Primary Care-Only Health Insurance

John Goodman talks about limited benefit insurance:

I have become increasingly intrigued by limited benefit insurance (covering primary care, but not hospitalization), even though it does the opposite of what most health policy wonks think insurance should do.

Pro Medical Plan…charges $52 per month (individuals) and $130 (families). In return, people get “primary-care doctor visits for $10 and cheap basic lab tests at a variety of locations in Miami-Dade and Broward, plus a discount card for such things as specialists, pharmacy and vision.”

What I like is that these products solve two big problems that are not solved, say, by Medicaid or SCHIP: (1) They offer access to primary care other than at public health clinics and emergency rooms and (2) they introduce price competition (and, therefore inevitably quality competition) into the primary care marketplace.

I’m of two minds about this.  As Mr. Goodman points out, many health insurance industry observers note that all types of insurance other than health insurance — automobile, home owner’s, life, disability — address comparatively infrequent or unlikely events — automobile accidents, for example — that can be catastophically expensive but are managable because so tiny a subset of the insured experience them at any given time, if ever.  That’s why we don’t hear about a “car insurance crisis”.  It then follows that health insurance should be reorganized along similar lines: patients should pay out of pocket for sinus infections and blood pressure rechecks, insurance should pay for major surgery and cancer treatment.

The counter-argument is that a lot of major medical problems would be diagnosed and treated sooner and less expensively if patients visited primary care physicians instead of showing up at specialists’ offices and emergency departments with advanced illnesses that now require pricey management.

I suppose it boils down to a question:  Does the cost-effectiveness of primary care offset the costs of overutilization secondary to low-copay third party payor-generated access to primary care?  It’ll be interesting to see what happens here and the answer to the question will probably depend on the primary care docs themselves.  I frequently turn a visit for a head cold that would have gotten better anyway into an opportunity to get a cholesterol check or a chance to address untreated hypertension.

The very fact that insurance companies are offering this kind of coverage suggests that they subscribe to the primary care cost-effectiveness theory.

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