The COVID-19 economic lockdown hasn’t just affected your favorite local restaurants and bars, but also your primary care physician. Many independent practices may permanently close. Others will survive by embracing new ways of practicing medicine.
In the traditional fee-for-service model of physician care, doctors get paid the more often they see you. So when COVID–19 hit, and people started staying at home, doctors’ revenues collapsed. A recent study by researchers at Harvard and Phreesia, a health care software company, found that physician office visits declined as much as two-thirds at the peak of the pandemic. There has since been a modest rebound; as of May 10, office visits were down 31 percent from pre-pandemic levels.
If the shutdown is prolonged, many independent practices will permanently close. A 2016 survey from the JPMorgan Chase Institute found that the average small health care business had 30 days of cash in reserve, meaning that one could survive for 30 days with no revenue at all. In the current crisis, that means that the typical independent practice could go belly-up by the end of June.
In primary care practices, the impact has been especially hard. A survey by the Larry A. Green Center conducted between May 8 and 11 found that 40 percent of physician practices have had to furlough or lay off employees, while 23 percent have gone into debt.
Congress has thrown trillions of dollars of taxpayer funds into the coronavirus crisis, with $100 billion earmarked for hospitals, and $300 billion in small business loans. But little of that money has made it to small physician practices, which lack the bandwidth and lobbying skill to draw down those funds. Indeed, the initial tranche of hospital assistance money was sent to hospital systems who had billed the most to Medicare—irrespective of providers’ actual financial need.
It’s a double-whammy for everyday patients. Patients are not seeing their doctors, which has significant public health consequences. And as physician practices close, or get sold to larger systems, patients struggle to gain access to affordable care.
Direct primary care: A path to financial stability
Today, primary care practices are the most financially vulnerable. But they are fortunate in one sense: they have a way out that other outpatient physician clinics do not. That way out is direct primary care.
In a direct primary care model, doctors receive a monthly fee from their patients, comparable to a cell phone or cable TV plan, regardless of whether the patient comes in or not. In exchange, the patient has access to services that conventional health insurers don’t cover. Patients benefit from the broader and deeper involvement of their doctors in their lives.
Instead of the typical 21st-century schedule in which the average patient encounter with a doctor lasts 5 minutes, direct primary physicians can spend 30 to 60 minutes with their patients—or even longer. That leads to better insights and better management of chronic medical conditions.
Physicians benefit from this model as well, not least because they’re less harried. The stable, predictable monthly revenue stream means that direct primary care practices are largely insulated from the volatility of patient visits that we’re seeing during the pandemic. And physicians can spend far less time—and money—haggling with insurers over their reimbursement rates.
Some people think of direct primary care as “concierge medicine,” by which they mean that it’s only available to the wealthy. But flip that on its head. The people most in need of concierge medicine are low-income Americans on Medicaid, who today struggle to obtain doctor’s appointments because Medicaid reimbursement rates are so much lower than those from private insurers.
Congress needs to open direct primary care up to more patients
Indeed, there’s no reason why every American shouldn’t have a direct primary care doctor. We should restructure Medicaid so that a fraction of Medicare funds goes to pay for a direct primary care physician for every Medicaid enrollee. And Congress should clarify confusing rules so that Health Savings Accounts and Health Reimbursement Arrangements can be used to obtain direct primary care services.
In March, Congress spent hundreds of billions of dollars paying people not to work, thereby forestalling the economic recovery. Instead, Congress ought to consider helping ordinary Americans establish Health Savings Accounts that can be used to buy direct primary care. This would be a way of offering needed financial assistance to those who’ve lost their jobs, while still giving those workers the incentive to find work.
Such Congressional action could have the important side effect of boosting primary care practices, and thereby the quality of health care for all Americans.