The gym club model. For healthcare?

Addressing those new to the idea, direct primary care partisans often start to explain the model by comparing it to membership in a fitness club with nearly unlimited access for a fixed monthly fee.

I’m puzzled.

Gym clubs are subject to high member churn rates. Is this wise for health care?

High churn owes in part to people signing up who then turn out for whatever reason to have low utilization. Low utilizers pay the same price as those who use the club’s resources more frequently. In the health care context, that seems similar to kind of subsidization built into the ACA’s community rated, full benefit packages. Yet, some of the most strident voices opposing such subsidization in Obamacare lead the charge for a primary care model in which low utilizers subsidize high utilizers rather than a model in which each person pays for the primary care they get.

The demand for time on the best exercise machines at gym clubs cycles up and down, varying enormously by time, day of the week, and date of the year. Periods of excessive demand are likely result of an unlimited access model. If your gym is slammed on January 2nd because of New Year’s resolutions, you just go home and no harm is done. Your unlimited access clinic and its two doctors might, on the other hand, be slammed with flu case appointments that, in the absence of “unlimited access”, might never have been made. If you need a truly urgent appointment, you might wish you had elected fee for service primary care.

Once fixed fee arrangements are in place, there is no “skin in the game” to keep a lid on overutilization. Yet, some of the same organizations that spent decades touting “consumer driven”, high deductible policies as an important response to overutilization, currently endorse prepaid, fixed fee direct primary care.

To pursue a revenue boost for its clinics, the direct primary care establishment seeks federal legislation that would allow HSA funds spent for direct primary care subscription fees to fulfill high deductibles. Yet, to a consumer, DPC membership fees work quite like payments of health insurance premiums in transferring most of the immediate, specific costs of a doctor from the patient to a different payer. Why do institutions that have long argued that “skin in the game” is paramount, specifically support taking skin out of the primary care game?

Direct Primary Care Poster Child Qliance has collapsed.

I  had  told  you  that would  happen  and  why.

It did, and now 25,000+ people have had less than a month’s notice to make new primary care arrangements. But the whole idea of direct primary care was to have been that these patients chose to pay a subscription fee to Qliance instead of maintaining an insurance plan adequate to their primary care needs.

Do Georgia conservatives still want to free direct primary care companies like Qliance from having to maintain reserves to assure that patients are protected when direct primary care providers go under? Somehow, I am sure they do.

Giant direct primary care pioneer Qliance has turned to online begging.

“No deductibles or copayments, but we have a coin box at the reception desk for your donations.”

Qliance, the first corporate provider of insurance-free direct primary care and one of the three largest, seems to be headed down the drain. It has taken to online begging at gofundme.com.

Not even ten days before the donation drive began, Qliance was the leading poster child for direct primary care. A Forbes article by Daniel McCorry and Katherine Restrepo said this:

Washington State is deservedly recognized as the birthplace and one of the most prominent frontiers for DPC, in large part because of Qliance. The Seattle-based DPC conglomerate is recognized as an exemplary market force in the private sector of health care.

They went on to praise the State of Washington for its exemplary DPC-friendly legal and regulatory environment.

Qliance was the first, and only, direct primary care provider to have Medicaid patients. It was the first to be part of a plan on an ACA Exchange. It operates in the best state for direct primary care. It has over 35K patients; and it has over $20,000,000 in annual revenues.

Despite these revenues, lenders have not been impressed with Qliance’s business model.  So, now that it needs to raise $1,000,000 in about ten weeks, Qliance has decided to beg. Today, gofundme; tomorrow, coin boxes at the reception desk.

If the crash of Qliance surprises anyone, it will be those with unrealistic expectations of what direct primary care can accomplish. The above-quoted article by McCorry and Restrepo, for example. promises such an intensive level of primary care that expensive “downstream” care, like specialist consults and ER visits, can be cut by 66% and 65% respectively. Eliminating all overhead expenses associated with billing and insurance is said to make all this possible, because doing so is presumed to enable physicians to reduce their patient patient panel size by fifty percent (50%) or more.

Actually, that’s inconceivable.

A 2014 quantitatively detailed, peer reviewed academic study of billing and insurance-related administrative costs for physician practices found that these came to thirteen percent (13%) of gross revenues. So physicians could drop their panel size by thirteen percent (13%) and increase their face time with patients by fifteen (15%).  [Hint: divide average length of patient visit by 0.87.] 15% more face time does not produce miracles.

But surely 15% more face time will help reduce “downstream” care a bit? Sure. In 2015, Qliance’s most recent report claimed to have reduced specialist consults and ER visits, but only by fourteen percent (14%). Seems reasonable, a lot more reasonable than 66%. And specialist and ERs are expensive, so maybe there’s some net savings here, even at 14%, right?

Maybe. But Qliance is obviously having trouble persuading lenders, investors, or partners that it can perform that well.

Where did those inflated expectations for direct primary care, like a 65% reduction in specialist visits, come from.  They came from a table by Qliance summarizing unpublished internal data from a 2010 investor pitch by Qliance. They were mentioned in a feature article written for the British Medical Journal in 2013. Though this was not a research article, the gaudily-high figures were passed off in a Heritage Foundation report written by McCorry, as “a British Medical Journal study of Qliance.”

Qliance knew better than to try to pass these wildly high numbers off as “a British Medical Journal study”. On February 6, 2017, McCorry, writing in Forbes, again published the numbers from 2010, but this time without any link or citation.  Now that Qliance is in dire straits, however, those exaggerated 2010 results  – now attributed to Forbes – have made their way into Qliance’s gofundme pitch; their more recent and more relevant but far less compelling results have not.  That is precisely why you, in your exercise of due diligence, should not donate to Qliance.

A final note. Reducing billing and insurance overhead can be accomplished by a single-payer system perhaps even more easily than by direct primary care. But whether the system is fee for service, single payer, or direct primary care, the physician’s conjoined choices as to the size of her patient panel and the size of her income are the dominant drivers of the amount of personalized care each of her patients receives, far more so than the mechanism by which she is compensated. More intense primary care may have some net positive benefit, at least up to a point, but there is no clear evidence that that benefit is unique to the direct primary care model.

Going insurance-free does not, and cannot, reduce the overhead expenses of primary care practices by 60%, or even 40%.

Updated 4/4/21.

About 13% of revenue (22% of overhead) according to peer reviewed academic research. 

I’ve back-tracked Katherine Restrepo’s and Julie Tisdale’s 2016 claim that:

By dealing directly with patients and filing no insurance billing whatsoever, DPC practices are able to eliminate 40-60 percent of their overhead expenses.

A footnote there takes you to a 2015 Katherine Restrepo article in Forbes that says:

By cutting 40 percent of overhead that is normally spent on getting paid by insurance companies, primary care providers can devote hour-long appointments to their patients and deliver care at a fraction of the cost. (Emphasis supplied.)

Meanwhile, follow the link in Restrepo 2015 to an article by a free lance reporter, who wrote this: 

Jay Keese is the executive director of the Direct Primary Care Coalition, an advocacy group representing DPC physicians, residents, and medical students. 

<snip>

“What direct primary care does is takes out all the administrative costs so the cost of getting paid for primary care is gone,” Keese says. “We look at that as a 40 percent cost differential. Currently 40 percent of a practice’s expenses are spent on getting paid. Because the doctor is paid directly in direct primary care, some of that savings goes to increase payment to the physician and some of that is just savings to the system.” (Emphasis supplied.)

Keese is a long time lobbyist and political consultant. He does have B.A. in history and he does have the delusion that direct primary care will not entail any administrative costs of getting paid: no costs for soliciting and negotiating direct primary care contracts with individuals, employers, or other payers; no costs of billing or processing payments; no membership cards or annual renewals; no bounced checks, late payments or defaulting payers.

IRestrepo-Tisdale 2016 does not explain the bump up to 60% from the 40% from Restrepo 2015 up to as high as 60. But a similar claim has more recently been put forth by Gayle Brekke whose blog post, on which I have already commented, says:

Between administrative staff, EMRs and other practice expenses driven by third-party payers, the overhead for a typical traditional practice is about 2.4 times higher than the overhead of a typical direct practice. 

What Keese (40%) Restrepo-Tisdale-Brekke (60%) do not have is any reliable evidence for these wildly inflated claims. 

Rather than rely on endlessly recycled alternative facts, look instead at this 2014 quantitatively detailed, peer reviewed academic study of “Billing and insurance-related administrative costs in United States health care“. Its evidence-based figure for billing and insurance-related costs in physician practices puts it at thirteen percent (13%) of gross revenues**. This works out to a bit over 20% of the estimated 60% overhead expenses for family practice physicians.

Even if going insurance-free could eliminate all costs of getting paid (it can’t), thirteen percent (13%) of revenues is a figure that could support primary care physicians being able to increase their time with patients, while keeping their income the same, about one-third.

A third more time is significant, but hardly revolutionary. Claims that eliminating all billing and insurance-related overhead will cut patient panels by half or more and triple regular appointment times up to the hour mark, and do it all at a fraction of the cost, are far out of line. 

Deduct any reasonable amount for the costs of getting paid, some of which will exist even for direct primary care clinics, and the ability of insurance-free direct primary care to work miracles of any kind is all the more questionable.  

No wonder it is so easy to explode the phony claims of savings made for such poster child examples of direct primary care as Qliance, Empower3 (formerly PHS) and Union County.

** Gayle Brekke’s bottom-line calculation, which is based on her misreading certain statements from a non-research article in which a single practitioner described his own solo practice, results in the nonsense of negative overhead: “a typical DPC practice” reducing a potential $13 of billing and insurance overhead per $100 of revenue by almost $22 per $100.

The only academic journal studies on point failed to show the efficacy of direct primary care.

Georgia’s conservative fans of direct primary care swoon over PHS, a 1500 member, insurance-free, hospital-based, direct primary care clinic in Altoona, Pennsylvania. PHS was the subject of not just one, but two quantitatively detailed academic journal articles addressing the efficacy of direct primary care. Since the oft-cited British Medical Journal study on the efficiency of direct primary care does not actually exist, the two articles on PHS appear to be the only academic studies addressing the question. Yet, though the author list of both articles includes the clinic’s own medical director, the data presented do not show that the direct primary care (DPC) model is superior in any way to traditional insurance-based primary care.

Astonishingly, the articles tell us that the entire physician staff of the clinic amounted to three part-timers, two of whom were uncompensated volunteers and one of whom was paid only $24,000. The total value of the donated physician services can not even be estimated, because neither article tells us how many hours or full-time equivalents the primary care physician staff worked at giving primary care. The omission is fatal to any attempt at cost-benefit analysis — and astonishing, given that direct primary care advocates usually claim that greater PCP contact is the essential source of every virtue attributed to direct primary care.

The authors do present data suggesting that primary care received in the insurance-free direct primary care clinic helped reduce the number of emergency department visits. But there was no attempt to show that the insurance-free direct primary care clinic was any better than insurance-based primary care at calling forth this somewhat obvious by-product of primary care.

The twin articles undertook only one direct comparison of the effectiveness of the clinic to that of insurance-based practices. That effort revealed that the hospital admissions rate for PHS members was about 55% of the rate for those who received primary care through nearby insurance-based practices.

The authors eagerly attribute this large difference in hospital admission rates to the superiority of the insurance-free direct primary care model on which PHS was built. But there is a better explanation.

For the years under study, about 1 in 6 adults in the US was uninsured. But only about 1 in 16 hospital admittees were uninsured patients. In other words, the uninsured typically have a hospital admission rate that is about 3/8ths that of the insured. Might that be because, relative to the insured, the uninsured have trouble paying for hospital stays?

Whatever the explanation, it turns out that 70% of the clinic’s members are uninsured, while 30% carry hospitalization insurance. Based on these proportions it can reasonably be projected that the PHS population would have had a hospitalization rate of about – you guessed it  – 55% that of a fully insured population. Most likely, enrollment in the PHS clinic had no impact on the rate of hospital admissions.

Benefit? None shown. Cost? Failed even to include the cost of direct primary care physicians who delivered the direct primary care!

In sum, the only quantitatively detailed academic studies of the cost-effectiveness of direct primary care failed to show that direct primary care was in any way superior to insurance-based primary care.

There never was a British Medical Journal study of Qliance.

The most heavily relied-on “study”purporting to prove the effectiveness of direct primary care is an important marker in a national debate with real consequences. But it is not a study at all.

In certain quarters, anything that appears on the sacred webpages of a Heritage Foundation report is taken as gospel truth.  So, when Heritage cited,  and even linked, what it called “a British Medical Journal study of Qliance” that “showed” what Heritage then presented as “positive results” of a “study” very favorable for direct primary care offered by Seattle-based Qliance, the data was re-presented dozens of times.

There was one source that might have been expected to promote a favorable “British Medical Journal study of Qliance” with particular enthusiasm — Qliance itself. Rather tellingly, it didn’t. The company must have known something that was not discernible to Daniel McCorry, the Heritage graduate fellow who wrote the misleading report.

The prestigious “British Medical Journal study of Qliance” for which Heritage claimed “positive results” does not – as such – exist. The item on which McCorry relied was not a research report of empirical results; it contained no quantitative detail; it was not peer-reviewed; and it certainly was not a British Medical Journal study. It was a BMJ news feature, by a journalist rather than a scholar, that included some figures simply transcribed without evaluation from a table summarizing data compiled by Qliance itself and “published” only in a slide show targeted at potential investors in its direct primary care business. Moreover, probably to reduce the danger of liability for defrauding those very investors, the table itself bore this red flag:  “Based on best available internal data, may not capture all non-primary care claims.”

But  McCorry had just completed his first year of medical school at the time. perhaps Georgetown SOM does not teach its students how to critically read a medical journal until second year.  Did McCorry achieve a passing grade in Georgetown’s required first-year course in evidence-based medicine, the one about “critically assessing various information sources” that “prepare(s) students to evaluate medical literature?” Did he have a problem with the BMJ paywall?

As if to underscore a real need for real research, Qliance’s self-assessments of effectiveness have varied over the years by as much as four-fold. For example, the table quoted in the October 2013 BMJ feature announced that Qliance members had 66% fewer ER visits and 65% fewer specialist visits than similar patients; less than fifteen months later, a Qliance press release reset both measures at a mere 14%. And fifteen months after that, in February 2017, McCorry, now an M.D., was still republishing in national media the older, gaudily-large figures sans the Qliance’s own warning of their severe limitations.

Serious research on Qliance’s effectiveness has yet to appear.

McCorry pulled even more impressive numbers from an actual peer-reviewed medical journal article, wasting spilling proportionally more ink in the process. Unfortunately, that American Journal of Managed Care piece was not a study of insurance-free direct primary care at all.

It’s subject was MD-VIP, a high-end concierge network that serves insurance-based primary practice physicians. McCorry simply misidentified it as a direct primary care group. MD-VIP sells an add-on package of exclusive easy access, extra screenings, and wellness benefits for which patients pay an annual fee that averages $1800. Patients still maintain insurance for all the usual primary costs; the physicians still bill for ordinary primary care; and the patients are still liable to the physicians for the usual copays and deductibles. To be fair to McCorry, he might have had to read almost eighty  words of the article before reaching the first indication that the studied patients were largely insured for primary care. Now that D.M. is an M.D., I’ll bet he knows what MD-VIP actually is.

From Heritage lips to the ears of all fighters for health care freedom: the MD-VIP blunder was, like the Qliance falsehood, repeated dozens of time.

************************

Update: February 23, 2017. Qliance appears to be in serious trouble.  Despite over $20,000,000 in annual revenues, there is a gofundme.com site seeking $1,000,000 in the next few weeks for Qliance, which has not been able to borrow what it needs. Astonishingly, the gofundme pitch quotes verbatim the outsized, outdated 2010 Qliance figures, attributing them to Daniel McCorry’s February 2017 article in Forbes, where they appear without any attribution at all.

Direct primary care is no excuse for parsimony.

I am currently trying to get the following published as a newspaper op-ed. AJC has a version like this one.

In a December 16, 2016 column, “Trump’s win opens the door for Medicaid alternative in Georgia”, the AJC’s  Kyle Wingfield promoted a Georgia Public Policy Foundation plan for Georgia’s 565,000 uninsured adults. Legislation partially paving the way for the plan is before the Georgia legislature as Senate Bill 50 and House Resolution 182. The Foundation’s plan is parsimonious to point where it should not be taken seriously, either by those concerned to improve health care access and quality for low incomes persons or even by those whose primary concern is to save costs.

The underlying concept is that adults below the poverty line can receive all needed health care at a cost of $2500 per year. $1750 of that budget provides for a catastrophic care insurance policy, intended to address all medical needs beyond primary care. That leaves $750 to pay for primary care to be received in an insurance-free direct primary care (DPC) setting in which a single annual membership covers all primary care costs. Such practices would have very modest copayments and deductibles, or none at all.

According to direct primary care advocates, reducing overhead expenses by eliminating insurance radically transforms health care delivery. Doctors have more time for patients and the resulting superior care ends up reducing those patients’ need for costly additional services like expensive medications, specialist consults, emergency department visits, and hospital stays.

However promising direct primary care may be, it simply cannot manage the miracle of bringing the health care costs of an adult down to $2500.  And, the actual experience of two DPC clinics, each highlighted in recent Georgia Public Policy Foundation publications, make clear just how far off the Foundation’s budget is.

To start with, the membership fee for each DPC is at least twice the $750 in the Foundation’s model.  A lot higher. The Union County, North Carolina, employee programto which the Foundation refers pays a direct primary care company $1500 a year for each adult enrolled. The current price for membership in the Empower3 clinic in Altoona, Pennsylvania, is even higher. For 565,000 adults, the Georgia think tank’s 425 million dollar primary care clinic budget comes up more than 425 million dollars short. This does not make them half right; it makes them all wrong.

What about the Foundation’s $1750 budget for services not provided in a direct primary care clinic?  Because Union County self-insures, it is uniquely positioned to capture the savings, if any, generated by direct primary care for those non-primary services like non-generic drugs, specialist visits, and hospital stays.  Even so, beyond the $1500 DPC annual fee, the remaining medical expenses for Union County employees come to well over $4000 per person. The Foundation’s $1750 budget for these same expenses is plainly inadequate.

At Altoona’s Empower3, clinic members insure expenses beyond those in the clinic’s $1560 per year package by purchasing high-deductible insurance policies. For just under $1750, such a policy is available in Altoona only to those under 27 years old, and it comes with a deductible of about $7,000.  If, instead, you are a 42 year-old, whether in greater Altoona or in comparably-sized Athens-Clarke County, Georgia, a similar high-deductible policy runs $3,000 a year.

The Altoona direct primary care model – the Foundation’s first poster child – adds up to $4560, $1560 for the DPC member fee and $3,000 for the insurance policy.  But how would indigents receive non-primary items (like ER visits or hospital stays) that fell in the $7,000 deductible hole? Low income Georgians could manage only a very modest share of these costs. Major burdens, like the first few days of a hospital stay before the high-deductible policy kicked in, would have to be borne, just as they are now, by Georgia hospitals.

For the Foundation’s second poster child, the Union County direct primary care plan,  its $1560 membership fee and its additional expenses of well over $4000 add up to well over $5500.

What does not add up is the Georgia Public Policy Foundation’s $2500 per person plan.  That policy is plainly aimed at something other than improving health care access and quality for Georgia’s low-income uninsured population. Direct primary care is no excuse for parsimony.

Did direct primary care save Union County $1,280,000? Don’t bet on it. [Updated 1/6/18. Re-updated 1/13/20]

See 2020 update below.

A 4+ – year age gap between two health care enrollee pools explains a lot.

DPC advocates find their poster child.

A group of self-declared “fighters for health care freedom”, such as North Carolina’s John Locke Foundation and its Director of Health Policy, Katherine Restrepo, have been heavily promoting a health care delivery vehicle known as direct primary care, or DPC. They claim that direct primary care reduces health care costs and improves health care quality, primarily by having patients receive primary care through an insurance-free clinic. The savings in insurance overhead will presumably allow direct providers more time for patient primary care and that, in turn, curbs clinic members’ need for additional services outside the clinic like expensive specialists, emergency rooms, hospitals, and costly medications.

Ms. Restrepo found her poster child for direct primary care in tiny Union County, North Carolina. She tell us that, when compared to County’s average costs for the 1120 employee and dependent lives in the County’s more traditional insurance plan without DPC, direct primary care yields the County an impressive 23% cost savings amounting to a $1.28 million dollars a year, or $260 per employee per month. By another measure, the county is said to have 28% cost savings.

But there is good reason to believe that the reported savings are simply the result of selection bias. A an age gap of over four years between the two pools seems to explain a lot.

Here are just five of many possible avenues for selection bias that seem likely to affect Union County enrollment choices.

Beginning in the county’s 2015-16 fiscal year, Union County employees were given, for the first time, a DPC alternative to the county’s more traditional insurance plan.  If they elected the DPC, they received unlimited primary care, with no deductibles or copayments, but only through one of two doctors at the DPC clinic. If they declined DPC membership, they were allowed to see any primary care physician they wished, but they did so in traditional pay as you go practices subject to deductibles and coinsurance.

Despite DPC’s considerable financial inducements, 59% of Union County employees elected a traditional pay-as-you-go-with-doctor-choice plan over DPC’s all-you-can-eat approach. A highly probable explanation for this tilt to the traditional plan is that the narrow selection of physicians in the clinic is a barrier to enrollees unwilling to sever established relationships with their previous primary care physicians.

The strength of bonds to prior PCPs are likely to increase for patients who have had close relationship with their PCP, one fostered either by a history of serious health problems or simply by having had the same doctor for a long time. The narrow physician panel of the direct primary care clinic, therefore, could be a potent generator of age and health status selection bias adverse to the traditional plan.

Consider also that every new employee entering the county’s health plan has, since DPC became available, been defaulted into direct primary care. New employees are apt to be younger than the existing employee complement, so decisional inertia may be a potent source of age selection bias.

Furthermore, as part of her case for direct primary care, Ms. Restrepo points out that the DPC clinic is located near county offices, making appointments convenient for the hundreds of county employees working there. While this is likely to attract current employees into DPC, Union County’s health enrollment includes about 150 retired former employees, not yet eligible for Medicare, for whom the clinic’s location is no particular advantage. Since current employees are usually younger on average than retired employees, the clinic’s location may be a yet another significant source of age selection bias.

Next, consider the selection bias resulting from the special attractiveness to families with multiple children of DPC’s absence of copayments. Premiums (in either the DPC plan or the traditional plan) paid by employees with dependent children are the same for any number of children. But the larger an employee’s family is, the more significant the absence of copayments under DPC becomes. The DPC pool skews young by pulling in families with more children per employee.

Finally, at every signup or renewal point, there will be a certain number of potential members who know they are all but certain to exhaust their out-of-pocket maxima during the upcoming coverage period. Some may be in a hospital at the very moment of renewal. Some may be awaiting an already scheduled  surgery, a planned course of chemotherapy, or the delivery of a child. Some will just have chronic illness that exhaust their OOP year in year out.  Such members will anticipate having as many primary care visits as they wish without paying a financial penalty, even under traditional fee for service. For them, higher health care costs are themselves the source of a reduced incentive to choose direct primary care. 

And some of those who will expect to exhaust OOPs are likely to have particularly high claim costs. About 1.2 % of claimants in group insurance pools are so-called “high cost claimants”, with annual claims in excess of $50,000; Their average annual claims exceed $120,000 per person and combine to account for over 30% of all claims. Each high cost claimant that has leaned away from direct primary care will account for 10% of the claimed $1.28 million savings.

Are DPC advocates oblivious to age-cost curves or merely pretending to be so?

Unless asked a direct question, DPC advocates withhold that there is an age gap between the younger direct primary care pool and the older traditional insurance pool that exceeds four years.

Age matters though, and it matters a lot.

Age-cost curves for health care are steep. Many conservatives argue that the costs for 64 year olds are five fold higher than costs for 21 year olds; they argue that premiums should reflect this 5:1 ratio and nothing less. Of the 3:1 ratio mandated by the Affordable Care Act, JLF’s Restrepo personally complained that “Obamacare causes chest pain” because “[t]he old and sick [ ] benefit at the expense of the young and healthy”.

As an interim step pending legislation to establish a 5:1 ratio, the Trump administration once floated the idea of moving by administrative fiat to an age-premium curve of 3.49:1. On that curve, the age gap between the two Union City groups in age would explain every penny of a 23% difference between the health claims experience of the two populations.

A 5:1 curve would imply that offering the DPC plan cost the county nearly $600,000. Now Ms. Restrepo, the biggest booster of the Union County DPC, has gone silent on age-cost curves. Really.

[If direct primary care is indeed no better than traditional care at reducing overall costs, this is a very plausible number. The county paid the direct primary care provider an annual membership fee of $1500 per adult. Enrollees in the traditional plan received instead a health reimbursement account of not more than $750. Put otherwise, the county’s upfront pre-claims commitment on the direct primary care side is twice the size of its pre-claims commitment on the other side. If direct care had no economic advantage, half of the roughly $1,000,000 in clinics fees was simply wasted.]

Simply oblivious?

Neither high cost claims data that might cast light on risk distribution nor the age differential are addressed in current Union County DPC advocacy. Not even in an article, written for the Georgia Public Policy Foundation by Ms. Restrepo, purporting to “tackle the skepticism” over the “myth” of DPC cherry-picking – an article expressly citing the Union County experience for its “compelling numbers”.

Instead of addressing age differences or high cost claimants, Ms. Restrepo painstakingly breaks down Union County’s DPC enrollees by the number and frequency of their chronic conditions. But what does her article say about how traditional plan enrollees’ health status compares on these same measures? Not a word.

Even if DPC enrollees once picked turned out to somewhat sour cherries, they could easily be more palatable than the bitter lemons and high cost claimants that might have been found in the traditional insurance pool had anyone bothered to look.

Stop the rush to direct primary care.

Let’s not bet the health care of county enrollees, or anyone else, on the idea that little Union County won big savings by offering direct primary care. A far safer bet is that all Union County’s decisionmakers actually managed to do was segment their enrollee population based on health status, then proclaim an unjustifiable win for an unproven health care concept.

Note: for supporting calculations and other information please see certain Google “Sheets” here and here or use the “Contact” menu item above.

Update: See this post for some cost-adjusted data that confirms signficant selection bias, while still suggesting that direct primary care has net positive effects.