New state law opens door to free market healthcare plans that lower costs and improve quality

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The path to providing Michigan citizens with access to higher quality, lower cost healthcare has been cleared following Governor Rick Snyder’s signature into law of Senator Colbeck’s SB 1033 (Public Act 522 of 2014).  This legislation ensures that Direct Primary Care Services (DPCS) are not treated as insurance products by regulators. The Direct Primary Care model enabled by Senator Colbeck’s legislation has been referred to by David Chase of as “Two parts Marcus Welby and one part Steve Jobs.”

The new law assures physicians who adopt a Direct Primary Care Service business model that the administrative burden associated with insurance regulations will not interfere with their treatment of patients.  Physicians who offer Direct Primary Care Services provide specified services for a monthly subscription fee that usually vary between $50-$125/month. Typically, these services include routine medical care such as office visits and basic tests and procedures.  Consumers would also purchase a high-deductible health plan at reduced rates to cover those services not provided through their DPCS plan.

DPCS redirects the focus of healthcare away from government mandates, regulations and fee schedules back to the simplicity of the doctor-patient relationship. The enactment of this law comes on the heels of the release of a compelling study of the impacts of DPCS by Seattle-based Qliance Medical Management, LLC. In this study, Qliance reports that the adoption of DPCS as a component of employer-sponsored health plans resulted in a 20% reduction in healthcare costs, increased patient satisfaction, and better care.

“Through the tireless efforts of Senator Colbeck, the citizens of Michigan will have greater access to high quality, low cost healthcare as individual physicians, finally free of the insurance and hospital system bureaucratic monopolies can innovate and deliver high-value healthcare,” said Tom Valenti, Founder and Partner of Forthright Health.

“Kudos to Senator Pat Colbeck and Governor Rick Snyder for making SB 1033 law. This law enables Direct Primary Care here in our state. This innovative healthcare delivery model will help solve Michigander’s healthcare costs and access challenges,” said Matt McCord, M.D. with Docs4PatientCare.

The legislation is the centerpiece of Senator Colbeck’s “Exploit then Repeal” strategy regarding the Affordable Care Act (aka Obamacare). This strategy seeks to identify sections of existing law that can be exploited to promote free market healthcare solutions such as his Patient-Centered Care Solution. The adoption of this solution would effectively nullify the need for the 159 new federal organizations erected between a doctor and patient under Obamacare.

“As we pursue healthcare reforms, we need to protect the doctor-patient relationship. I do not want our citizens to be subject to the same anxieties around coverage or continuity of care that accompanied the rollout of Obamacare as we pursue its repeal. Patients enrolled in DPCS agreements at the time of the repeal of Obamacare will have no such anxieties,” said Senator Colbeck.

The passage of this legislation is simply the start of what Avik Roy of the Manhattan Institute refers to as a “free market revolution in healthcare” regarding Senator Colbeck’s vision for a healthcare system that truly does lower costs, increase access to care and improve the quality of care for ALL citizens.

“With this law Senator Colbeck has created the opportunity for primary care physicians to provide real value to health care consumers. When employers and patients recognize the quality of care and cost savings these practices provide demand for Direct Primary Care will expand exponentially. However, the work has just begun. To fully realize the models potential doctors must build these practices and work with employers, insurance companies and the government to ensure its success,” noted John Blanchard, M.D. CEO of Premier Private Physicians Michigan.

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