Barack Obama’s Health Care Plan

Barack Obama’s ambitious health care plan is fairly simple and straightforward. His plan seeks to dramatically and swiftly increase the number of people that have medical insurance. He insists that this plan will save the typical American family approximately $2500 in annual costs. Since the average Ohio premium is less than most other states, savings to Ohio residents may average less than $2500.

The plan is designed to give the federal government more control over medical decisions and dollars, a major difference from the current decentralized system of employer-based insurance and state-based insurance regulation. Here in Ohio, insurers have been effectively held in check by the Ohio Department of Insurance. This, however, is not the case in many other states.

The Obama Plan

Many parts of the Obama plan resemble initiatives from the Clinton health plan of 1994 and the Kerry Health plan of 2004.

Essentially, Obama’s plan is divided into three sections:

1. Modernizing the US system to lower costs and improve quality

2. Promoting prevention and strengthening public health

3. Quality, portable and affordable health coverage for every person

The “Savings”

The $2500 in savings will come from health care reform, using some of the following initiatives:

*Making medical insurance universal, which may reduce spending on uncompensated care.

*Improving management and prevention of chronic conditions.

*Increasing insurance industry competition and reducing underwriting costs and profits.

*Providing reinsurance for catastrophic coverage, which will reduce insurance premiums.

Shifting Cost Burden

While all of these ideas are feasible, the underlying theme seems to be simply shifting some of the cost burden from the private sector to the government. And of course, much more control of our dollars and decisions would come from Washington D.C and not Anthem or UnitedHealthCare.

The plan will actually compete directly with Ohio private insurance companies in a “National Health Insurance Exchange.” The federal government (not health insurance carriers) would determine the quality of benefits that Americans would receive. And these new rules would apply to both the new national health plan and all participating private health plans.

Preventative Coverage Would Be Emphasized

Obama’s health care plan will encourage “healthy lifestyles” with specific emphasis on wellness. Employer wellness programs will be increased, and cafeterias and vending machines in the workplace may see healthier food.

School-based screening programs may increase along with increased support for physical education.

For Ohio individuals and families, the Obama plan would require preventative services on many federally-supported programs such as Medicare, Medicaid and SCHIP. One benefit may be possible discounts to on insurance premiums for enrollment in wellness and prevention programs.

Currently, some Ohio individual health insurance policies offer a similar discount, such as Anthem’s Lumenos Health Incentive Account (HIA).

Ohio Group Health Insurance

Employer-based health insurance would radically change under the Obama plan. Here in Ohio, both small and large employers are able to choose among many different plans for their employees. The Obama plan would force employers to offer a specific level of health benefits to their employees or pay a tax to finance a national health program. Currently, the amount of provided health benefits and the size of the tax have not been specifically discussed.

Perhaps the best and most economical plan for Ohio residents would be a concept already in place… HSAs (Health Savings Accounts). Thus, instead of imposing a top-down change on the health care system, it would seem to be prudent to transfer direct control of medical dollars to individuals and families. This would allow Americans to choose their own health plans and benefits, while making companies compete directly for consumer’s dollars by providing a real value to patients.

All of this could be accomplished by specific tax and regulatory changes designed to utilize the power of free-market competition. Health care spending could be reduced, preventative treatment could be emphasized and portability could be promoted. Reforming the tax treatment of health insurance and aiding employers that help their employees buy health insurance would help quite a bit.

For now, Ohio health insurance rates are remarkably low compared to many other states. There are many reputable insurance companies that offer a wide array of policies, including Health Savings Accounts. That shouldn’t change much for the next two years. In 2011, things might change… hopefully, for the better.

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Direct Primary Care, Direct Care and Concierge Medicine Defined

What is does Direct Care Group do and how is it different from concierge medicine? Or, more generally, what is direct care/direct primary care and how is it different from concierge medicine?

We receive this question frequently. Since we are operating in a relatively new niche within a growing industry there are many terms used to reference our business. A century or so ago, the automotive industry was in a similar stage of development and their products carried many different names. Automobile. Wagon. Cab. Motorcar. Jalopy. It’s generally understood that each of these terms is synonymous with “private, personal, internal combustion transportation machine.”

In the medical industry, references to concierge medicine include: direct primary care, celebrity medicine, private doctors, personalized medicine, private medicine, elitist-sounding phrases, or direct care (as we prefer). Direct primary care (or simply direct care) is just another term for concierge medicine.

A broad definition of concierge medicine includes several key attributes. By any name, it is a format in which: doctors see fewer patients; patient access to a doctor in person, by phone or email is enhanced; an ‘executive physical’ is included; and patients are charged an annual or monthly fee. Benefits to patients consist of a better relationship with their doctor, more preventative medicine including wellness and nutrition, and overall enhanced wellbeing as demonstrated by fewer trips to the hospital. Physicians see an improved lifestyle, ability to focus on their craft, and stability of income.

Within the current discussion and nomenclature surrounding the product, there is little to no differentiation or coherent brand identity. There is no standard for a “premium” concierge offering nor is there a clear “entry level” version. In fact, there is little product development or marketing outside of broad, generic themes. As the industry grows, however, these types of distinctions will become more and more apparent and dichotomies will evolve.

At present, the most easily identifiable differentiator is price. Independent doctors charge from $1,000-$6,000 per year per patient, MDVIP doctors charge $1,500-$2,000, and at the high end, MD Squared charges about $50,000 per year per family. Features and benefits generally trend with the expenditure to some degree. But… these practices are indiscriminately referred to as concierge medicine, direct primary care, and etc. regardless of price or offering.

Upon close inspection two major distinctions emerge. Surprisingly (or not) they are rarely identified by how a practice is referenced and neither is clearly explained or promoted.

First: Hybrid vs. Pure (Patient Conversion)

In most cases, a doctor will complete a process whereby his patient base is solicited to join a new concierge arrangement. In a pure practice, patients’ options are to either continue on with their current doctor in the new program with 24/7 access, same or next day scheduling, longer appointments, wellness and nutrition, and more or to find a new doctor. In the hybrid model, the doctor retains those patients which do not wish to convert to the new format. While the ratio of hybrid to pure concierge practices is unclear, the differences are not.

Consider a long, transoceanic flight with a hybrid passenger cabin. Coach passengers are directed past roomy, premier lounge chairs on their way to tight, upright seats. Imagine the same flight attendants prioritizing between serving champagne flutes in first class and stale peanuts in steerage. Hybrid concierge practices are the healthcare embodiment of this system. In these practices, doctors are awkwardly juggling two classes and a large number of patients. While concierge patients get a special contact number, they cannot truly get the same quality of care as in a pure model since their doctor is still seeing upwards of 1,000 patients.

In pure practices, a clear distinction is made upon conversion that a doctor’s practice is at once a concierge practice. Each of her patients receives the same treatment and no uncomfortable jockeying takes place at the office. Each patient has 24/7 access and the doctor does not have to make the precarious – and ethically questionable – judgment call of the urgency of a patient’s condition versus their established payment arrangement.

Second: Insurance (Revenue Streams)

Not all concierge bills are built the same. Some concierge doctors rely on private insurance and Medicare for a portion of their revenue. By taking insurance, they may also be subjecting their patients to co-pays and co-insurance. When reviewing an annual $1,800 fee, it may be easy to overlook the additional per visit fees and find it a bargain compared to a $3,000 sticker price.

Health insurance (as it exists today) in concierge medicine complicates the relationship for patients and increases financial and regulatory risk for doctors. As Washington changes the face of healthcare delivery (including Medicare’s inclusion of executive physicals as a covered expense) the window for concierge doctors to find revenue outside of direct patient billing is closing. This means one of two things: doctors out of business or hefty rate hikes for those practices relying on insurance reimbursement.

Like price point, hybrid/pure and insurance factors create divergent experiences, yet practices across the spectrum are collectively referred to as concierge medicine, private medicine, direct primary care, etc.

Conclusion

In practice, we at Direct Care Group define direct primary care (or direct care) as a concierge medicine experience where each patient has the potential for the same direct relationship with their health care providers. Patients have enhanced access, are given the time necessary for quality treatment, and receive whole-lifestyle care of a primary care physician and his team. Our doctors’ all-inclusive fees are moderately priced, their offices are pure concierge practices, and we do not require insurance for visits.

How long will hybrid operations in which a doctor provides some patients with a “Cadillac” product and others “Chevy” service last? How many offices depending on co-payments, co-insurance, and reimbursement from private or public health insurance will continue to operate successfully? Will these healthcare models go the way of the steam engine? We’re not sure, but we believe the solution is direct care – which is why we’ve based our business on it.

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