Why self-insurance strategies are out of whack and other realities for advisers


ook, I get it. The benefits business has changed immensely in the past decade and advisers are perpetually under pressure to show value to their clients. Actively seeking cost reduction in employer healthcare spend is a natural place to focus, and a vital one. The rising tide of advisers tackling the high cost of healthcare is not just highly commendable, it’s necessary.

But…the way it’s happening is whacko.

Here is the basic strategy for what the more hyperbolic advisers are calling a “revolution” in advising: Convert employers to a self-insured model; attack costs on multiple fronts by designing plans that make it easier to address high-cost usage patterns; go hard after wasteful PBM and carrier/provider network arrangements; promote healthcare consumerism and old-is-new-again strategies like direct primary care, and continually monitor and audit claims data to see where next attack high costs and waste.

But this approach isn’t so much a revolution as the way our business should have worked all along. Unfortunately, wasteful practices have embedded themselves so thoroughly that our methods for backing ourselves out of them only make sense inside the reality that is the U.S. healthcare system.

Read the full article at Employee Benefit Advisor.


Stop the IRS from Blocking Patients’ Use of Health Savings Accounts for Direct Primary Care, Doctors and Patients Tell Congress


The Association of American Physicians and Surgeons (AAPS) sent a letter today, signed by 1,125 doctors and patients, to the Senate Finance and House Ways and Means Committees encouraging expeditious approval of H.R. 365 and S. 1358. These bills would allow patients to spend their own Health Savings Account dollars on Direct Primary Care arrangements. The IRS currently prohibits this use.

In the letter, AAPS Executive Director, Jane M. Orient, M.D. writes:

The whole purpose of HSAs was to expand patients’ freedom to choose how to spend their own money for medical care. More and more patients, including Medicare beneficiaries, are choosing DPC, which often includes primary-care services, basic diagnostic tests, and commonly used prescription drugs at a package price. They like the up-front, affordable price and the prompt access to a doctor they know and trust. Yet the current IRS interpretation of Internal Revenue Code will not allow patients with HSAs to use their own HSA funds for DPC agreements nor permit them to make tax-deductible contributions to their HSA if they have a periodic DPC arrangement.

DPC is lowering costs for both patients and taxpayers. Prescription drugs accounted for $110 billion in Medicare spending in 2015, 17% of all Medicare spending. With DPC dispensing, the cost of pharmaceuticals can be as much as 15 times lower than pharmacy prices. And $17 billion was spent on potentially avoidable hospital readmissions. DPC patients have fewer hospital admissions because of prompt, consistent, personalized care of chronic conditions, and fewer expensive emergency department visits because of 24-hour access to a physician who knows them.

It is improper for the IRS to be picking winners and losers in medical financing and care arrangements. It is counterproductive for a tax collection entity to discourage arrangements that save federal dollars while improving medical care.

DPC also addresses the shortage of primary-care physicians by retaining physicians who would otherwise leave primary care practice or the profession altogether owing to “burn-out” from inability to serve their patients well under other practice models.

Please expedite consideration of S. 1358 / H.R. 365 and, if it cannot advance as a stand-alone measure, look for opportunities to include the language in other upcoming budget bills.

The full letter and list of signers can be viewed at: AAPS is also welcoming supporters who haven’t yet signed to add their names.

The Association of American Physicians and Surgeons (AAPS) is a national organization representing physicians in virtually all specialties and every state. Founded in 1943, AAPS has the motto “omnia pro aegroto,” which means “all for the patient.”

SOURCE Association of American Physicians and Surgeons (AAPS)


Can Amazon cut insurers out of primary care?


It’s the stuff disruptors dream of. A group of Seattle doctors and investors had a plan to revolutionize primary care by freeing themselves, and their patients, from the dictates of insurance. They would charge a monthly membership fee for delivering on-demand medical services. No insurance bureaucracy. No reimbursement delays. No incomprehensible bills.

In 2010, Amazon founder Jeff Bezos became one of the project’s biggest investors, providing an infusion of capital and the instant credibility his name conveys. The company, called Qliance (pronounced Key-liance), scored early successes in Seattle but faltered amid a series of financial setbacks. It closed its doors last summer.

Read the full article on STAT.


A small but growing movement of doctors that don’t accept insurance and charge a monthly fee could be a model for big employers like Amazon and JPMorgan


The practices are part of a movement known as direct primary care. Instead of accepting insurance for routine visits and drugs, these practices charge a monthly membership fee — often between $50 and $150 a month — that covers most of what the average patient needs, including visits and drugs at much lower prices. The movement’s been gaining momentum at a time when high-deductible health plans are on the rise.

In most cases, the practices recruit patients on an individual or on a family-by-family basis. But often, employers who cover their employees healthcare have turned to practices as well.

For many large companies, they’re the ones ultimately paying out their employees’ claims. Insurance companies are there in the middle to handle the logistics of getting the claim from one place to another, which means you might not realize your employer’s footing the entire bill on the other end.

“I tell people, JPMorgan Chase already buys a $1.5 billion of medical, and we self-insure,”JPMorgan CEO Jamie Dimon told Business Insider. It’s why his company, along with Amazon and Berkshire Hathaway, two other massive self-insured employers, are looking for new options through a nonprofit healthcare venture. “Think of this, we’re already the insurance company, we’re already making these decisions, and we simply want to do a better job,” Dimon said.

Finding ways to “do a better job” could mean a number of things, from leveraging the number of people they cover to negotiate lower rates, to digging in and upending the way healthcare’s done entirely.

And it’s possible direct primary care could be a consideration. Amazon chief Jeff Bezos was an investor in Qliance, a direct primary-care system based in Washington state that got its start in 2007 and closed in 2017. Amazon in January also reportedly hired a doctor who had run Iora Health’s Seattle practices.

Read the full article at Business Insider.


Senators Advance New Health Care Option for State Workers

Stethoscope and document on background of doctors and patient working with laptop

LINCOLN, Neb. (AP) — Nebraska lawmakers have advanced a bill that would offer state employees an alternative health care plan.

The bill that won second-round approval Wednesday would allow the workers to enroll in a direct primary care plan, which minimizes the role of insurance.

Sen. Merv Riepe of Ralston says direct primary care strengthens relationships between doctors and clients and provides practical health care.

The pilot program would allow patients to pay one recurring fee for a variety of primary care visits. They also could purchase additional insurance to pay for other services.

Read the full article at US News.


Why Your Doctor’s Computer Is So Clunky


The Trump administration this month announced its own effort to update the Electronic Health Record systems, which disrupt the doctor-patient relationship. The government could do even more good by deregulating EHRs, establishing a free market for user-friendly products. Perhaps Amazon, through its partnership with JP Morgan Chase and Berkshire Hathaway , could eventually do for medicine what it’s done for retail.

EHRs were forced on the health-care community by the 2009 stimulus. Congress has allocated $37 billion so far to help providers upgrade from mostly paper files. Nearly a decade later, the promised efficiencies and savings haven’t materialized.

Instead, EHRs divert doctors’ attention from patients. Physicians often rely on visual cues when taking a patient history, but now what’s visible much of the time is a computer screen. The outdated EHR technology is difficult and time-consuming, contributing to doctors’ stress and burnout. The unintuitive interfaces consist of multiple drop-down menus and forms as well as countless boxes to check and pages to navigate. The screen often freezes. It takes seven clicks to order basic antibiotics, 14 clicks to order stronger ones. It’s death by a thousand clicks, and it’s killing the medical profession.

Read the rest of the op-ed at the WSJ.


7 things to know about the rise of fee-based direct primary care


Direct primary care practices, which charge a monthly membership fee for medical visits and access to wholesale drugs, are cropping up nationwide, according to Business Insider.

Here are seven things to know about direct primary care.

1. The movement toward direct primary care comes as consumers become more attuned to healthcare prices, and primary care physicians seek to alleviate pressure under traditional fee-for-service payment models.

2. Direct primary care practices charge members anywhere from $50 to $150 a month to access checkups, same-day or next-day visits and wholesale- or near wholesale-priced prescriptions. Since there is no insurance, additional copays and fees aren’t collected from members, Business Insider reports.

3. As of March, roughly 790 direct primary care practices operate in the U.S., compared to 620 in April 2017. In June 2014, there were 125 direct primary care practices, according to Philip Eskew, DO, founder of Direct Primary Care Frontier.

4. Business Insider spoke to 17 direct primary care practices for its article. The practices saw a varying number of insured patients. Some saw nearly only insured patients, while others said only about half of their patients were covered.

Read the remaining items at Becker Hospital Review.


Direct primary care bill advances in Nebraska Legislature


Nebraska lawmakers have advanced a bill that would give state employees a new health care option that minimizes the role of insurance.

Lawmakers gave the measure first-round approval on Monday with a 30-0 vote.

State workers could enroll in a so-called direct primary care plan if it survives two more votes from lawmakers and is signed by Gov. Pete Ricketts.

Read the full article on Associated Press.


‘Direct primary care’ bill goes to Gov. Scott


 – A bill that would allow physicians, chiropractors and group practices to sign “direct primary-care” agreements with patients without running amok of Florida’s insurance laws is on its way to Gov. Rick Scott.

The Senate voted unanimously Thursday to approve the measure (HB 37), sponsored by Rep. Danny Burgess, R-Zephyrhills, and Sen. Tom Lee, R-Thonotosassa. The House passed the bill in January by a 97-10 vote.

Under direct primary-care agreements, doctors charge patients monthly fees in advance of providing services, with patients then able to access services at no extra charge. The bill does not spell out how much can be charged or what services need to be included in the agreements.

 Read the full article on Fox 35.

The problem with lack of emphasis on primary care in healthcare


“In the U.S., primary care is nothing more than an assembly line,” he said. “I had to see twenty to twenty-five people a day, and then spend a third of my day coding. The patients were getting eight minutes with me if they were lucky. That’s why I got out. We should stop insuring primary care, and start ensuring that everyone has good primary care.”

Risheet Patel, MD, a direct primary care physician who leads Fishers Direct Family Care in Fishers, Ind., pointed to the lack of focus on primary care in the United States as one of the most important reasons for the gaps.

“When looking at metrics like percentage of primary care providers in the workforce, primary care visits, or dollars spent on primary care, the US falls behind other countries,” he said. “If we want to change the direction of our healthcare system, we need to put more emphasis on primary care along with screening and prevention as opposed to costly testing and treatments.”

The insurance-based healthcare system rewards physicians for ordering tests, treatments, medications, and office visits, driving up the cost of care, he said.

“It’s often hard to get insurance plans to cover preventative counseling, smoking cessation, or weight loss programs,” said Patel. “If we can work to prevent disease progression, we can help reduce the burdens of testing and treatment. However, there is a definite lack of focus in this area.”

Read the full article at Modern Medicine Network.