Thanks for coming back for the latest edition of Planning for your Purpose; Telos Financial’s blog where I discuss different topics related to financial planning. Dennis LaVoy is Ann Arbor’s financial advisor serving clients throughout southeast Michigan as well as across the country.
The primary purpose of the blog is to introduce financial planning concepts and questions I receive from clients that I believe are important. I want to start discussions about that will educate, benefit, and improve your financial life. Ultimately, to help you focus on your telos!
Today, I’m glad to welcome a guest blogger, my friend Dr. Jeff O’Boyle. Dr. Jeff and I co-authored this piece.
Who’s Dr. Jeff?
Dr. Jeff is the owner of Beyond Primary Care, a family medicine and addiction medicine clinic located in Ann Arbor. Dr. Jeff practices a direct primary care (DPC) model of medicine that believes in making healthcare individualized, creating a strong and seamless doctor-patient relationship, and providing affordable and accessible healthcare services. He grew up in the Chicago suburbs, went to school at Midwestern University, Chicago College of Osteopathic Medicine and did his post graduate work at Beaumont Hospital in Wayne, MI.
We’re going to discuss some of the pros and cons of using a DPC model
What could using a DPC relationship mean for my budget?
Health insurance coverage is a very personal decision each family must make for themselves. They should consider their personal beliefs, personal preferences, geographic location, health needs, financial needs, employer benefits, federal benefits, and anything that influences their medical care. Direct primary care is a membership model of health care that works in conjunction with a High Deductible Health Plan (HDHP); more commonly referred to as ‘catastrophic insurance.’ So, if this type of service fits your needs and wants, it can mean a big savings monthly for your family versus a more common insurance arrangement.
How does Direct Primary Care (DPC) work?
For a low monthly fee per individual, a DPC membership will give you access to your personal doctor for all your primary care needs, including virtually unlimited office visits. There are no additional copays, deductibles, or surprise hidden charges. DPC memberships typically include all in-office diagnostics (eg- strep test, flu test) and procedural benefits (eg- stitches, ear wax removal) at no extra cost. All DPC providers also participate in telemedicine; phone calls, emails, texts, & webcam conversations are included in a membership. Additional benefits to DPC include routine 30-60 minute appointments where doctors can address more than one problem and provide in-office medication dispensing at wholesale pricing.
Direct Primary Care is not meant to replace health insurance. All DPC practices recommend their patients have some type of insurance as the proverbial ‘hit by the bus’ does happen, but health insurance is not a requirement for membership. People need a way to pay for the high-cost areas of care, such as surgery and hospitalization. However, certain types of insurance pair well with DPC and can compliment each other to provide families with comprehensive coverage.
DPC memberships tend to include very broad services, it allows individuals and families to purchase less costly insurance coverage options, and realize savings that way. Providing many benefits and high level access to DPC services addresses the main drivers of increasing cost in healthcare.
Are there other applications for DPC?
Aside from considering DPC as an option for your family, it may be a fit for your work place as well.
If you are a small business owner, DPC can provide a solution for your company to give health care to your team, typically at a lower cost than providing insurance. A partial, or fully self-insured model in conjunction with DPC has been show to result in a 30-60% reduction healthcare expenditures for companies.
How would it work?
Hospital systems and insurance-based clinics have higher costs for many medical services and their prices do not reflect the true cost of services even after insurance negotiations. Dr. Jeff illustrates many examples of these cost disparities for his patients including medications, laboratory blood work, procedures, and imaging. As an example, a Z-pak, a common antibiotic, charged through insurance could cost upwards of $23; through Dr. Jeff, it would cost $1.65.
For example, let’s say you are pretty healthy overall and have a high premium/low deductible health insurance policy that you or your employer pay a lot of money towards every month. You believe you are not realizing enough value from your insurance, but still want coverage for those ‘what if’ scenarios. Switching to a HDHP insurance plan combined with a DPC membership still means you have that insurance, but now also has virtually unlimited access to your doctor for a flat monthly fee.
Remember that with DPC, there are no separate office visit fees. By cutting out the middleman (the insurance company) your doctor can focus directly on you, improving your experience, keeping your costs down, and more money in your pocket.
Why wouldn’t I do this?
DPC is not available locally in all communities. If you do not utilize healthcare services on a regular basis or when you do, you are just looking for one-off visits or one-time services, DPC probably is not the right fit.
If your employer provides a ‘comprehensive’ high premium/low deductible policy, DPC may not initially be advantageous. You’ll have to consider how much of the premium your employer covers versus the costs you pay. If you like the idea of a DPC relationship, but don’t feel it is financially wise, consider suggesting it to your human resources leaders and incorporating as an option in your benefits package.
Employers spend a lot of money on health care. If they can save money by providing options, they may be willing to make some changes.
Again, it is something you have to consider personally or on a company wide basis to determine the best fit for your situation.
Combining a DPC membership with a HDHP can save families and individuals thousands of dollars per year where this arrangement is appropriate. Consider your needs and wants, review costs and service needs, and educate yourself about the options. To learn more about Dr. Jeff O’Boyle or Direct Primary Care check out his website at: https://beyondprimarycare.com. If you think DPC is a good fit for your family and you live in the Ann Arbor area or southeast Michigan, call him today at 734-395-2850.
Telos Financial is Michigan’s financial advisor for Generation X, Millennials, Xennials, & young professionals. It is a fee based, holistic financial planning firm located in Plymouth, Michigan serving young professionals and families. Dennis LaVoy, CFP®, CLU® founded Telos to provide financial planning and applies his experience, knowledge, and expertise to help families and individuals in Ann Arbor, Detroit, and across the country achieve their financial objectives.
The views expressed are my own opinions and do not apply to every situation. Your situation may vary so make sure to consult a professional for advice prior to making any decisions.