[INTRODUCTION]
Announcer
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[EPISODE]
Christopher Habig
Welcome to Healthcare Americana, your go-to podcast for all things related to direct primary care and the innovative world of healthcare. I'm your host, Christopher Habig, CEO and co-founder of Freedom Healthworks. Each week, we dive into the latest trends, share insightful stories, and explore the innovations that are reshaping healthcare as we know it. Our mission is to inspire, educate, and empower you to take control of your healthcare journey.
Today we're going to dive into a topic that's critical for the future of healthcare. Expanding access to affordable primary care for all, regardless of insurance status. This is a vital issue for both healthcare and economic development, especially in smaller rural communities. Today we're going to be talking about state level legislative initiatives that we believe can help proliferate across the United States to return power back to doctors and patients and, oh by the way, drive healthcare costs down and drive access to care up.
Our first topic is looking at the importance of accessible primary care. It's no secret, highly accessible and affordable care, mostly in primary care, which is the gatekeeper to the rest of our healthcare world, it's the key to reducing healthcare costs. Independent local doctors are really particularly effective at delivering this kind of care because they operate free from the pressures of hospitals or insurance companies or really an administrative burden. They're free to be a physician, to have that creative mindset that they're applying all their education, all their experience, and trying to problem solve, not just reading from a formulary or trying to drive performance metrics, quality metrics, so they call it in the hospital world.
But unfortunately, recent trends like…I don't know, ACA driven mergers, private equity buy-ups, and hospital consolidations make it increasingly difficult for these type of doctors to practice independently, which is where the innovation happens. Not in some hospital ivory tower, but in the independent interaction between one doctor and one patient.
Now everybody says, all right, is this something that we can just legislate? Everybody looks at the federal government and the federal government is beyond repair or beyond help at this point in time. I like to joke that one party has no ideas and the other party has bad ideas. I'll let you all just fill in the blanks from that standpoint. But I did want to call out the legislative efforts in my home state of Indiana. We've been a part of a lot of these conversations and I think it really is a leader out there in the healthcare world as far as state level initiatives to help drive the ball forward and put the ball down the field, maybe even put some points up on the board.
So Indiana, again my home state, we've long recognized the value of local healthcare and the legislative efforts are aimed at encouraging the proliferation of independent doctors. Here's a little history of how our state has been able to do this.
Rewinding to 2017, Senate Act 303, piece of legislation shielded direct primary care practices from insurance regulation, saying these are not nor will they be regulated by insurance. This allowed doctors to practice medicine without the obvious heavy administrative burden of insurance paperwork.
This freedom lets doctors spend more time with patients leading to better care and stronger doctor patient relationships. Indiana was not the first state to pass DPC specific legislation, but with our help was one of those first states that said we're not going to narrowly define direct primary care. We're going to open up our aperture and just say DPC is not this other stuff over here that looks and quacks and squeaks and walks more like insurance regulated environments and practice care models. That was back in 2017.
Fast forward three years, 2020, the House enrolled 1004, which ended the abuse of non-compete clauses, which means doctors are now able to freely move to practice where they most needed without legally bound to a single employer. This, in theory, would increase the number of independent practices, especially in rural underserved areas benefiting patients who needed the local consistent care because for the first time in human history, people are able to now move where they want to work and then find, well, let me rephrase that. People are able to move to areas where they want to live and then find work thanks to this great little thing called the internet.
Now the 2020 legislation didn't really go far enough. It just established that hospitals can't put abusive non-compete wording into contracts. It didn't really define anything. So it didn't have a lot of teeth, which it's a step in the right direction, but it set the stage for much more effective legislation later on.
Fast forward another three years, 2023, we got Senate Enrolled Act #7, which took that non-compete and pushed it over the goal line. This legislation abolished new non-compete clauses for primary care doctors for employed primary care doctors - that's a big distinction there - for future contracts, though existing ones remain in effect. So it didn't just say, hey, all these non-compete clauses are null and void. It just said once doctors sign new employment agreements, you can't put a non-compete clause in there. It was only limited to primary care physicians, which for listeners of this audience or for listeners of this show know are pediatrics, family medicine, or general practice and internal medicine. So those three specialties fall underneath what the state defined as primary care.
So moving forward, as of July 2023, the state of Indiana, you cannot put a non-compete clause in your employment contract. We're still waiting as of this day for that to continue burning out. We're coming up on the one-year anniversary of this legislation. And beyond that, there's already been a couple of hospital systems that have said, we're going to just do away with all of our non-compete. We're not going to enforce them any more effective late 2023.
Also, last year in 2023, the House enrolled a great piece of legislation encouraging independent practices. This actually created tax incentives for new practice startups and helped reduce the financial burden on doctors who wanted to start their own practices through a $20,000 tax credit for new physician business owners. Again, emphasis here is to encourage doctors to take up more of a free market medical model, return back to independent practice.
So that's what's happened in the past in Indiana. Here's what I think we can do in the future to help continue help physicians continue to move the ball down the field, make progress into getting back into independent practice.
The first proposal is what we call a revolving fund proposal. This one is really, really exciting. And I believe it's on the table, you know, from our mindset to help physicians establish practice and have a loan vehicle to be able to do it that is using low-cost state dollars. Now, this would establish a revolving fund to help finance, again, the proliferation of independent physician practices throughout Indiana. And this will provide the necessary capital for doctors to start their own practices, addressing one of the primary barriers to independent practice.
Now from Freedom Healthworks side, I'm happy to announce that yes, we have put a lending vehicle into place for any physician looking to get into the DPC world who's running into trouble from traditional bank lenders that have no idea how this model even works. They can't wrap their head around the fact that you don't take insurance. So how can I loan you money from a business startup standpoint?
Freedom Healthworks, again, we've been able to do that. And we're working with physicians across the country to be able to put that loan program into place for them. But being able to use state dollars treated as a really low cost of capital to help out communities in need of medical assistance and in need of trusted healthcare would just be the icing on the cake. So here's how it works.
We get a revolving fund to provide the low interest loans to doctors looking to start their independent DPC practices. Maybe you earn a competitive rate of interest for the state. So the state is actually investing in these practices, creates an evergreen source of financing, ongoing expansion of healthcare access. The reason why I like this one, you know, Indiana's had a great Indiana Economic Development Corporation and a lot of other states have this very forward thinking, trying to be a great environment for business startup, but we seem to neglect the healthcare services side of it. They're more interested in investing in brick-and-mortar factories and high-tech data warehouses. What we say is, guys, let's invest in our local communities here using the dollars that will actually generate a return and generate well-being across the state.
For physicians, the biggest barrier to starting an independent practice right now is the lack of capital. Like I just mentioned, traditional banking options just don't understand how these practices work and they don't understand this business model. So they don't loan or what's even worse, they provide loans that is way too much money. It's way too big of a drag to service the debt on practices. And these banks want it to be financed with expensive capital, which forces practices to buy things that they probably don't need. You don't need hundreds of thousands of dollars worth of equipment to run a DPC practice, you just don't. It's the leanest business model in healthcare. And so when a bank in the historical lending sense ties its loan to collateral that is going to bankrupt your business by providing oppressive overhead - that doesn't really help anybody out.
A fund of this sort from even public-private sources, obviously that helps provide the financial support needed to overcome that hurdle, enabling more doctors to pursue independent DPC practice and deliver high quality, patient-centered care that actually drives down the cost of care and increases the access to a physician.
For patients, obviously pretty self-explanatory, I think from my standpoint. Patients benefit from increased access to local primary care providers, reduced travel times to seek medical attention, and they improve the continuity of care. Those are big, big highlighted items that I just don't want to gloss over.
We can put DPC physicians in all reaches of counties, not just consolidated in one hospital, and patients can stay with the same doctor so they're not traded back and forth and they're a victim of Scribner's errors or scribes or losing medical records or doctors not talking to one another because they're seeing too many darn patients. This is crucial in all areas of any state to have that continuity of care and have that relationship.
Now, how would a state, Indiana for instance, or any other state actually administer this type of a program? This is where the fun start happens. This is where the fun stuff happens. Excuse me, I should say.
I get excited when I talk about this stuff, finding solutions for doctors all over the country here, not just in our state, but with our revolving fund, as I mentioned, Freedom Healthworks, we're just unleashing a new lending program out there for DPC physicians. We know what a good borrower looks like, what a strong business plan looks like in the DPC world. So this revolving fund could be administered by, I mentioned the Indiana Economic Development Corporation, any State Economic Development Corporation from assistance with industry experts like Freedom Healthworks and even other aligned nonprofit partners.
There's independent physician groups out there. There are state medical associations. You name it. If you needed a stamp of approval from a nonprofit physician entity, great. I'm sure that they would be happy to help out for their members and for really anybody else in the state who comes along and says, I want help with this startup program. Let's do it. I'm a firm believer that markets solve a lot more than just charity does. And so having the public-private partnership there will allow us to hit a lot more prospects and vet them and get them into business as quickly as possible in order to take care of patients.
Now this approach would ensure sound oversight and reduce execution risk as physicians are itching to follow proven models and they're far more likely to achieve rapid success. So here I am for anybody listening to this involved in the state government raising my hand saying, hey, come work with Freedom Healthworks. We've talked to a lot of great DPC physicians out there who are in desperate need of financing to help get their practices off the ground to take care of people in their local communities. It is a huge, huge need out there that states could really take lead on.
The second big initiative, and I know some of this comes with federal hooks and claws in it, but I believe there's a huge ability, there's a huge, huge opportunity, is a better word to say that, to reform how states administer their Medicaid plans. Now, before you just hit the pause button or cancel this episode, bear with me.
I'm a firm believer that expanding access to care for Medicaid patients is very difficult for the administrations, for the state level programs, and it's hard as hell for patients to actually find doctors who have the time to see them or the availability. There's what's called the “Scarlet M” if anybody's heard that one, that once you're marked as a Medicaid recipient, your options dwindle. And they don't just dwindle a little bit, they dwindle a lot in who you can go see and who accepts your plans.
Historically, that's because people point fingers at the state and saying, hey, you're not paying our doctors enough for the reimbursements to encourage them to go see people. What I believe is that while Medicaid patients are in dire need of care, there are, yes, better paying people out there on commercial plans, but why are we limiting ourselves to that?
I believe the DPC is a huge, huge opportunity for state level initiatives to see Medicaid patients. The big, big caveat to that is that the state or other programs cannot get in the way of the doctor-patient relationship. Multiple states over the past 10 to 20 years have tried to work with DPC to see Medicaid patients and they've all failed because they insist on paying the physician directly in not trusting the Medicaid recipient or the patient in this case to go seek quality care and then be able to pay for themselves.
Now think about that. If I'm a Medicaid patient, and they say, hey, go pay this, go see this doctor over here and we'll take care of that for you. I know that's how they're used to working a lot of different areas. But if I'm the doctor, I'm going to say no. The reason why I got into DPC is so that I don't have somebody else sitting in between that relationship of my patient and myself, especially in the financial relationship.
So there's the real rub, right? DPC is ideal for Medicaid patients because it eliminates administrative burdens of plain adjudication, claims administering, all that kind of stuff that just drives up cost and drives up waste.
If we said we're going to operate a state-level Medicaid program that operates similar to an EBT card or electronic benefits transfer card, food stamps, both these cards can go to paying, just like a debit card would, a DPC membership, and then the state level, they can provide money on that card, I think that's a step in the right direction. Now, of course, anybody listening is free to disagree or say, hey Chris, you're nuts on this one.
And they're free to say that. You're free to say that about any idea or any episode that comes across here. But allowing Medicaid patients to be healthcare consumers has a number of benefits. You're putting skin in the game. They're making the right decision. And they're not going to be discriminated against from a plan standpoint. Again, we've all known that that's the beauty of direct primary care is that we don't discriminate against anybody's insurance plan. We don't care if you are uninsured. We don't care if you're care if you have health shares, we don't care if your employer has your insurance benefits, we don't care if it's a government program on a state level, Medicaid, or on a federal level, Medicare. All we want to do is make sure that we get you as healthy as possible, we keep you healthy, and that we're paid for the value that we bring to the table. That's what DPC is all about right there in a nutshell. So if the state enables Medicaid recipients to work just like any other patient or healthcare consumer out there, this would be a great deal for all parties.
The third initiative that we're really pushing for this year is to protect patients from referral discrimination. Now, what in the world do I mean by referral discrimination? We also call this freedom to refer. And this legislation aims to protect patients of independent physician practices from referral discrimination.
So, like I said, imagine a scenario where you're a DPC patient, or your DPC physician, and you're trying to refer your patient to a specialist or to imaging just for that imaging to call you up and say, hey, this got rejected. We can't help this person because their insurance plan rejected the referral because you're an out of network physician.
That's not fair to anybody involved there. The patient is seeking care from a trusted physician. The physician is trying to get that patient the highest quality, maybe the most cost-advantages follow-ups and specialist visits, imaging visits, that they can, yet even if that imaging center is in network with the insurance company, the insurance company is saying, no, we won't cover that visit or we'll deny that work because the referring primary care physician was out of network.
When I first heard this, it absolutely blew my mind. Then I started digging a little bit and it turns out that this is happening all over the United States right now. We've got good friends in Maine who've actually helped pass legislation that says insurance companies cannot deny procedures or claims for patients that they cover. So what does that mean in the grand scheme of things? Our goal is to prohibit insurers from denying coverage for eligible care simply because the referring physician is an independent provider.
Like I mentioned, similar legislation in other states has been very, very successful, making sure that there's enforcement of this. There's got to be teeth and penalties when this happens. So we can build on these precedents and ensure fair treatment for all patients. For doctors, obviously an independent physician in the DPC world needs help. We can't do all things for all patients inside the four walls. So when doctors refer out to specialists, they need to be able to do so without worrying that that referral is going to burden their patient even more through some type of coverage issue or some type of insurance hiccup. For patients, I think it's pretty self-explanatory too. Patients receive the necessary specialist care without worrying about coverage denials based on their primary care doctor's network status. Seems to be a no-brainer, but yet these are the little games that insurance companies like to play when physicians start to opt out of their networks.
Now there's a couple other ideas I wanted to go through just to put them under radar. This'll be quick. I promise you, because those are the first. Those are the initial three big initiative, big, big legislative asks for us this year, not just in Indiana, but really everywhere else. So number one was that revolving fund to help independent physicians start their practices. The second one was seeing if we can expand access for Medicaid patients to work more in a EBT manner where they're able to join a practice all in their own free will and volition and the physician in practice sees no difference in that patient versus anybody else who walks through the door and pays with a credit card. And then the third initiative is the ability to protect patients from referral discrimination.
Now just some quick hitting ones that I think they're worth mentioning here and some other goals and initiatives. How about we expand association health plans? I know again, that's a little bit more of a federal type of ask versus a state ask, but states aren't doing this around association health plans. Let's see if we can continue to expand those. What if we had programs that state employees were directed towards independent physician practices of all specialties? I think that would make a big dent in the competitive landscape and the increasing competition where our state government says, great, you want to be an employee?
Let’s see if we can send you to independent physician practices across the state, no matter where you are, rather than relying on big hospital networks. And then lastly, let's help people seek mental health treatment at primary care levels rather than just burdening our specialists who have month-long wait lists. Mental health is a huge topic these days in the United States. So let's really allow physicians to practice top-of-license and see patients and spend quality time with their patients to get to know them, just in case any crisis arises, that particular person will be able to reach out to somebody who knows them knows their patient history and knows their environment. So those are just additional ideas that I'm not going to go into just too much detail with on this episode of Healthcare Americana but wanted to get our top three out there wanted to put some more items on the proverbial wish list, I'll call it. So those are it. So I'd love to hear from anybody out there on, hey, this makes sense, or Chris, you're missing something. Let me know about it. We'll be more than happy to come on and talk about it. But the big point is we've got to expand access to primary care and we've got to protect patient rights for a healthier, more equitable healthcare system. That's what health equity means to me. Helping more people get in front of a trusted physician, and helping physicians practice to the best of their ability without the constraints of an administration or the constraints of this terrible, terrible seven minute visit.
I think legislative efforts, like what I've mentioned, I think they go a long way to establishing this kind of perfect kind of parallel healthcare system where we exist and we're just here for people when they're ready to reach out and join our side of this movement.
With that, I want to thank you for listening and joining me on this episode of Healthcare Americana. I know it's a little bit of a departure from our usual programming, but do want to let you know that we'll be hitting more special topics like this as this season progresses. So let me know what you think. Feel free to reach out, email us, visit us online at HealthcareAmericana.com. Without you, none of this would be possible. So once again, thank you to our listeners. And again, thanks for joining us here on Healthcare Americana. I really do hope that you found today's discussion insightful and thought-provoking. Again, if you enjoyed the show, leave us a rating and review on your favorite podcast platform. Like I said, visit our website for more episodes and the latest updates at HealthcareAmericana.com. Be sure to share this with all your friends and colleagues. I'm Christopher Habig, reminding you to stay informed, stay healthy, and stay empowered. Until next time, take care.
[OUTRO]
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