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An easy, free way to lower health-care costs for millions of Americans

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In October, the Trump administration proposed a new rule that would expand the ways employers can use health reimbursement arrangements (HRAs) to provide their employees with high-quality, low-cost health coverage. The United States Department of the Treasury estimates that once the new rules go into effect, 800,000 employers will take advantage of HRAs, which could affect coverage for more than 10 million employees.

HRAs are employer-funded accounts used to augment group health plans. Contributions made to HRA accounts are not taxed. Under Obama-era rules, HRAs can be used by employees to pay for qualifying health expenses, as determined by federal regulations and employers, in conjunction with a group health insurance plan.

HRAs can, for example, be used by people to cover out-of-pocket costs for a medical procedure. Funds that remain in an HRA account at the end of each year can be rolled over to the following year, encouraging health care savings.

Although HRAs currently offer some employees and their family members important benefits, they have been limited dramatically by federal agencies — a problem the Trump administration is now working to solve.

The administration could improve its proposed rule by clarifying that patients who pay for direct primary care (DPC) agreements would be eligible for reimbursement through their employer’s HRA. By classifying DPCs as a qualifying health-care expense, employees could use their HRAs to pay DPC costs, making it easier than ever for them to have access to more affordable primary care services.

DPCs are fixed-fee agreements made directly between primary care doctors and patients. Direct primary care agreements offer patients access to a defined set of health care services, including chronic disease treatment, check-ups and various health tests, at a flat, fixed monthly rate. At Epiphany Health, the direct primary care practice I founded in North Port, Fla., we charge only $65 per month for an adult membership and $25 for one child. A four-person family pays just $155 per month to receive primary care services, as well as have access to other typically more expensive care, like MRIs or blood tests, at a steeply discounted rate.

As the Docs 4 Patient Care Foundation, an organization I serve as president, noted in our substantive, eight-page comment invited by the administration, allowing the millions of people expected to access HRAs in the coming years to use these funds to pay for DPC agreements would be one of the most important improvements the Trump administration could make to the proposed rule. This would not only save money for millions of people, it would also reduce health care costs across the board and encourage those with HRAs to access routine care, save money and build up the funds in their HRA accounts.

Read the full article at The Hill.

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U.S. Health Care Spending Highest Among Developed Countries

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AMERICANS ON AVERAGE CONTINUE TO SPEND MUCH MORE FOR HEALTH CARE—WHILE GETTING LESS CARE—THAN PEOPLE IN OTHER DEVELOPED COUNTRIES

The United States, on a per capita basis, spends much more on health care than other developed countries; the chief reason is not greater health care utilization, but higher prices, according to a study from a team led by a Johns Hopkins Bloomberg School of Public Health researcher.

The paper appears in the January issue of Health Affairs.

The researchers determined that the higher overall health care spending in the U.S. was due mainly to higher prices—including higher drug prices, higher salaries for doctors and nurses, higher hospital administration costs and higher prices for many medical services.

The paper finds that the U.S. remains an outlier in terms of per capita health care spending, which was $9,892 in 2016. That amount was about 25 percent higher than second-place Switzerland’s $7,919. It was also 108 percent higher than Canada’s $4,753, and 145 percent higher than the Organization for Economic Cooperation and Development (OECD) median of $4,033. And it was more than double the $4,559 the U.S. spent per capita on health care in 2000—the year whose data the researchers analyzed for a 2003 study.

The researchers, along with the late Princeton health care economist Uwe Reinhardt, who died in 2017, came to the same conclusion in their well-known 2003 study, “It’s the prices, stupid: why the United States is so different from other countries.” The new analysis is in part a tribute to the late Reinhardt.

“In spite of all the efforts in the U.S. to control health spending over the past 25 years, the story remains the same—the U.S. remains the most expensive because of the prices the U.S pays for health services,” says lead author Gerard F. Anderson, PhD, a professor in the Bloomberg School’s Department of Health Policy and Management.

Read the full study at John Hopkins.

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D4PCF Asks Trump Administration for Tax Protection of Direct Primary Care Members and Their Employers

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An 8-page legal letter asks multiple federal departments to recognize DPC membership dues as tax-free medical expenses

WASHINGTON, January 4, 2019 — Last week the Internal Revenue Service (IRS) received an official request from the Docs 4 Patient Care Foundation (D4PCF) to recognize dues paid to direct primary care (DPC) practices as tax-free medical expenses reimbursable by employers.

Multiple federal departments ought to clarify “that the monthly fees associated with DPCs are qualified medical expenses which can be offset by HRA funds,” states the eight-page letter, which has 31 footnotes citing federal regulations and court cases.

DPC membership is not a form of insurance, so dues are a legitimate medical expense, D4PCF argues. Consequently, patients should be allowed to submit their monthly membership costs—which range from $40 to $150 per person—to their employers for tax-free reimbursement, if their employers offer health reimbursement accounts (HRAs).

The Trump administration appears amenable to the viewpoint that tax protection for DPC patients is long overdue, according to a statement made by D4PCF Board President Dr. Lee Gross upon filing the letter:

“The direct primary care community has spent many years frustrated by the lack of progress in fixing the HSA issue that has hamstrung the DPC movement for so long. D4PCF recognized an opportunity to advance this initiative through our multiple meetings with the executive branch, while also working through our legislative priorities.

“D4PCF engaged the Washington, D.C. law firm of Foley Hoag to draft a legal basis for allowing HRAs to be used for DPC memberships. This legal argument was submitted as a formal comment to the Departments of Health and Human Services, Treasury and Labor during the public comment period for the proposed rule for overhauling the use of HRAs across the country.

“We look forward to continuing to work with the Trump administration and Congress to expand access to this affordable care model for all Americans.”

D4PCF filed its letter as a comment on the proposed rule “Health Reimbursement Arrangements and Other Account-Based Group Health Plans” (REG-136724-17).

In November of 2018, Gross testified to the U.S. Senate Health, Education, Labor and Pensions Committee that removing barriers to DPC membership would immediately achieve multibillion-dollar savings for patients and taxpayers.

Docs 4 Patient Care Foundation is the only 501(c)(3) public policy think tank governed exclusively by doctors standing up for the health and freedom of patients and physicians. The D4PCF mission is to preserve the sanctity of the physician-patient relationship, promote quality care, support affordable access to care for all Americans, and protect the patient’s personal health care decisions.

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Do Health Care Consumers Suffer from Health Insurance Stockholm Syndrome?

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During a Swedish bank robbery in 1973, police were baffled when the hostages became so irrationally attached to their captors that one of the hostages recounted to a reporter for The New Yorker“How kind I thought he was for saying it was just my leg he would shoot.” This condition of inappropriate attachment to one’s captor subsequently became known as “Stockholm syndrome.”

With all the abuse heaped onto U.S. consumers in the current health care system, reasonable people might wonder: Are American health care consumers also suffering from this bizarre condition?

Most people recognize much of the current health care system is broken, unnecessarily complex, and wildly inefficient. There are long waits to see a doctor, followed by short office visits, and conflicts of interest permeate the market. All these issues take a toll on tens of millions of people every year, both physically and financially. At an average cost of $10,739 per person, the U.S. health care system costs more than twice the average spent by other comparable countries.

With a system this dysfunctional, it’s strange more people aren’t clamoring for an entirely new, better model. Instead, similar to the hostility the Swedish hostages expressed toward the police who were trying to rescue them 45 years ago, many American health care consumers are extremely skeptical of any market-based changes to the current system—even ones that have repeatedly been proven to yield impressive results.

“What kind of scam are you pulling?” is a common refrain espoused by many disbelieving people when first they learn of much more cost-effective and patient-friendly options such as direct primary care (DPC) and health sharing organizations. DPC offers dramatically improved access to care, same-day accessibility, and telemedicine at incredibly affordable rates. How? By allowing doctors to contract directly with patients, thereby avoiding costly and intrusive health insurance middlemen. Think about it: You wouldn’t use your car insurance to pay for a new tire or oil change. Why? Because it’s much cheaper to pay for these services out of pocket than it would be to have large insurers work with your local mechanic. The same logic applies with primary care doctors.

Read the full Op-Ed at Townhall.com.

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Direct primary care can rein in America’s out-of-control healthcare costs

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By: Dr. Lee Gross

While Democrats and Republicans debate the merits and drawbacks of reforming America’s broken health insurance system, few policymakers are paying attention to perhaps the biggest reason health insurance is so expensive: The actual cost of healthcare, which insurers have to pay, is out of control.

There are many reasons the cost of providing healthcare has been steadily rising in most sectors of the healthcare industry. One of the most important is that the traditional health insurance model wastes piles of cash. It pays health insurers to act as middlemen between patients and their doctors. Patients continue to use their health insurance to pay for virtually every healthcare service, including those that they could easily pay for on their own, like primary care visits, flu shots, and routine exams.

Insurers’ involvement in nearly every primary care visit is causing healthcare expenses to skyrocket. Patients are being forced to pay extra so insurance companies can facilitate transactions they really don’t need to be involved in. Not only does this cause the cost of primary care services to rise, it also forces doctors to squander time filling out paperwork instead of treating patients. Some doctors choose to hire more staff to handle much of the administrative work, also contributing to the rising cost of providing primary care.

As I recently noted in testimony before the U.S. Senate Committee on Health, Education, Labor, and Pensions, “We don’t expect our homeowner’s insurance to pay for blown light bulbs or routine maintenance. Imagine how complex and expensive it would be to purchase gasoline if we used our auto insurance to pay for fuel. This is what we expect from our health insurance, yet we are surprised that it is expensive, inefficient, and impersonal.”

Fortunately, there is a better way to provide primary care, one that offers high-quality healthcare services for much less money and without inflicting mountains of complicated insurance paperwork and government regulations on doctors.

Direct primary care is a membership-based primary care model that provides patients with a set number of healthcare services in exchange for a flat monthly fee. At Epiphany Health, the direct primary care practice I founded in North Port, Fla., we charge just $65 per month for an adult membership and $25 for one child. (A membership for each additional child is just $10.) A family of four pays only $155 per month.

In exchange for that fee, we offer all of our members the primary care services they need most often, including physical exams, EKG testing, strep and urine testing, blood-thinner monitoring, minor surgical procedures, joint injections, and much more. Patients don’t pay a single penny more for these services beyond the cost of their membership fee.

Read the full op-ed at the Washington Examiner.

 

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Direct Primary Care Funding Trends Upward

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Private-sector funding for primary care clinics is increasing, as companies seek new opportunities for investment in the $3.5 trillion U.S. health care market.

One Medical, a primary care provider that offers concierge-style health care services giving patients off-insurance treatment for a flat membership fee, announced a $350 million investment from private equity firm the CarlyleGroup in August. Having previously garnered funding from firms such asBenchmark Capital, Google Ventures, Maverick, and JP Morgan, One Medical says it plans to double the numbers of clinics and members under its umbrella.

Concierge medicine offers health care to insured individuals who wish to have a better relationship with their primary care provider and are willing to pay a monthly fee. The monthly cost of concierge medicine is usually around $200 per month, on top of insurance payments, but some doctors charge tens of thousands of dollars per year. Concierge services provide medical care to patients 24 hours per day, seven days a week; provide contact information for easier access; make same-day appointments, and stay with a patient as long as it takes to meet his or her medical needs.

Read the full article at the Heartland Institute.

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The healthcare system is a racket — direct primary care could fix it

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Everyone has a healthcare horror story.

A hidden charge on the hospital bill. A last minute test or scan that ends up costing four figures. Hours spent on the phone with insurance companies to follow up on a claim and get a reimbursement. Prescriptions costing hundreds of dollars.

And it’s getting more expensive.

Since 2007, the cost of healthcare has risen 21.6 percent, while all other prices in the economy have risen by just 17.3 percent, according to the Kaiser Family Foundation.

It’s become an unfortunate reality for many, and it’s been rightly pushed into the arena of politics.

But despite the well-intended reforms of the past two decades, including the Affordable Care Act, millions are still feeling the pinch. Why?

Too often, talk of healthcare reform is focused on insurance rather than care. It’s less about how the doctor treats your family and more about who foots the bill. Almost no one can get a straight answer about the price of procedures or medicines.

Medical insurance, once a simple way to cover higher-than-normal expenses, has become a catch-all for almost all health spending. It’s no longer about surprise injuries and illnesses. Insurance is now used to cover every ache, pain, anxiety, pill, and more. It’s like using car insurance to cover every oil change, new windshield wiper, or tire.

And in order to recoup the amount they give out, insurance companies must price their options accordingly, which leads to higher prices for consumers. That’s why healthcare expenses in 2016 amounted to 17.8 percent of GDP, higher than any other industrialized country.

At least one new doctor-patient arrangement is promising a revolution in consumer choice by bypassing insurance altogether. It’s called direct primary care, and it’s catching on across the country.

Rather than relying on insurance for ordinary health expenses, these new doctor clinics rely on monthly fees from patients, usually less than $100.

If anything more is required during doctor visits, the prices for every service and test are transparent and don’t vary depending on your plan. By not accepting insurance of any type, each clinic saves on administrative costs and overhead, prioritizing patients over costly insurers.

The results are just as intended: lower costs, more preventive care, and more face time with medical professionals.
Read the full article at the Washington Examiner.

 

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