The 7% plan to fix primary care

This is a simple plan that would empower patients, improve the lot of primary care physicians and likely hold down medical costs while improving quality in the health care system. I would first like to present the plan, then elaborate on how it could accomplish the above objectives.

The first part of the plan would set aside a portion of each person’s health care dollars (i.e., insurance premiums) and place it in an account to be spent exclusively on primary care. This would create a primary care spending account for each individual that would be spent at their discretion. Second, each person would access their account with a debit card and be able to purchase care from whatever practice they choose without restrictions. Third, the amount funded would equal 7% of the individual’s projected health care expenses for the coming year.

Below I would like to illustrate how this plan would disrupt the current health care system and examine its effect on the major players.

First, I would like to examine how it would affect the most important benefactor: the patient. The current paradigm features hurried visits, inconvenient access, delays in scheduling and unnecessary appointments. The provider only gets paid for face-to-face visits so email, phone calls and remote (webcam) visits are discouraged. If one does find a provider able to provide unhurried thoughtful care they are likely to be out of network in a year or two. Current payments to primary care account for about 4% of health care spending. Under the 7% plan, PCPs would be better compensated and less restricted in how they deliver care. Appointments could be longer and more readily accessible. PCPs would have an incentive to embrace care via email and phone calls when appropriate. Once a relationship was established, it could be maintained indefinitely at the discretion of the patient and provider as opposed to the insurance company. And if it doesn’t work out it would be easy to find another practice.

Second, for those practicing primary care this could be life changing. Insurance contracting could be eliminated. Documentation could become succinct and intelligible without having to worry about an audit. Collections could become the swipe of a card. Work flow could be adjusted to see those who are sick and most in need of acute care. Revenue per patient would be higher so physicians would have more time to take a history, contemplate different diagnostic and treatment options and discuss them with their patients. The practice could be truly patient-centered. The collective creativity of PCPs could unleash as yet unthought of care models.  House calls could resurge. Medical students could once again think about going into the field. These are just a few of many benefits that could transpire.

Third, while it would increase funding for primary care, the plan would likely decrease overall health care spending. With improved access, acute and urgent problems could be managed in the office setting which is significantly less expensive than the emergency room. Many problems could be handled with a phone call or email. Familiarity with a patient allows a physician to be more conservative when recommending testing or procedures. Many acute problems resolve spontaneously given enough time. Patients can be seen at 1 to 2 day intervals in the office if necessary. This is particularly true for elderly patients who are often harmed or scarred by a hospitalization. Conversely, true emergencies can be easier to detect and more quickly treated when the physician knows the patient.

Fourth, the quality of medical care should improve. With improved access acute issues could be managed in the office in a timely manner before they become an urgent or critical condition. Communication with patients and specialists could occur more promptly and issues could be handled more proactively. With more time and resources preventive care and chronic disease management could be prioritized. This type of funding could also spur new types of practice models from the bottom up instead of the top down. The primary care medical home (PCMH) designation comes with so many rules and regulations that it stifles participation and innovation. Providers could develop any number of new models and emulate what works rather than latching onto PCMH and hoping for the best.

In summary, the current fee-for-service payment model doesn’t work well for primary care. The work flow created by requiring appointments in order to bill for a service is inefficient and leads to overbooking, impaired access and substandard care. The work force is demoralized and many patients feel disconnected. There is no better way for America to improve the quality and cost-effectiveness of its medical care than by salvaging its broken primary care system. I think allocating 7% of health care dollars into accounts for patients to spend directly on primary care could go a long way towards providing a solution.

Charles Smith is an internal medicine physician.

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  • JR DNR

    Currently, my costs are about 8% out of pocket for primary care, 92% toward premiums. (This is how much I’m paying, not what my doctor is receiving).

    From what I read, since 100% of my costs are primary care, you’re suggesting that out of what I pay for my premium, I can only use 7% of that to pay for my primary care doctor’s visits? I don’t have time to calculate the exact numbers, but I assure you I would pay much more out of pocket in that scenario.

    Those numbers apply to large groups of patients over many years, not individual patients each year. A large portion of healthcare spending goes toward a small number of patients.

    A lot of friends my age currently use an average of $0.00 in health care per year. They don’t go to the doctor unless they have an emergency. So for them, yes, most of their care isn’t primary care because they aren’t using health care at all.

    • JR DNR

      7% of my premium would pay for about 25% of my primary care visits per year, not including any lab work, procedures, – just the visits.

    • Lisa

      I see the same problem with this scenario. Of course, those who promote it say people could aways pay cash for the rest of their health care needs.

  • JPedersenB

    You have some good ideas! Unfortunately, those who are making the most money will fight tooth and nail against anything that changes the status quo. I am not sure that any changes will happen until the whole system blows up. I hope that does not happen!!

  • Lisa

    Some questions:

    1) How do you determine what an individual’s projected health care expenses would be? Would this be done on an individual basis, looking at the individuals past history and current health status? Or would it be done on the basis of an algorithm? Or would the assumption be health care expenses equal insurance dollars plus copays and deductibles? How would information be captured for the upcoming year.

    2) What about people on medicare? Again, do you look at someone’s actual yearly medical expenses, their annual heath care expenditures or what? Remember that medicare is financed, for a large part, by taxes paid over a life time of working.

    3) What about people who are uninsured? What about people on medicaid?

    The real problem I see with this plan is an assumption that insurance premiums equal health care expenses. Based on my current insurance rates I would get about $550 for primary care. That amount would cover my primary care costs if I don’t have to see my pcp more than several times. However, that amount would not be enough to pay a DPC retainer, if there were any such practices in my area.

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  • SteveCaley

    Top-level bubble policy is what got us into this mess. The devil’s in the details.

  • johnfembup

    “PCPs would be better compensated”

    Well, pcp’s incomes are not where they should be, but you’re gonna have to explain how your plan to increase them won’t increase the cost of medical care. Based on your figures (4% vs 7%) it will certainly increase premiums.

    At the same time, I really do like your idea to finance medical spending accounts by including something in the premiums. Some mechanism would be needed to tax-exempt such amounts. My suggestion would be to tax-exempt 100% of everyone’s medical premiums, but that’s a whole nother story.

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