Free-Market Health Care in Nebraska: Direct Primary Care

By Senator Merv Riepe
The Platte Institute, February 03, 2016

In a meeting with Senate Democrats in 2009, President Obama stated, “It is not sufficient for us simply to add more people to Medicare and Medicaid to increase the rolls, to increase coverage in the absence of cost controls and reform …. We can’t simply put more people into a broken system that doesn’t work.”Fee-for-service health care is not working in the United States and that includes Nebraska. Health care reform is needed before it consumes even more of the GDP. The key to bending the health care cost curve is to refocus on primary care.

Nebraska is not the first and it will not be the last state to introduce legislation that enables licensed practitioners to directly contract with patients for primary care and eliminate the hassle of insurance. Direct Primary Care (DPC) will be part of the health care delivery reform by providing personal, affordable and accessible primary care services.

DPC is a contract between a patient and a practitioner to pay a retainer fee—monthly is common—for primary care services. The retainer fee is similar to the price of a standard utility bill. The practitioner generally provides unlimited office visits and an annual physical. Patients are encouraged to purchase a catastrophic health plan that meets the current federal requirements.

DPC has been likened to automobile insurance: coverage for what one cannot afford to lose but not for day-to-day maintenance costs.

DPC practices exist in 42 states and are supported with legislation in 13. The need for legislation is to guarantee in statute that DPC is not insurance and does not function as a health plan. The need is to ensure DPC’s viability does not rest with the opinion of one state director of insurance, who may change with each administration.

In July 2015, I expressed my intention to introduce enabling DPC legislation in the 2016 session. The early announcement was to engage as many as possible stakeholders to weigh in on the enabling legislation. In Nebraska, with both a rural and urban population, one size does not fit all. We have spoken with numerous and varied stakeholders of health care in Nebraska including representatives of medicine, nursing, hospitals, insurance, chambers of commerce, farmers, ranchers, legislators and many others.

We have and continue to receive support for the legislation and have addressed several concerns. DPC is a free-market reform health care reform that includes many benefits:

  • It means happier practitioners by offering a better work-life balance, a closer connection with patients, and getting back to the way they thought they were going to practice medicine;
  • DPC also does not require any insurance to bill, keeping seasoned practitioners from retiring too early out of frustration, and revitalizing primary care by encouraging medical students and residents to become primary care physicians;
  • And most importantly, DPC means happier patients. A focus on prevention, monitoring chronic conditions, and the patient-practitioner relationship produces better health outcomes. A direct primary care provider in Washington state reported reductions of 14% in ER visits, 60% reduction in inpatient stays and 14% reduction in specialist visits, for an average saving of over 19% per patient enrolled in the DPC practice.[1]

Critics say DPC will result in fewer practitioners available to the public due to reduced panel sizes (the number of patients a physician sees). In Nebraska, this is especially concerning given the shortage of primary care practitioners. Practitioners are not indentured servants and may elect to retire earlier than desired because the bureaucracy in medicine has provided too many challenges. Panel sizes may be smaller, but if DPC practitioners are able to improve their work-life balance, the net gain could be more practitioners available to serve for additional years.

Nebraska DPC may appeal to farmers, ranchers, and employers–especially small businesses, individuals and labor groups–as all are being asked to pay more of the cost of health care. DPC is not an all-or-nothing proposition for the practitioner. A practitioner may have a hybrid practice — a practice that includes DPC, Medicare, Medicaid, commercial and uninsured patients. In Nebraska, where some rural communities may have one physician, it is not our intent to exclude Medicare patients or others from the practitioner.

LB 817, entitled the Direct Primary Care Agreement Act, enables, not mandates, DPC in Nebraska. The legislation will establish DPC in statute to ensure its long-term viability and provide consumer protection language. The legislation will also allow the Nebraska Director of Medicaid to contract with DPC providers, but does not mandate such action. The legislation will seek to minimize regulation and be at no cost to the state.

In Nebraska, we understand, given an opportunity, the free market can and will work. We understand the importance of the patient-practitioner relationship. We understand one size does not fit all. We understand we must reform Medicaid and the entire health care delivery model before we can expand Medicaid.

I believe DPC legislation shows the Unicameral is working on innovative solutions to reform health care in Nebraska for patients and practitioners.