Direct Primary Care in Iowa Would Cut Medicaid Costs

Direct Primary Care in Iowa Would Cut Medicaid Costs
(AP Photo/Elise Amendola)

Over the past few years, patients in the Hawkeye State have turned to direct primary care (DPC) primarily due to skyrocketing health care costs. In 2018, Iowa became the 25th state to pass DPC legislation, also known as “not insurance” legislation.

In simple terms, DPC lowers health care costs by allowing doctors to charge patients a flat monthly fee for a wide variety of primary care services. These agreements between doctor and patient eliminate the insurance middleman, leaving more time for doctors to spend with patients and less time filling out paperwork. When DPC agreements are coupled with a high deductible health care plan and/or health savings account, the patient is provided extensive coverage at a fraction of the cost.

Providers are also well aware of DPC’s popularity, opening more clinics to meet the growing need for this service. DPC’s popularity is also due to a shortage of primary care doctors. According to a United Health Group study, by 2030, there will only be 306,000 primary care providers in the nation. This comes as the number of Americans over the age of 65 will increase 48 percent by 2032, according to the U.S. Census Bureau. In the years to come, more patients will need more primary care services.

Although Iowa is one of the states that allows DPC, more can be done to make DPC agreements available for more Iowans.

For instance, some Iowa legislators are attempting to expand current DPC laws and cast a wider net to assist vulnerable populations. One example of this is Iowa Sen. Julian Garrett’s (R-District 13) recently introduced legislation, HF 289, which would widely expand DPC eligibility in the Hawkeye State.

HF 289 would create a pilot program to allow Medicaid recipients to opt into direct primary care agreements if they so choose. Medicaid costs are crippling state budgets, including Iowa’s. Furthermore, Medicaid is notorious for its limited physician pool and lack of quality care.

In 2017, the cost of Medicaid reached $581.9 billion, representing 17 percent of total health care spending nationwide. There is ample evidence that Medicaid costs will continue to increase. According to a recent report from the Centers for Medicare and Medicaid Services, Medicaid expenditures are expected to rise at an average annual rate of 5.7 percent from 2017 to 2027, a rate that far exceeds annual U.S. GDP.

Reducing Medicaid costs so that more money could be put back into the taxpayers’ pockets should be a top priority for all legislators. If COVID-19 taught us anything, it shed light on inefficient systems our society has in place.

One of those systems is health insurance. If DPC allows practitioners to provide quality, convenient, affordable care by avoiding an insurance middleman, why wouldn’t we allow Medicaid patients to enroll in DPC agreements?

The reality is that studies show DPC reduces medical costs, potentially by as much as 40 percent annually, according to the Docs4Patient Care Foundation.  Moreover, a study in the American Journal of Managed Care found DPC patients are 52 percent less likely to use services at an expensive hospital than at a traditional private practice.

Health care is a transformative industry and our public servants ought to advance policies that makes the health care system simpler for patients to navigate. DPC achieves that goal, while also improving patient outcomes, and at a lower cost.

I urge politicians to remember the constituencies they represent. Rural residents are almost five times as likely to live in a county with a primary care physician shortage compared to urban and suburban areas.

DPC agreements arrest the growing primary care shortage, which benefits patients and doctors alike. Under DPC agreements, doctors are able to spend more precious time with patients while making more money because of less overhead costs. Giving patients an equal opportunity to access affordable, quality, convenient health care ought to be the ultimate goal for all Americans. HF 289 does just that by offering the most vulnerable, those on Medicaid, the opportunity to enroll in a patient-centered approach by which they will receive quality, affordable, and convenient health care.

Christina Herrin ([email protected]) is the government relations manager at The Heartland Institute, a nonpartisan, free-market think tank headquartered in Arlington Heights, Ill.

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