The Health Plan Empire Strikes Back
December 26, 2015
Just in time for the premier of Episode VII in the Star Wars movie saga, Richard Murdock, President of the Michigan Association of Health Plans (MAHP), launched an editorial assault on one of the last free market outposts in healthcare, Direct Primary Care Services. His article in the Detroit News was titled “Don’t replace insurance with bank account”.
First of all, the title is not an accurate portrayal of DPCS. DPCS is not a bank account. It is a service provided directly by a doctor for a patient…without any MAHP or government middleman. This service is provided under a retainer agreement in which a doctor offers a transparent list of services for a simple monthly or annual fee. These agreements are very similar to today’s cell phone contracts and typically run between $50-125/person/month depending upon the scope of services offered and the age of the patient. DPCS enrollees typically see improvement in the quality of care and reductions of 20% in their overall healthcare costs. That’s the rub for many MAHP members.
Most of the savings from DPCS come from a reduction in administrative overhead. The term “managed” in the managed care plans offered by MAHP members refers to administrative overhead. DPCS is seen as a threat to an Obamacare-aligned business model that adds layers of administrators under the premise of lowering costs. The only way that adding more administrators reduces costs is if these administrators are rationing the care received by the patients that the health plan is supposed to benefit. In so doing, they become the private sector version of Obamacare’s “Death Panels”.
In Mr. Murdock’s letter, he cited 4 “holes” which I would like to fill in with facts.
Hole #1: Direct Primary Care still requires individual to have health insurance. Technically, it is Obamacare that “requires” individuals to have health insurance, but otherwise the statement is true. In order to avoid penalties (aka taxes) from the IRS, individuals would need to have a “wrap-around” insurance plan that satisfies any of the coverage requirements for a Qualified Health Plan not covered by the scope of a DPCS contract. This does not negate the overall savings of 20% on patient healthcare.
Hole #2: Will DPCS doctors accept Medicaid patients? Yes. In fact, doctors in the State of Washington are doing so right now. The biggest barrier to widespread acceptance of Medicaid enrollees is the federal government which bars direct reimbursement for DPCS contracts. Managed care organizations such as MAHP members are the default providers for Michigan’s $17B Medicaid budget. With a little competition from DPCS, taxpayers could save 20% of $17B while providing better care for low income citizens.
Hole #3: Does it really save money? Yes, links to reports confirming savings can be found in the Data Center at www.MorninginMichigan.com.
Hole #4: Today, managed care company’s manage all patient records between multiple doctors. What happens under DPCS? Nothing inherent in the DPCS model precludes the sharing of patient information between doctors. Your information stays between you and your doctor unless you wish to share it with another doctor.
Make no mistake. The editorial attack by MAHP on free market healthcare solutions reflects a battle for control over your healthcare. Should an increasingly powerful government and its bounty hunters manage their “plan” for your health? Or should you and your doctor manage your own “plan”?
This battle has parallels with the Star Wars saga. You may recall the following exchange before the Death Star from Star Wars, Episode IV:
“Governor Tarkin: Princess Leia, before your execution, I’d like you to join me for a ceremony that will make this battle station operational. No star system will dare oppose the Emperor now.
Princess Leia: The more you tighten your grip, Tarkin, the more star systems will slip through your fingers. “
Obamacare is indeed now operational and beginning to tighten its grip on the lives of millions of Americans.
The role of the Rebel Alliance is filled by DPCS doctors across America.
Take heart my friends. The next episode in the Star Wars saga is aptly named “The Force Awakens”. This “Force” is the American people. When we do “awaken”, bye-bye Death Panels. 😉