New medical plan
to be launched

It's not insurance, but
a local company contracting
for discounted service

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By Lyn Danninger
ldanninger@starbulletin.com

Rising health care costs and what businesses can do about them are major points of discussion on nearly all the health care-related bills introduced at this legislative session.

Existing legislation, specifically Hawaii's Pre-Paid Health Care Act, passed in 1974, limits what can changes can be made to employer sponsored insurance plans. And legislative changes would take time to implement.

But long-time local business executive Don Dawson, of Dawson International, believes he has a partial solution.

Dawson has created an alternative that would allow residents who do not now have a medical plan to have access to doctors at reduced rates.

The medical plan -- which is not a health insurance policy -- is called DirectCare. It would provide enrolled members annual free health check-ups, and a number of other medical services. The plan becomes available March 1 at $20 a month for a single person and $35 for a family.

Members would be able to obtain a 25 percent discount or more on participating doctors' services, laboratory and other health services if they pay by cash or use a credit card at the time of the visit, Dawson said. He is in the process of recruiting participating physicians.

But other plans based on the same concept have met with mixed results in Hawaii. Consumers often confused the plans with insurance, resulting in complaints to the state Office of Consumer Protection.

Dawson said that won't be the case for his DirectCare, given its local roots.

Dawson said DirectCare will provide at least a partial solution for those who are unable to obtain health insurance coverage.

"The health care industry in Hawaii is in turmoil. Physicians are spending too much money and time on processing claims and accounts receivable and fighting ever-decreasing reimbursements," he said. "There has been a strong indication of support for this plan so far from physicians."

Dawson said he has spent the past two years talking to physicians and other health care providers about the merits of the plan. He anticipates that it could open the door for other economies in the health care industry including the reduction of ever-rising premiums.

Dawson has testified at a number of health-care related legislative hearings and was part of a task force set up by the Legislature last year to address health care costs.

Dawson believes that if it can be demonstrated that such a plan helps to solve the growing problem of the rising number of uninsured, the state may be more amenable to looking at other innovative solutions to address health care costs in the future.

He would eventually like to promote tax-free Medical Savings Accounts in conjunction with the discounted services, which would allow consumers to set aside funds they can designate for the purchase of various medical services. Unused funds are then carried forward tax-free at the end of every year, he said.

Dawson noted that yesterday President Bush endorsed a plan currently before the Congress that would extend Medical Savings Accounts on a permanent basis and further broaden coverage available to small businesses and individuals.