No matter what President-elect Trump and the Republicans do to Obamacare, health care costs are going to continue to rise.
The reason is straightforward: Both before and after Obamacare, health care costs rose predominantly because of unnecessary utilization of health care resources. Decades of unnecessary blood tests, X-rays, specialty visits, ER visits, surgeries and inpatient hospitalization represent an epidemic that’s been every bit as financially devastating as an infectious disease. Insurance premiums reflect the trend: In 2015, the average annual cost of employer-sponsored family health plans was $17,545, with employees contributing on average $4,955.
As a result, employers have had to make a difficult choice. Given that high-deductible health plans (HDHPs) are about 10 percent cheaper than PPOs, more and more employers have been turning to HDHPs to save money. But this decision is tough on employees. Switching to an HDHP doesn’t prevent their premiums from rising; it just prevents them from rising as much as they would have. And in some cases, their deductibles rise so much that they end up paying for most of their health care completely out of pocket.
One way employers can reduce employee outrage is to sign them up with a primary care physician who practices direct primary care, a relatively new model.
In January, after having spent 20 years as a faculty member at the University of Chicago, I left academia to start my own direct primary care practice, ImagineMD, in downtown Chicago. Currently there are approximately 4,000 to 8,000 such practices in the U.S. Just as you don’t use your car insurance to pay for oil changes and tire rotations, in direct primary care, you don’t use your health insurance to pay for primary care visits. Employers are charged a modest retainer fee per employee per month to provide their employees 24/7 access to their primary care physicians via phone and same-day or next-day appointments.
In addition, the direct care model can actually save money for self-insured employers and their employees despite the upfront fee, making it a potential antidote to general dissatisfaction with HDHPs. This is because the improved access to a direct care provider actually reduces the rate of unnecessary health care utilization. In one study, researchers evaluated the cost-benefit of the largest direct primary care practices in the U.S. In 2010 (the most recent year of the study), these patients experienced 83 percent fewer elective admissions, 56 percent fewer non-elective admissions, 49 percent fewer avoidable admissions, and 63 percent fewer non-avoidable admissions when compared to patients in traditional fee-for-service practices.
Read the entire article at Crain’s Chicago.