Last year, the La Crosse school district saved approximately $1.5 million because staff members and their family members opted to use fixed-cost, direct primary care, according to the district's finance director. #wiright #wipolitics Click To Tweet
MacIver News Service | May 29, 2018
By M.D. Kittle
LA CROSSE, Wis. – In the death spiral days of Obamacare, bending the healthcare cost curve seems like a quaint concept from a simpler time.
“[Direct primary care] costs us one-third of what it would cost if those claims were coming from a preferred provider,” said Patricia Sprang.
But there are some positive signs in places like La Crosse, where local government appears to be winning the war of ever-escalating health care costs – thanks to a free-market fix.
The School District of La Crosse has seen significant savings through a health insurance package that includes direct primary care.
“It costs us one-third of what it would cost if those claims were coming from a preferred provider,” Patricia Sprang, executive director of the district’s business services’ department, told MacIver News Service.
Direct primary care is making a big difference in communities across the nation, and could be on the verge of a growth spurt in Wisconsin – if lawmakers can come to terms on a bill that would clearly define the health care model in state statute. The proposal, co-authored by state Rep. Joe Sanfelippo (R-West Allis) and state Sen. Chris Kapenga (R-Delafield), moved through the Assembly last session but died at the Senate doors, mainly because of concerns by the powerful health insurance lobby.
Direct Primary Care is not health insurance; it’s a method of delivering health care in which patients pay their primary care doctors directly via a monthly fee, bypassing traditional health insurance that can obscure the actual costs of procedures. Since patients are paying cash, there’s significant downward pressure on prices.
DPC is true transparency. Unlike the complicated morass of health insurer price negotiations, DPC providers list the costs of their medical services up front – often on their websites.
In the case of the La Crosse school district, direct primary care through Neighborhood Family Clinics is included in the district’s health insurance packages, Sprang said. The district effectively pays a fee for covered employees to use the direct primary care clinics.
Moreover, because DPC brought down the number of more expensive, traditional health insurance-based claims, the district saw no increase in its health insurance plan and no change to its benefits.
Last year, the district saved approximately $1.5 million with staff members and their family members opting to use fixed-cost, direct primary care, according to Sprang. Moreover, because DPC brought down the number of more expensive, traditional health insurance-based claims, the district saw no increase in its health insurance plan and no change to its benefits
“The less cost we can incur for the same services that we might receive otherwise the better it is for us overall,” Sprang said.
The City of La Crosse, too, has seen seen significant savings through DPC.
Valerie Fenske, the city’s director of finance, said traditional health care claims dropped substantially last year, with 1,462 of 1,589 covered employees, spouses and dependents eligible for DPC using it. The city – and its taxpayers – realized a total of $60,000 in health care cost savings in 2017, the first year of DPC implementation.
La Crosse County, too, employs direct primary care in its suite of benefits. Officials there did not return MacIver News Service’s calls seeking information.
The bill in the Legislature would apply such savings through the state’s Medicaid program, BadgerCare Plus. Sanfelippo’s and Kapenga’s legislation includes a direct primary care pilot program for BadgerCare recipients. Sanfelippo said La Crosse’s success with DPC points to significant savings for taxpayers statewide.
“If you would take those savings (in La Crosse) and translate them into our state Medicaid program, even if a small fraction of our Medicaid recipients would be able to take advantage of this type of program, you’re talking tens of millions of dollars that would be saved for the state,” Sanfelippo told MacIver News last week on the Vicki McKenna Show, on NewsTalk 1130 WISN.
More so, direct primary care would provide greater access for underserved communities and move those populations from more expensive emergency room care to cost-effective primary care, which ultimately could reap huge savings in state healthcare, Sanfelippo said.
A study committee has been formed to look at DPC and its potential impacts. Inexplicably, neither Sanfelippo nor Kapenga were named to the committee, although Sanfelippo said some excellent DPC practitioners have been.
Sanfelippo believes the committee is unnecessary. The bill, the legislator said, would achieve what is needed, codifying what direct primary care is and what providers and consumers can expect from it. While there are several DPC practitioners around the state, Wisconsin statutes are silent on the health care model.
At least 25 states have DPC laws on the books, according to the Direct Primary Care Coalition. Several other states, like Wisconsin, have proposed legislation. A bill in the Minnesota Senate is similar to Wisconsin’s, defining direct primary care agreements as health care contracts, not health insurance, and freeing providers from the state’s insurance regulations, according to the Heartland Institute.
“Direct primary care is a model of providing primary care services that allow patients to have absolute control of costs,” Sen. Scott Jensen, a Republican co-sponsor of the bill, told Heartland. “That’s because they sign up for it based on known facts. They know that if they sign up for $70 a month, that’s going to be $840 per year, and that’s going to cover all of their primary care. It’s going to cover their physical, if they get a sinus infection, have a sprained ankle, need cholesterol checked, etc.”
There’s certainly room for growth nationally. About 3 percent of family physicians operated DPC practices as of 2017, according to the America Academy of Family Physicians. As more health care consumers are given a choice, however, direct primary care is expected to expand, experts say.
“It definitely offers a choice,” Fenske, the La Crosse city finance director said. “We really just don’t have any complaints. Our employees are really happy to have it … It’s not a mandated change. It’s a choice, but people are using it.”