Hawaii Lawmakers Struggle to Define Direct Primary Care

by Marcus Rech and Michael Hamilton, Heartland Institute, May 5, 2016

After initially approving legislation defining concierge medicine as a form of “direct primary care” (DPC) that bills patients directly in addition to billing their insurance companies, the Hawaii House of Representatives has approved the Senate’s amended version of the legislation. The Senate version distinguishes between concierge and DPC and requests a state agency to survey how each payment model has “penetrated the Hawaii health care marketplace.”

House Concurrent Resolution 157, sponsored by Speaker Joseph Souki (D-Kahakuloa) and adopted in final form on April 27, requests the insurance division of the Department of Commerce and Consumer Affairs (DCCA) to survey how health care delivery arrangements such as DPC, concierge medicine, and accountable care organizations have affected patients’ access to primary care services in Hawaii.

Faulty Definitions?

Dr. Phil Eskew, founder of DPC Frontier, says the bill’s language requesting the insurance division of DCCA to conduct a survey suggests Hawaii lawmakers don’t understand what DPC is.

“The authors of this bill are likely skeptical of direct primary care due to their own misunderstandings,” Eskew said. “They thus are attempting to gather data on it. Further demonstrating their ignorance, they are not defining it properly, not gathering useful data, and do not realize that there are not any direct primary care practices within their state.”

Rep. Angus McKelvey (D-West Maui), a cosponsor of HCR 157, says the survey will tell lawmakers how DPC is working in Hawaii.

“This resolution will not directly impact the health care industry, for its main purpose is that the Insurance Division of the DCCA conducts a survey surrounding health care providers and to see how DPC is working in our state,” McKelvey said. “From this survey, we will have more information in order to tailor future legislation to help our Hawaiian population and the rest of the state that is in need of proper health care.”

Concierge Confusion

HCR 157 originally defined concierge medicine as “the practice of financing direct primary care through direct payments by consumers, usually in the form of monthly fees, and the billing of patient health insurance plans.” The text identified DPC and concierge medicine as essentially the same, using the phrase “direct primary care, or ‘concierge medicine,’” four times.

Dr. Richard Armstrong, treasurer of the Docs4PatientCare Foundation, says DPC and concierge medicine represent fundamentally different payment models.

“Direct primary care does not deal with any third-party payers,” Armstrong said. “Concierge practices offer enhanced services like email, 24-hour availability, home visits, and more, but they still bill the patient’s insurance.”

Eskew says conflating the two services complicates the discussion.

“When legislators ignorantly confuse direct primary care with concierge, they just confuse everyone,” Eskew said.

The approved version of HCR 157 states “concierge medicine involves a relationship between a patient and a primary care physician in which the patient pays an annual fee or retainer, which may be in addition to other charges.”

The next clause appears to treat DPC practices as “lower-end concierge medicine practices,” which “usually do not accept insurance but instead charge patients directly for treatment along with membership and may post menu-style prices for services and expect payment up front.”

Concern Over Graying

The bill lists Hawaii’s aging population as a reason for requesting the survey. Persons aged 60 or older constitute 18.7 percent of Hawaii’s population, and that will increase to 27 percent by 2030, the bill states. The group is expected to increase by 94 percent between 2000 and 2030, a period in which Hawaii’s total population is expected to increase by 21 percent, according to the bill text.

Armstrong says direct primary care offers seniors a positive alternative to Medicare.

“There is no prohibition to a Medicare-aged patient buying a direct primary care membership,” Armstrong said. “Our foundation president, Dr. Lee Gross, has a direct primary care practice in North Port, Florida, and has Medicare patients. He just doesn’t bill Medicare.”

Poor Man’s Health Care?

Another of the legislation’s stated reasons for the survey is the swelling of Hawaii’s Medicaid and Children’s Health Insurance Program (CHIP) rolls to 338,000 participants.

DPC could make Hawaii’s Medicaid program more cost-effective, Armstrong says.

“Currently, there are pilot programs being considered in both the Medicare and Medicaid programs,” Armstrong said. “Qliance in Washington State has already completed a pilot study and was able to demonstrate a 20-percent reduction in Medicaid dollars spent in that group as a result of the patients having their own personal doctor.”

Getting DPC Legislation Right

Eskew says straightforward legislation protecting DPC will encourage doctors to offer patients new ways to pay for health care.

“Hawaii needs to get DPC legislation right for the same reason that other states need to get it right,” Eskew said. “Correctly drafted DPC legislation clears up legal gray areas in state law and lowers legal barriers to entry so that more physicians are willing to adopt the DPC model.”

Eskew says the right legislation would recognize DPC as being distinct from concierge medicine and insurance.

“Pass actual DPC legislation that properly defines DPC and clearly defines it as outside of insurance,” Eskew said. “They can look to many other states for examples. Two great examples just passed in this session [are in] Wyoming and Tennessee.”

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Marcus Rech (mr308512@ohio.edu) writes from Centerville, Ohio. Michael Hamilton (mhamilton@heartland.org) is The Heartland Institute’s research fellow for health care policy and managing editor of Health Care News.

Internet Info: Matthew Glans, “Direct Primary Care is Not Concierge Medicine,” Research and Commentary, The Heartland Institute, April 18, 2016.