June 6, 2019

Improving Quality and Reducing Costs in Primary Care

Testimony before the Wisconsin Senate Committee on Health and Human Services
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Dear Chair Testin, Vice Chair Kooyenga, and members of the Senate Committee on Health and Human Services:

My name is Darcy Bryan and I am an associate clinical professor at UC Riverside School of Medicine and an obstetrician gynecologist surgeon. I also conduct research on the impact of regulations on healthcare access, quality, and affordability. Thank you for the opportunity to testify regarding SB28 and the opportunities for healthcare delivery through direct primary care (DPC).

The country is in the midst of a primary care physician shortage, and the DPC model can serve to remedy this shortage. DPC allows patients to receive the routine services they need—consultations, laboratory tests, preventive care, etc.—from a primary care doctor as frequently as they need against a monthly membership fee paid directly to the physician. No third parties are charged on a fee-for-service basis. The price of a single visit is lower than the periodic fee.

This model allows physicians to take on a smaller panel size of patients (600–800 instead of the traditional primary care provider average of 2,300), which, in turn, allows the doctor to spend more time with each patient. Patient visits average 30 to 60 minutes, compared to the 12 to 15 minutes observed for traditional primary care visits.Consequently, administrative costs to the physician are 40 percent less than the industry average.

However, many physicians are currently hesitant to open a DPC practice because of the threat of criminal prosecution for the unlawful sale of insurance. As of March 2019, 23 states have already recognized this problem and enacted legislation establishing that DPC does not constitute an insurance product. This ensures that DPC physicians are not burdened with the regulations and financial risk borne by insurance providers.

Wisconsin stands to gain from following suit and giving DPC the legal status it deserves. From the perspective of physicians, the DPC model offers physicians a work-life balance that can hardly be found anywhere else in the medical world. The average physician spends over 10 hours a week handling administrative tasks, and 32 percent of physicians spend over 20 hours per week. The DPC physicians, by contrast, are able to focus on the patient instead of spending half of each patient visit entering data. Patients benefit as well: they receive the full attention of their doctor, have access to them outside of work hours, and enjoy increased price transparency. Furthermore, important cost savings were observed as a result of scaling DPC. For example, savings of over $1.4 million were achieved in Union County, North Carolina, as a result of individuals switching from their employers’ consumer-directed health plans to DPC. Clarifying the legal gray areas surrounding DPC can thus lead to lower overall healthcare costs without sacrificing quality of care provided to patients.

Attachment

Darcy Nikol Bryan, contribution to “Better Health for More People at Lower Cost, Year after Year” (Letter to Chairman Alexander) (Mercatus Center at George Mason University, Arlington, VA, February 28, 2019)