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February 2015:

A New Direction in Primary Care

By Mark R. Smith, Editor-in-Chief

February 3, 2015

Posted in: News

The city of Seattle is notable for a few trends, with Grunge rock, coffee and rain perhaps the most prominent among them. Today, however, it’s also seen in some circles as an early stage for a health care movement that is gaining traction elsewhere in the United States.

Dr. Florin Selaru is hoping that Central Maryland will be another locale where what is known as a Patient-Centered Medical Home — or Direct Primary Care (DPC) — represents a new wave, as he and his wife, Dr. Juliana Selaru, recently opened Clarii Health in Columbia Gateway Office Park.

To hear Florin Selaru describe DPC, adopting the new model after working under traditional Primary Care sounds like an obvious move, especially when the topic of cost to the patient arises.

“The Direct Primary Care model will decrease the patient’s health care costs by about 20%,” he said. “Preventative medicine is part of the approach, but the overall cost is transparent and essentially fixed, because we charge a flat fee. While concierge medicine can run the patient $3,000–$7,000 per year, Direct Primary Care costs approximately $75 per month.”

The idea behind investing more than $800,000 to founding Clarii Health, Selaru said, is to get business owners to pay the flat fee on behalf of their employees. “This is a big item for business owners, who can capitalize on our model and save money.”

How It Works

The idea behind DPC, said Selaru, is to align the interests of patients, business owners and physicians, with a heightened emphasis on the patients to help keep them out of the emergency rooms and hospitals.

He offers the example of the typical Primary Care practice, “which has 2,500 or so” patients. “The typical appointment is 15 minutes in length, because the doctors are paid based on how many patients they can see under the fee-for-service model, as well as how many tests, like MRIs and X-rays, they order. But the tests don’t necessarily accomplish anything.

“However,” Selaru said, “under Direct Primary Care, we cap our practices at 1,000 patients, so the doctors have more time to treat and talk with patients. And we doctors want that. That means higher quality care.”

The second advantage of DPC is that the doctors don’t have to obtain billing information from the patients, which also contributes to heightening the amount of time a doctor can spend with them.

“Today, the typical doctor can spend a significant amount of time filling out paperwork. With a flat fee, however, that problem goes away. There is no paperwork, aside from the patient’s chart,” said Selaru.

If anyone is waiting for a catch, there is also a small office charge to each patient when s/he shows up for an appointment, in addition to the flat fee each month; but any consternation that may cause usually goes away when patients realize that, under DPC, doctors also serve patients over the phone, through videoconferencing and via e-mail, even at night.

Who’s On Board?

So, if DPC is so great, why are relatively few doctors offering it?

“I think it’s taken so long to catch on because the public needs to be educated,” said Selaru. “People think that there is no way around paying the high cost of insurance for primary care, but primary care shouldn’t even be included under the title of insurance, because insurance is for health events that are not likely to occur.

“But Primary Care is an essential need and, if it is handled correctly, helps to prevent catastrophic illnesses,” he said. “At the same time, we are healthier. That’s why this model works.”

Dr. Andrew Schutzdank agrees. A medical director with Cambridge, Mass.-based Iora Health, he also thinks more doctors will hop on the DPC bandwagon.

“Health care is the only industry where we care more about the providers than the recipients of care. Whenever there is a health care change, people worry about what the doctors will do first,” said Schutzdank, “but many of them are already on board with this. They want to do great work and do great things within great systems that support them.”

Judging by the amount of money some investors have spent on the concept, he’s right. He said Iora, a venture capital-backed company, just closed Series C at $28 million, and received $14 million in a Series B in 2013 after a Series A investment of $6.25 million in 2011.

While he wouldn’t offer numbers, Schutzdank said the company’s revenues “have grown every year. The first year, we built the model. In the second year, we opened four practices. Now, we’re up to 11 practices in various locations nationwide.”

He acknowledged that, while it’s been a struggle to gain wider acceptance of DPC at this point, there is also “a general recognition” that the industry knows that it could be doing a better job, and “the insurance companies have been interested. We’re working with them.”

ACA: ‘An Insurance Play’

Dr. Erica Bliss is president and CEO of Qliance, a Washington state-based concern that was featured in a recent Time magazine article. The company has been in business for more than seven years and began seeing what she termed “rapid growth” at about the time Iora hung out its first shingle, due to participation from some insurance plans and managed care organizations, as well as employers like Expedia, Comcast and the local Seattle firefighters union.

“When people say, ‘It makes so much sense. Why isn’t everyone doing it?,’ that speaks to insurance quagmire,” said Bliss. “Actually, it’s complex work, in that the primary care doctors have to be ready for anything, at any time. Then we have to figure out diagnostics, so it’s constant detective work.

“What’s not complicated,” she said, “is how it’s delivered and how it’s paid for.”

The progress of Qliance has not gone unnoticed in professional circles, either. “We seem to have turned a corner in the last year or so. Some big-deal organizations are getting behind what we’re doing, like the American Academy of Family Physicians, the Society of the Teachers of Family Medicine and Family Medicine for America’s Health, a group that was founded to reform health care systems. They’re educating members because they see it’s a stable business and it’s better care at a lower cost.”

As for Obamacare, Bliss deemed it “a mixed bag.

“What’s good is that it gets more people covered,” she said, “but its integration into the health care industry will be a process of evolution. It’s hard to care for people who don’t have any insurance, but we still think our model is not only less expensive than Obamacare [the Affordable Care Act, or ACA], but also more practical. The ACA is really an insurance play.”

On that note, Vivian Laxton, spokesperson for the Maryland Insurance Administration (MIA), said the administration declined comment about the “controversial” subject matter of this article. However, she sent a link to a report that expresses the MIA’s views from January 2009 [see the sidebar for an excerpt].

That didn’t surprise Selaru, who thinks the insurance companies and government agencies are contemplating this option. “They’ll eventually see the value of the model and go in the direction of Direct Primary Care,” he said. “Again, in many cases, they’re just learning about it.”

‘This Is the Future’

Today, Selaru’s efforts are on making the DPC approach work in the area, as he looks to expand his new practice in the business community. He’s even offering to set up shop in-house for companies with 1,000 or more employees, and is also negotiating with a insurance broker to offer a bundled product that includes a health insurance policy, plus DPC.

“As far as I know, we run the only practice in Howard County that’s taking this approach,” he said. “We want to implement opening more channels of communication with the patients and treat them on a prompt basis.

“This is the future,” said Selaru. “I think what will happen is that the insurance companies will figure out that this works and will start paying primary care doctors a flat monthly fee.”

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