q1-2y, colon cancer screening, vaccines) having insurance get involved only results in “nickel and diming” from insurances, squeezing out whatever they can.

        • Jess

          “Catastrophic insurance alone gives people a disincentive to take care of routine problems, such as blood pressure and diabetes.”

          My car insurance doesn’t pay for routine oil changes or someone to keep tabs on my tire pressure or change my headlights when they go out. My home insurance doesn’t pay for routine repairs and maintenance either. Yet somehow I, like tens of millions of other grown-ups, manage to budget for and take care of the routine care and maintenance of my home and car, because not to do so would be frankly silly.

          Why is the routine care and maintenance of our own bodies somehow all too hard, why is it out of the question, when we’ve been proven perfectly able to to do it for our cars and homes without the “incentive” of “insurance” providing it all for us “for free”?

          I would happily pay $50 a month to join a direct pay primary care practices … if the ACA hadn’t just hoovered an extra $3,000 of my disposable income out of my annual after-tax income.

      • Margalit Gur-Arie

        That “skin in the game” is now in full effect and it seems that people don’t like it very much. Same people that were singing the praise of “skin in the game”, by the way…
        Problem with ACA insurance is that it does pay for “preventive” care and it does pay for catastrophic care, but it doesn’t pay for the $6,000 to $12,000 in between. For most people, not just the subsidized poor, those numbers are catastrophic or close enough to that to prevent them from seeking anything other than emergency care, vaccines and screenings, and perhaps not even screenings because if something turns up, they have no way of paying for it, so better not to know about it….
        And this is the part that is hurting direct pay practices.

        Making “preventive/routine” care an uncovered service, as Ernie G is suggesting, means it is a service that insurers cannot manage/control/enforce and this can have adverse effects on their bottom line without saving them much upfront. As long as it’s solely about cash, we won’t have good solutions….

        • ninguem

          Is that “skin in the game” in full effect?

          Large unions are exempted. Government is exempted. All sorts of politically-favored organizations were exempted.

          Seems the only ones with “skin in the game” are the individually insured and small business.

          • Margalit Gur-Arie

            For now, that is correct, although seeing how private exchanges are catching on among large employers, it won’t take long until everybody’s skin will be game.

    • SarahJ89

      I’m on Medicare. I have an RNP I really like. But if she retires I would definitely consider, even on my fixed and not very high income, privately paying a PCP I can work with for the rare (once a year, usually, for a thyroid check up) office visit. I find doctors think differently now than they used to. I suspect it’s because the ones around here no longer are free to make their own decisions. They’re all owned by Corporate Medicine and are playing to the gallery. I can see them riffling through algorithms in their head. I may as well not be there, just mail in my symptoms because the algorithms rule. At least I think that’s what’s going on. All I know is doctors definitely *think* differently now and I would happily pay one who’s on the old wavelength, if such still exists.

  • Dr. Rob

    This is the hard part of all of this. I don’t know how to get the wrap-around plan that will go with my practice. I do know that if I can get this it will make my practice all the more attractive. In reality, I continue to grow and continue to become increasingly profitable while maintaining a very high satisfaction rate and low attrition. I do think that this is the right thing to do; I just wish the ACA was friendlier to those of us who are truly trying to make care affordable.

    • Brian Lanier

      I’ve tried twice to post this comment to the original post, I’ll see if this works:

      Recently at the Direct Primary Care Summit in St. Louis, I spoke to an insurance representative that gave me some insight into this issue. She said that the issue, at least where she operates, is that there are not enough providers, or at least if they are there she doesn’t know who they are, and if she did know where they were, her company would have to write a different policy for each practice, something that isn’t going to happen. The issue is that a real “wrap-around” policy carves out the actuarial value of primary care services, much the way your auto insurance company has no cognizance over whether you get your oil changed. For an insurance company to write one of these policies, there needs to be a sufficient number of physicians providing an actuarially equivalent set of services to go along with this plan. I think that this can be accomplished while maintaining the fundamentals that are important to DPC. What is badly needed now is the coalescence of DPC physicians into organizations, both national and regional.

    • Self Pay Patient

      You may want to speak with the folks at Qliance in the Seattle area, my understanding is that they’ve integrated their offerings with high-deductible plans (employer plans too, I think).

  • Margalit Gur-Arie

    You can see everything that’s available on the exchanges without actually buying.

    • Jess

      Healthsherpa was done up by a couple of guys in less than a week, and it WORKS. Obama should have gotten them — or the e-surance people – to do the ACA website.

      Oh I forgot, the reason the government had to take over this stuff is because the private market (which created healthsherpa and e-surance) was allegedly inferior to anything the government could put together. LOL.

  • Margalit Gur-Arie

    Just curious: Is that with or without subsidy? Are the deductibles and OOP the same too? And did you actually check the hospital/doctor network? The same insurance company does not necessarily mean the same network, although it might be.

  • Dr. Rob

    This is a re-post from my blog, You can read all about it there. My practice website is

  • buzzkillerjsmith

    Moonlight in the local urgent care until the practice picks up.

  • Jess

    I don’t know anyone – ANYONE – who is paying $400 a month ($4,800 a year) LESS for an equivalent (same deductibles, same out-of-pocket expenses, same physician and hospital network) health insurance policy under the ACA. If your tale is true, you should contact the Whitehouse – I understand they’re pretty hard up for Obamacare “success stories” that don’t fall in a heap as soon as the slightest bit of fact-checking is done.

  • Margalit Gur-Arie

    I don’t think we can talk about health “insurance” the same way we talk about car or home insurance. The primary difference is that there is no blue book value for people, and the secondary difference is that there are probably no two people with the exact same needs, or eventually exact same claims. You may not need maternity & childbirth covered, and you may also not need PAP covered, and you may not need cervical cancer treatments covered, and maybe I would like to exclude prostate cancer coverage from my plan. I am sure we could go about this little exercise all day, and end up with thousands of different policies and exorbitant administrative costs, which is what we have now (pre-ACA).
    With the ACA comes standardization in benefits (with very minor exceptions), and the only variables now are premium, copay, coinsurance, deductible, OOP and unfortunately, network. This in and of itself should reduce administrative costs for insurers, but it probably won’t reduce our costs.
    If you already had a high-deductible, as I did too, then your costs will go up if your policy was less comprehensive then the standard, otherwise your costs may go down, if you choose to downgrade to the standard benefits plan.
    Is the standard too high? too inclusive? not inclusive enough? I don’t know. Depends on who you ask I guess. A 28 year old newlywed may have a different answer than a 58 old executive or a 23 year old mountain climber. Whatever we would have picked, someone was guaranteed to argue that it’s too little or too much.

    Is there an element of “redistribution” here? Yes, there is. Is that a bad thing? It wouldn’t be, if this was done right. If everybody would have been thrown into one pool, and I mean everybody, and everybody would have had to pay a fixed percentage of their income for these benefits, it would have been as fair as Medicare, and probably a lot cheaper too. As it stands now, we are pitting boys against girls, old against young, poor against less poor, healthy against sick, men against women, adults against children, and as we tear each other to pieces, the industry stakeholders are having a field day in our wallets.
    This was a missed opportunity of epic proportions.

    • Jess

      The point I’m making, though, is that “catastrophic” “insurance” that instead of covering you for large unpredictable catastrophic events but instead makes you pre-pay for all sorts of predictable routine care is not “catastrophic insurance” in any sane sense of either word.

      • ErnieG

        I agree with Jess. The ACA’s definition of insurance is not catastrophic, but rather comprehensive pre-paid care with a large deductible and loads of middlemen and regulations. It may be “catastrophic” in the sense it costs a lot, but not catastrophic in the sense Jess means.

        In the end, this is really about money and who controls it, not about medical care. The ACA is not about getting “affordable care”, it is about this idea that everyone needs health insurance, as it presently exists, which his really pre-paid care, so let’s expand this. Well, the reality is that healthcare, is well…expensive. It does not have to be as expensive at the US, but that is mostly because it is beginning to run like a large business which everyone has to pay into. Large business
        values economies of scale, margins, cost cutting, etc. It should be like small
        businesses, which tend towards strong personal relationships, because in the
        end most medical care is about diagnosis and appropriate treatment from a medical professional tailored to the individual. It definitely should not be
        like government, which is inefficient and political. This is not a slam on
        government or large business, but rather on the belief that medical care should be like either or be controlled by them, which it increasingly is. The ACA will not reduce cost for health care, other than via crude rationing (high
        deductibles and patients will not seek care). It definitely will improve the
        financial health of large corporations cutting us to death.

        Margalit is correct in the sense there must and should be some “redistribution” of wealth (or “insurance” in the strictest sense) for medical care in this country (unless you want us to operate like third world countries). The collection of this wealth will need to be via gov’t or tightly controlled private organizations or both, but way this redistribution is spent needs to
        be in the hands of patients/citizens. They are, in the end, what is important. Outcomes, and hence medical care is deeply personal; Insurers/gov’t mandates such as PQRI, EMR meaningful use, etc ARE NOT REALLY relevant to patient care, and in fact interfere with professional autonomy. These third parties won’t know how to behave; that is not to say patient’s will do it better, but at least it is their choice.

      • Margalit Gur-Arie

        Well, yes. Catastrophic insurance, in my view, would go something like this: you pay for the first X thousand dollars. After that the insurer pays for whatever the doctor orders, no questions asked. For very poor people, there is a government issued card that can be used up to X thousand dollars of medical expenses, as ordered by doctors (again, no questions asked). For less poor people, a progressive amount is loaded on the card, all the way to zero, for the rich.
        Insurers, are effectively just third party administrators of these tax financed funds. Simple, and cost effective.

        Worried about “providers” robbing the “system”? Get rid of “providers” and let’s go back to a “system” of physicians, oaths and mushy ethics and all that….

  • Jess

    Wait till we get the Affordable Food Act and every American, whether they wish to or not, will be forced to buy grocery coverage that will give them a monthly allotted amount of whatever the Government thinks we should be eating. Our new GroceryCare will “cover” things that a lot of the population neither wants nor needs (no, you’re not allowed to buy the inexpensive “I’m on a budget so I want to live on farmer’s market seconds, rice and beans” plan, everyone will have to buy the “Whole Foods organic arugula, free-range eggs and artisanal tofu” plan), then when it’s so UNaffordable that half the population can’t afford the premiums on their own, the Government will step in and provide taxpayer subsidies.

    Nothing is ever so expensive as when the government steps in and makes it “free”!

  • Jess does not hold data secure because there’s virtually no security built in, and they forgot to build the bit that processes payments.

    So it actually does less than e-surance or healthsherpa, but it cost more and requires you to enter personal details which it doesn’t even protect, before you’re even allowed to SEE prices.

    Amazon (another free market success story) does require you to enter personal details (name address, phone, credit card) AND manages to keep them secure, and does process payments (successfully!), and somehow IT works.

    Face it, the website is just an indicator of how badly placed government is to try to do stuff like this.

    If the government had taken over the car industry, we’d all have Edsels that would cost $100,000 each and we’d be indoctrinated to believe that without the government, we’d have no cars at all.

    • SarahJ89

      I don’t have a horse in this race but it has occurred to me as this drama unfolded that the main reason they decided to keep the integration of the contracts pieces of that web site inhouse was because there are so many, many people dying to break the ACA before it has a chance to work. The government is notorious for not paying IT staff the going rate so no, you do not get Amazon-level IT performance. Normally that integration would have been contracted also. But the security risk was simply too high. What are the chances every staff person of any large subcontractor could be counted on not to hand over information to would be sabateurs? That is what fueled that decision to keep it in house, probably the largest cause of the disaster. We can’t continue to make it our business to sabotage efforts, then complain about the end result. At some point this has to stop.

  • Jess

    Ha ha ha. If that were truly the case, health insurance companies would have ALREADY been giving women all the free birth control they could eat. They wouldn’t have needed the government to FORCE them to do something if it would truly save them money. There’s a reason health insurance companies are profitable, and it’s not because their actuaries are stupid. I’m pretty sure they’re a little better at math than the Obama administration is.

    You all need to stop regurgitating the official Democrat talking points and try thinking for yourselves.

    • JR

      I’m not an insurance company so I don’t have access to all the numbers to crunch them myself, so I can only make an educated guess.

      First, what is the birth rate difference between women who use birth control and those that don’t? In my experience women who use birth control have 0 – 3 children, and those who don’t have 4 – 5 children. That’s lousy data but let’s say on average no birth control use = +2 children over a woman’s lifetime.

      Cost of birth control pills without negotiated insurance discounts: $108 – $180 a month.
      Average cost of a birth in the US: $30,000.

      If we wanted to go extreme, and say coverage for a woman from age 16 – 45 who takes birth control every month (real women don’t do this, but let’s take this as an extreme), That’s 348 months. That’s a cost of $37,584 – $62,640, if a woman took birth control her entire life (which they don’t).

      Based on the numbers I used, covering a lifetime of monthly birth control is about the same cost as covering the birth of 1 – 2 children. And I specifically tried for worse case scenario numbers. Most women who choose to have the 2 – 3 children (but want to control when they come) are going to stop taking birth control when they have children. You are considered “fertile” if you can become pregnant with a year of trying – so those women aren’t becoming pregnant the moment they stop bc either.

      Insurance companies can crunch those numbers more accurately. And they choose to offer plans that cover birth control for cheaper than plans that don’t offer birth control. The real numbers would show a definite savings for covering birth control.

  • Margalit Gur-Arie

    No doubt about that…
    Glad you are among the helped :-)

  • ZDoggMD

    Hi Rob, in Vegas with Turntable Health we have an agreement with the Nevada Health Co-op to provide wrap-around insurance coverage for our direct primary care model, with their Neighborhood VIP plans that sit on and off the exchanges. Since they are a new not-for-profit, they are willing to experiment with innovative solutions like DPC.

    • Dr. Josh, AtlasMD

      Thanks ZDogg, yes DPC is alive and prospering under ACA, either because of it, or in spite of it

  • Dr. Josh, AtlasMD

    DPC is all about getting away from burdensome regulation, thats why its working so well for us

  • Dr. Josh, AtlasMD

    Thanks doc, we did the same thing and are thriving! i know its harder from some docs than others, but DPC is a live and well

  • SarahJ89

    Oh, I wish you’d come work in our state. Instead of the situation you’ve described they hired a friend of mine, who had NO training in or experience with computers, to oversee the implementation of a huge, multi-million dollar two-year project involving state reporting to the Feds. The reported info would be used to set policy.

    I really mean it when I say no experience or training. Her approach to the project was to just press buttons until something looked as if it worked.

    Needless to say, she drove the private contractor crazy. Her on-the-job behavior was pretty unprofessional, including repeatedly walking out on meetings because she would get so angry at the contractor (who actually knew how to program!) that she couldn’t function.

    Predictably, the project was a dismal failure. Bureaucracies, as you know, have ways of dealing with people. I’d worked for the state before and tried to warn her, to no avail. They hung her out to dry and she left the job, still convinced her button-pressing approach to software implementation was appropriate. It took several years to untangle the mess.

    Trust me, we could use you here.

  • Michael Wasserman

    You are doing it the right way..there is certainly no reason that people shouldn’t be given the opportunity to retain a primary care doctor and carry a catastrophic insurance policy in addition. I would do that in a heartbeat. Instead, I’ll go with my expensive ACA driven high deductible policy and look for a concierge doc in addition. It’s unfortunate, but I want a doctor who isn’t looking at the clock or trying to figure out what procedures to do in order to make a living off of me. I want someone who cares about me, the individual patient. Keep trying!