Affordable Care
If you’re taking your partner out to the most expensive place in town for date night… I would guess you would have to take them to the hospital.
Just like everything else, the charges of healthcare and the cost of health insurance have risen tremendously over the last 10 years. In 2010, the average annual premium for family coverage was $5,000. Today, that number is $13,000. Deductibles have taken a similar upward trend from $3,000 to $8,000 over the same timespan. Check out this graph:
For starters though, let’s get basic definitions out for anyone reading who might not understand. Just skip this if you know these insurance terms!
1) A “Premium” is how much a person will pay monthly despite how much healthcare they use.
2) A “Deductible” is usually how much a person has to spend until their insurance covers 100% of their healthcare.
3) A “Co-pay” is how much a person has to pay each time they see a doctor.
Now, there are four main ways DPC can save members money. The first is by choosing an insurance plan which pairs well with DPC membership and the second is by saving patients money on ancillary services (medication, labs, and imaging), the third is saving money by preventing hospitalizations and Emergency Department visits, and the fourth is saving money by saving time— and time is money!
Health insurance is meant to prevent bankruptcy due to medical conditions. The Direct Primary Care community, including myself, encourages everyone to have insurance for that reason. Insurance is needed for the “big stuff" - hospital admissions, surgeries, and emergency room visits. But primary care is actually not that expensive; health insurance is what makes it expensive. SAY WHAAAA?! Think about this: If your car insurance had to include the cost of every oil change, filter change, wiper replacement, wiper fluid refill, tire rotation, and all of the other typical maintenance which is generally not expensive, your car insurance would need to be ABSURDLY more expensive to include these services. This is the same reason why home insurance policies do not cover light bulb and air filters. This also causes the phenomena I like to call “The Three Charges of Healthcare.”
1) The first charge is what the system charges insurance companies (which is made up and varies greatly depending on how much systems think insurances will pay).
2) The second is how much the insurance bills their client (you).
3) The third is how much the service ACTUALLY was.
For example, a hospital system will charge an insurance company $3,000 for an MRI. The insurance company may pay $2,000 to the hospital and then bill the client (you) $1,000 to cover the rest. The actual cost of the MRI was $400.
So, why on earth does health insurance cover primary care? Beats me! I am sure it’s in the history books somewhere but my goal here is only to explain how DPC can save you money. The language used to advertise plans is worded in certain ways to nudge clients to choose the most expensive plan. Most plans are called a “high-deductible” or “low-deductible” health insurance plan and… well, of course someone would prefer a “low-deductible” plan. But most often this is not the best plan, just the most expensive. If we started calling them “high-premium” and “low-premium” plans, I think more people would instinctively choose the “low-premium” plan.
This is where it can get confusing so check out this graph first. Ahhh, visual learning!
Red = Deductible; Blue = Premium
On the left is a high-premium (low-deductible-$9,000) plan and on the right is a low-premium (high-deductible - $14,000) plan from REAL quotes I got from the top health insurance company in my area. This plan is for a young, healthy, married couple with no dependents making $90,000/year. In this example, this person had the worst year of their life. They ended up with multiple hospitalizations, had a major surgery, and needed to go to the Emergency Room multiple times - so, they met their deductible (yay?). In this worst year of their life, a high-premium plan would have only saved them $754. On the contrary in the best year of their life, if they did not go to a doctor for anything other than, let’s say an annual exam, they would have only paid their premium and the low-premium plan would have saved them over $4,000 that year. That would more than cover the approximate $2,000/year DPC membership for this couple and would come with more personal, more convenient care and save them money on ancillary services (more to come). Regardless of income, marital status, or dependents the basics of this example hold true. By choosing the high-premium (low-deductible) plan, a person is basically betting on having the worst health year of their life as that is the only way it would save them money. And, we learned from the last blog - health coverage does not mean health access. If you have the most expensive/”best” health insurance there is, but cannot see your doctor, what’s the point? Also remember, if you get health insurance through your employer, YOU are still paying for it! Medicare/Medicaid is quite a different animal and I would recommend either emailing me directly or focusing on the access and convenience piece of Caravel Health DPC!
More and more people are figuring this out! This chart shows the trend that Americans, particularly ones with higher education, are electing for “high-deductible,” low premium health insurance plans. Nearly 46% of those with higher education elect for a “high-deductible” plan compared to only 39% of those without a high school education.
You can see more individuals are investing in Health Savings Accounts (HSA) too, which can also help save patients money. You may also be able to use you HSA to pay for your DPC membership. But, I am not an accountant (far from it) so I would encourage people to look more into this themselves or reach out to an accountant.
The second way Caravel Health DPC saves money is through ancillary services (medications, labs, and imaging). Our prices on these services are 80-90% less than system prices. Reference the above “The Three Charges of Healthcare,” Caravel Health DPC basically only charges our patients the third price… the actual cost of the service - We would charge $400 for that MRI.
Look at this comparison of medications, labs, and services:
These are averages or prices taken directly from a 2021 cost sheet from a local hospital system.
The third and a fourth ways that Caravel Health DPC saves money isn’t something you see but definitely something you’ll feel!
The third way is by preventing hospital admission and emergency room visits. Patients with personal relationships and direct access to their doctor do not go to the emergency room as often and also get better, more personalized care therefore preventing hospital admissions.
The fourth, and often more important than just saving money, is saving time. This is both in a business and personal sense. We can all make more money, but we cannot make more time. Caravel Health DPC saves patients time they could spend with their family or time they could be at work making money. These opportunity cost savings are immeasurable.
There you have it, DPC can save you money— and typically does. Regardless, the REAL value of DPC is restoring the doctor-patient relationship. It is allowing you to have access to the healthcare you pay for! It is the ability to have a doctor who you can text and call directly with questions or for advice, who is available for you with same day or next day visits, who knows you as more than a disease, who spends 30 or 60 minutes with you as opposed to 5 minutes, and who is passionate and invested in your health! You can have all that… and pay LESS for healthcare. Amazing.
Best in health,
Dr. Landen B Green, DO
