VOLUME OR VALUE? how does your doctor get paid?

An excerpt from Medical Answers Now!: How Direct Primary Care Guarantees Fast Access to Your Doctor.

Insurance-Driven & Value-Based Models

Healthcare costs are out of control and volume-based insurance reimbursement models are felt to be contributing to the problem. Medicare and most major private medical insurance carriers have begun testing and transitioning to reimbursement models that pay for healthcare services based on the quality of care instead of the quantity of services provided. These quality-based or value-based reimbursement models reward healthcare providers for providing the best care possible as efficiently as possible. They also have the effect of shifting some amount of financial risk from the insurance carrier to the healthcare provider.

Physicians, hospitals, and other providers must assume the risk that they will be able to improve the level of care and health outcomes while simultaneously cutting the costs to deliver care. With the aforementioned pressures on primary care practices, assuming risk of reimbursement for services performed is not an easy sell for smaller physician-owned practices but is being adopted by larger primary care practices and many that are owned by hospitals.


Value Proposition

The affordable and high-level access to a personal physician that is promised by the DPC value-based care model is made possible largely due to the elimination of the insurance middleman. The cost to deliver primary care drops significantly when this non-value-added intermediary is removed. The physician and medical practice are able to eliminate all of the time and expenses associated with filing and refiling insurance claims, negotiating disputed claims, balance billing patients, adjusting off unpaid charges, and satisfying the insurance carriers’ complex requirements for documentation and coding in order to be reimbursed.

The immediate result of this simplification is that DPC physicians are able to reduce the number of patients they care for dramatically compared with the patient panel that almost every insurance-participating (volume-based) physician carries, freeing up a significant amount of time to be available to their patient members. This allows them to be highly accessible to their patients by phone, text, or same-day appointment. Under the DPC model, physicians work directly for their patients rather than their patients’ insurance companies and are directly accountable to patients for all decisions and costs related to their medical care. This simplified direct-to-consumer model eliminates the enormous administrative load that is inherent in any reimbursement arrangement being adjudicated by a third-party payer. Even with new value-based payment contracts offered by insurance companies and Medicare/Medicaid, the cumulative costs for the organizations involved to calculate and determine payment to providers is substantial. DPC eliminates these expenses. If a patient determines that the value of having enhanced access, availability, and time with their personal primary care doctor is worth the monthly membership fee, they stay with the DPC practice. If not, they don’t. The accountability is immediate, and the value is in the eye of the customer—who is also the payer!