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New primary care model lets patients skip insurance claims and copays, pay doctor directly

New primary care model lets patients skip insurance claims and copays, pay doctor directly

With her allergies showing no signs of letting up, Lené Larson met recently with her physician at Strada Healthcare.

Dr. Barry Ford offered options, including trying a different over-the-counter antihistamine and adding one at night. If that didn’t help, there was a test they could try.

He also assured her that she could contact him with health concerns from overseas on an upcoming trip. And she left without paying a copay.

Six months in, Larson says she’s pleased with her family’s membership with Strada, which operates under a relatively new model called “direct primary care.” Under the arrangement, patients pay a monthly membership fee to their doctor, generally under $100 a person.

Patients, in turn, get their primary care needs met, all without having to file insurance claims, meet deductibles or pay copays. Patients generally get longer appointments and increased access to their health care providers through unlimited visits and contacts via cellphone, text, websites or secure apps.

If one of Larson’s two young children has a fever after hours, she can connect and find out within minutes what she needs to do next.

“They don’t mind, they expect it,” she said, “and it’s so easy.”

The memberships aren’t insurance. Users of the plans, including Larson’s family, often pair membership with a high-deductible health insurance plan to cover specialists, hospitalizations and the like.

Dr. Joel Bessmer started Strada soon after the Nebraska Legislature unanimously adopted a law in 2016 opening the door for direct primary care practices. Currently three providers — a doctor and two physician assistants — practice at Strada’s main office south of 90th Street and West Dodge Road and in an office in Council Bluffs.

Strada also has five other locations, where clinicians enroll and see Strada members alongside their traditional insurance-using patients in a hybrid practice. Two new locations — one in South Omaha, another in Kearney — signed on to offer that arrangement Friday, adding to existing affiliates in west Omaha, Bellevue and Papillion.

Bessmer and other providers say direct primary care can deliver better care, reduce costs for individuals and businesses and cut overall health care costs by eliminating the overhead that comes with filing and managing insurance claims and by providing the kind of preventive care needed to keep people well and head off the need for more costly treatment.

Indeed, improving access to and better coordinating primary care are seen as keys to driving down health care costs nationally. Direct primary care is among a number of models that have emerged in recent years with those goals in mind.

Practitioners say they like the direct primary model because they can get back to the medicine many trained to perform, seeing fewer patients and spending the time to address all of their concerns in one visit rather than running from patient to patient. Traditional health insurance pays only for office visits, which means a doctor’s revenue is based on the number of patients who come in each day.

“We have a sick health care system today in that your doctor is only allowed to help you when you’re sick,” Bessmer said.

The American Academy of Family Physicians supports the direct primary care model and even provides a toolkit on its website to help doctors convert their practices. The Nebraska Medical Association views it as another alternative for health care delivery, said Dale Mahlman, the group’s executive vice president.

Nationally, the number of direct primary care practices has grown from a few in the early 2000s to more than 700 today, according to the Direct Primary Care Coalition.

Twenty-three states, including Nebraska, have direct primary care laws on their books. The Nebraska law sets basic standards for the agreements and makes clear they are not insurance plans and therefore aren’t subject to state insurance regulations. Iowa law neither allows nor prohibits direct care arrangements.

“This is a relatively new movement, but it is really gaining traction in a hurry,” Bessmer said.

Locally, the numbers are hard to track, given the model’s growth. Some urgent care clinics have offered membership plans for some time.

Two of the Omaha area’s newest direct primary care offerings, in fact, are being launched not by physicians but by other players in the health care sector:

» Subsidiaries of Blue Cross Blue Shield of Nebraska and the Clarkson Foundation are partnering to open the Nurture Health clinic in January on the second floor of the Think building at 7100 West Center Road.

» CHI Health is offering for next year a direct primary care program for individuals and businesses as well as a slightly different version for employees, both at its clinic at 132nd Street and West Center Road. The health system has had a pilot program running since July 1 with about 150 patients, some 80 of whom are not employees of CHI. More than 1,000 people, between CHI employees and their dependents, signed up for the employee direct primary care option during the health system’s open enrollment period, which ended midweek.

Both Blue Cross and CHI Health also are involved in other primary care models.

Dr. Joann Schaefer, executive vice president with Blue Cross, said finding new ways to support primary care initiatives that improve health outcomes and patient satisfaction while lowering health care costs is essential to the continued viability of the health care system.

“By making it easier to obtain primary care services, Nurture Health will help move the needle toward greater access to needed care, which in turn will result in better patient health outcomes and satisfaction and lower costs,” she said in a statement.

State Sen. Merv Riepe of Ralston, who introduced the Nebraska legislation, said he’s pleased that health care providers are looking at other options and trying to provide more choices for Nebraskans — individuals as well as businesses.

Dr. William Lowndes, the family practice physician tapped to start direct care within CHI, said he sees people putting off seeing their doctors, particularly with the growth of high-deductible insurance plans, because they know the first thousand dollars or more will come out of their pockets.

Direct primary care removes that barrier. “People are taking charge and coming in and not waiting,” he said. “Employers are finding people are getting healthier and missing less work, and it costs them less.”

A Strada membership costs $99 a month, plus $79 to add a spouse and $49 for kids under 18. Nurture lists fees of $99 a month for singles and $49 for kids. CHI Health Direct Primary Care memberships start at $80 a month for an individual, with various packages for additional family members.

In addition to the visits themselves, some memberships also cover some in-office procedures, such as stitching cuts or removing moles. Many practices also provide access to low-cost X-rays and medications, sometimes through arrangements with other providers.

Strada, Bessmer said, also has a plan that provides MRIs at a fraction of the cost of going through insurance. CHI Health Direct, Lowndes said, has partnered with CHI’s regional pharmacy to provide 75 generic medications at no extra cost and at least 100 more at low cost.

Nurture offers low-cost generic drugs through Think’s pharmacy. Dr. Todd Johnson, a doctor of osteopathic medicine who operates Access Family Medicine in Lincoln, offers wholesale prices on medications, imaging and manipulations. Access Family Medicine is a direct primary care organization.

Bessmer said Strada has been working with area brokers to get the word out.

Charles Olson, president of OCI Insurance and Financial Services, an Omaha company that works with insurance agents, said OCI suggests direct primary care to people looking for options — especially those who don’t qualify for federal subsidies and might go without health insurance.

In addition to high-deductible plans, people are pairing direct care with short-term medical plans, which cost less but come with high out-of-pocket costs.

Olson expects insurance companies to begin developing more plans around the option. One Kansas City company already offers a reduction in premiums for those with memberships.

Mark Evans, owner of Burton Plumbing in Omaha, began offering a Strada membership to employees with an eye not just on rising costs but also on improving their health. The membership is combined with a high-deductible insurance plan. Employees also can choose a preferred provider plan. More than 50 percent of employees chose the direct care and high-deductible option last year.

Strada provided an initial evaluation with blood testing and created individual health care plans, services similar to those advertised by some other plans. The doctor afterward pulled aside four employees who had health issues that needed to be addressed right away. “They’re so much healthier now,” Evans said. “They just didn’t know how unhealthy they were.”

Under its arrangement with Evans, Strada tests employees’ health metrics every six months and provides healthy living advice, including the best fast food options for those who are out on calls. The company has asked suppliers to stop bringing in doughnuts and replaced them with protein bars that Strada recommended.

Evans said workers can even text Strada to sort out the appropriate treatment for injuries. In one case, a worker suffered a refrigerant burn. He sent a photo and was advised to come in for treatment. If Strada providers can handle the injury, Evans said, the company doesn’t have to file a workers’ compensation claim.

“Our people love it,” he said.

Meanwhile, Evans said, employees participating in the program have improved on every health metric measured, from blood glucose to triglycerides, and the company is on track to save on health care spending.

To be sure, direct care isn’t necessarily for every doctor — or every patient. It might not make financial sense, specifically, if a person spends a lot on health care every year and hits his or her deductible. Nationally, deductibles average $1,500 annually.

However, for people who have plans with deductibles that can sometimes reach $5,000 or even $10,000 annually, a direct-care plan can end up saving money.

For now, direct care members can’t use money set aside before taxes in flexible savings accounts or health savings accounts to pay membership fees, just as they can’t use them to pay insurance premiums. They can, however, use those accounts to pay for eligible medical expenses — such as lab tests and X-rays — offered by a direct primary care clinic. Legislation is pending in Washington that would modify specific IRS regulations to better align direct primary care with health savings accounts.

Carolyn Engelhard, a public health policy expert with the University of Virginia School of Medicine, said she’s concerned, among other things, that stand-alone direct care practices that aren’t connected to a larger system and can’t share information could further fragment care.

The better course, she said, would be to pay primary care physicians to manage patients, not just for office visits and procedures. That’s the tack taken through another primary care model that allows groups that keep patients well and out of the hospital to share in savings.

Still, Engelhard said she believes there is a place for direct primary care. And she and others believe it is here to stay, even if the Affordable Care Act goes away.

Larson, the Strada patient, is all for that. Her husband is self-employed, and purchasing insurance on their own is expensive.

“It’s affordable,” she said of Strada, “and you’re really getting something.”

julie.anderson@owh.com, 402-444-1066

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Julie Anderson is a medical reporter for The World-Herald. She covers health care and health care trends and developments, including hospitals, research and treatments. Follow her on Twitter @JulieAnderson41. Phone: 402-444-1066.

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