News Story

Michigan Medicaid Patient Can't Find Care, So She Pays For Innovative Alternative

Direct Primary Care: 'You pay a flat fee ... and it's amazing'

When Michigan expanded Medicaid in 2013, one person who was relieved was cancer survivor and self-employed child care provider, Dani Valassis.

“I wasn’t making enough money to afford good, quality care,” said Valassis, who was seeking new health insurance after a divorce. When she learned she qualified for “Healthy Michigan,” this state's version of the Medicaid expansion component of the Affordable Care Act, she thought her coverage woes were over until she sought routine care.


Of the doctors included under a state Medicaid managed care contract in Livingston County, where she lived, several were not accepting new patients and the ones who did were overwhelmed. It was not unusual to sit in a waiting room for over an hour to see a doctor for a few minutes, which was hardly enough time for a doctor to learn her complicated medical history

“It was just frustrating. I felt like I was cattle,” said Valassis.

At one point, when she couldn’t get in to see a doctor, she sought emergency care. She was diagnosed with strep throat, something that could have been treated more cheaply and faster in a doctor’s office.

The stress was compromising her health. Out of desperation, she went back to her primary care doctor under private health insurance and asked if he could treat her. To her dismay, she learned he wasn’t accepting any insurance, let alone Medicaid.

She thought there was no way she could afford the visits until she learned her physician, Dr. Chad Savage, was using a new billing model known as direct primary care.

“You pay a flat fee. You can see him as often as you want, and we can communicate on the internet and it’s amazing,” said Valassis.

Valassis pays $49 a month. Younger patients pay even less. Savage can offer care for that price because he no longer spends time and money processing insurance claims.

He added that when he left the insurance-based system, his costs dropped by more than half.

In addition to having access to unlimited primary care for acute and chronic health problems, Savage’s patients get deep discounts on imaging, basic prescriptions and medical supplies, which Savage purchases directly to avoid the middleman charges.

By not having to process claims, Savage can spend more time with his patients.

Patients come in sooner because they don’t fear a bill for an unnecessary visit. Savage can also manage patients over the phone or the internet.

“This is not something that easily be done in the insurance-based system because it can’t figure out how to bill and code it,” said Savage.

Because of its promise to both doctors and patients, direct primary care has captured the attention of lawmakers, not just for Medicaid, which costs taxpayers billions, but for government workers.

“If we can find a way to go off and provide better care for less money, that’s where you start,” said Sen. Patrick Colbeck, R-Canton.

Colbeck wants Michigan to conduct a pilot program using direct primary care with a small group of Medicaid patients. He believes not only could it be instructive for state government but for anyone who pays for health insurance. Michigan’s private sector spends over $35 million a year on health care, according to the Kaiser Family Foundation. Initial studies of direct primary care show that it can reduce health care costs by at least 18 percent.

“If you freed up about $6 billion for employers in the state of Michigan,” Colbeck said, “that can go to higher paying jobs, that can go to more jobs,” he added. It could also, he said, make the state more competitive. “Businesses will flock to Michigan,” he said, and people will come from Canada for medical tourism.

For several years, Washington state has offered a direct primary care program to Medicaid beneficiaries in Seattle and some other areas. The Florida Legislature is currently exploring a pilot program within Medicaid, and New Jersey is trying out direct primary care for state employees.

In a flat-fee based model, both patient and doctor have an incentive to keep costs down. Patients want to avoid having to use high-deductible, catastrophic insurance they would have to carry and doctors won’t want to lose members if they discover the arrangement does not keep them out of the hospital.

Savage is traveling the state with Colbeck to encourage primary doctors to form direct primary care practices. He says it has renewed his passion for caring for others.

“Most people don’t go to medical school so they can fill out forms all day. With direct primary care, we get to take care of people again,” said Savage.

While paying for additional care has been a challenge for someone on Medicaid like Valassis, she thinks the cost is worth it.

“I just don’t get coffees. I don’t go out to dinner. I save this $49 for my doctor because it is just peace of mind and it’s good quality care,” said Valassis.

She says Savage encourages her to come in often.

“He likes to see me once a month, just to make sure things are working well and as it turns out every time I see him, there might be something more, I might need a test but he is very thorough. (It’s) comforting to know that he is there. ... It’s perfect for me. It would help a lot of people,” said Valassis.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.