A 2016 Kaiser Family Foundation/Health Research & Educational Trust (HRET) Survey showed that nearly half (51 percent) of U.S. workers were members of health insurance plans that required a minimum out of pocket expense of $1,000 before coverage began. This survey also revealed price hikes of 19 percent in single-coverage premiums and 63 percent in single-coverage deductibles. Compare that to a weak 11 percent rise in workers’ wages over the past five years and it becomes clear why many Americans are looking to trim costs wherever possible (1).
This disparity between the rise in health care costs and employee compensation is a key catalyst for the creation of a unique, new health care model: Direct Primary Care
What is Direct Primary Care?
Direct Primary Care (DPC) is a fast-growing movement of medical professionals who are opting for a different kind of health care approach – one that doesn’t include health insurance. The practice, modeled after concierge medicine, is sometimes referred to as “concierge on a budget” – and it’s sweeping across the country at a time when high-deductible health plans are becoming more common-place.
DPC charges can vary greatly from office to office, with membership fees ranging anywhere from $60 per month for a single adult to $150 per month for a family of four, with a nominal $15 charge for each additional child. Services offered through memberships vary, but can include:
- Same-day appointments
- 30 to 60-minute office visits, with little or no wait times
- House calls
- Telemedicine – including unlimited calls, texts and/or emails with attending physicians
- No co-pays or deductibles
- Prescriptions dispensed in house, or locally through contracted independent and community pharmacies
Direct Primary Care and the Local Independent and Community Pharmacy
There are many ways a DPC can work with its local, independent, and community pharmacies. Some arrangements include:
- Contract with pharmacy to provide drug wholesale services
- Contract with pharmacy to provide drug management services
- DPC/Pharmacy partnership
While many DPCs will opt to dispense generic medications in-house, they can – and often do – contract with local pharmacies for wholesale pricing on those generic medications. Further, by contracting with local and independent pharmacies to provide prescription services for member patients, DPCs can keep office overhead expenses lower and, therefore, patient membership prices lower.
There are even more benefits a DPC can realize by working with local pharmacies. Some of these advantages include:
- Expanding business; increasing bottom line
- Providing a more efficient level of health care service
- More closely monitor a patient’s medication management
- No health plan restriction/requirement on in-network pharmacy providers
Over three quarters of Americans believe prescription drug prices are unreasonable (2). In fact, the projected 2017 prescription drug price increase of 8 percent is more than double the actual medical cost increase of 3.6 percent (3). So, it’s no surprise that one of the biggest out of pocket expenses for Americans’ health care today is believed to be the cost of medication.
Keeping health care local and community focused whenever possible benefits both providers and patients by lowering overall cost. This lower cost can be achieved through:
- Convenience - local pharmacy services are a convenience that also helps to lower overall cost
- Economic stimulation – keeping health care local keeps dollars local – and it helps boost local economies, which can lower costs
- Options – with more traffic into local, community, and independent pharmacies, there is a larger opportunity for your practice to offer services such as:
○ Medication management
○ Specialty pharmacy
The Bottom Line
The medical environment in the U.S. is shifting quickly. Providers need to be open and flexible with their practices, while being ready to provide exceptional services that are highly patient-centered.
DPC is one of many evolutions that will make its way into the health care field over the next few years. Some may change the landscape of medicine; others may not. But, keeping our eyes on these changes and the growth possibilities they’ll offer is just one of the many ways we can help provide valuable information to our member pharmacies.
Be sure to follow this blog for more regulatory and reimbursement intel, tips, insights and bulletins that can save you money – all from your partners at AlliantRx.