Batavia Illinois – The 5th Ward

Scope, Scale, and the “Negative Option” Model

The City of Batavia implemented Tap Telehealth for municipal employees on July 1, 2026—exactly two months ago. Following positive internal reviews regarding cost and time savings, Tap formally extended an offer to the Batavia City Council last week (August 25, 2026) to expand the service community-wide.

• The proposal targets all 12,224 utility customers in Batavia, explicitly encompassing both residential and commercial accounts.
• Tap utilizes a “negative option subscription,” meaning every utility customer would be automatically enrolled and billed a $9 monthly fee unless they actively navigate an opt-out process via phone, text, or email.
• To help ease the transition and address resident concerns, utility payers who unenroll during the first 90 days (three months) will receive a full $27 refund credited back to their utility bill.
• At this scale, the program would generate $1,320,192 in annual recurring revenue from the community if no customers opted out. From this $9 fee, $8 goes to Tap, and $1 is remitted to a city escrow account to fund local initiatives.

Company Background and the Developing Telehealth Market

Tap Telehealth, operated by MD Health Pathways, was founded by Dr. Dirk Perritt, a board-certified emergency room physician in North Texas. Observing underinsured families accumulating debilitating hospital bills for minor ailments—such as a $1,500 charge for a pediatric antibiotic—Dr. Perritt began giving his personal cell phone number to patients to provide direct, low-cost prescriptions. This evolved into Tap Telehealth’s current model, which bypasses traditional insurance infrastructure entirely by partnering with municipalities.

The proposal arrives amid explosive growth in the virtual care sector. The global telehealth market transitioned from a pandemic necessity to a permanent healthcare fixture, valued at approximately $156 billion to $186 billion in 2025. It is projected to reach over $1.2 trillion by 2034, growing at an annual rate of roughly 24%. This market is rapidly developing, with an influx of new providers constantly onboarding to meet the surging demand for remote patient monitoring, chronic disease management, and mental health triage.

Market Alternatives

While Tap is unique in tying its service to municipal utility bills, the broader direct-to-consumer virtual care market includes several prominent competitors. Most rely on a hybrid subscription-plus-visit fee model:

• Tap Telehealth: $9/month. Text-based acute care, mental health triage, prescription refills, discounted labs. Covers up to 10 people per household.
• Amazon One Medical: $9/month (with Prime) plus $29+ per visit. 24/7 video and messaging care, chronic condition management, controlled substance prescriptions.
• PlushCare: $14.99–$19.99/month plus $99–$129 per visit. Video appointments, ongoing primary care, therapy, sexual health, lab referrals.
• Sesame Care: Optional ($10.99/month) plus $29–$44+ per visit. Direct-pay marketplace for same-day video/in-person care, mental health, weight loss.
• Ro: $149/month plus meds billed separately. Specialized asynchronous care, weight loss coaching, men’s and women’s health.

Note: While Tap covers the core subscription, they charge $150/month for GLP-1 weight loss prescriptions and $40 for full lab panels. Businesses can also purchase additional blocks of 10 seats for $9 a month.

The Algonquin Precedent: High Satisfaction, Low Utilization

Algonquin, Illinois, was the first municipality in the state to roll out Tap community-wide, securing a discounted introductory rate of $6 per month with no municipal kickback.

• In its first eight months, Algonquin’s program diverted 115 emergency room visits and 231 urgent care visits, retaining nearly $300,000 in community wealth. Active users rate the platform highly, posting a 9.9 out of 10 satisfaction score and returning for care at a rate of 1.88 encounters per patient.
• However, the program experiences remarkably low overall community utilization. Only 307 patients across roughly 230 households utilized the platform in eight months. This translates to a household utilization rate of roughly 21% to 25%. Tap Teleheath did mention utilization rates due increase over time.
• The financial viability of the platform fundamentally relies on the remaining 75% of the town paying for a subscription they do not actively use to subsidize the cost for those who do.

Why Residents Should Care: Positives and Negatives

The proposal introduces structural shifts to how municipal services intersect with personal healthcare, presenting deep contrasts in public benefit and risk.

The Positives (Economic Relief & Accessibility):

• Immediate ROI for Families: A parent dealing with a child’s fever no longer has to burn paid time off or face a $200 urgent care bill; they can text a provider and pick up a prescription in the morning. Because Tap actively searches for manufacturer coupons, the average prescription cost drops to under $12, providing immense relief for families on high-deductible health plans.
• Zero-Friction Access: 98% of encounters happen purely via SMS text without needing a phone or video call. During municipal meetings, Tap directly contrasted this with legacy providers like Teladoc, noting that the friction of downloading apps and resetting passwords heavily suppresses user engagement.
• Out-of-State Coverage: The 10-person limit applies dynamically, meaning families can use the service to care for out-of-state college students or visiting relatives.
• Risk-Free Trial Window: The 90-day refund policy effectively guarantees that early opt-outs do not face a financial penalty for being enrolled by default, lowering the barrier for residents to test the service without long-term commitment.

The Negatives (The “Stealth Tax” & Procedural Friction):

• Lack of Municipal Track Record: Batavia has only piloted the program internally with municipal employees for two months (since July 1, 2026) with the offer to expand community-wide presented to the City Council last week. There’s no long-term operational history, claims data, or local utilization data specific to Batavia’s broader community which makes it hard to justify an immediate, citywide rollout.
• The “Stealth Tax” Perception: Residents are highly sensitive to rising utility costs. Automatically levying a monthly charge on a municipal water bill—especially when the city retains a $1 cut—generates the perception of a deceptive municipal “stealth tax”. Even with 23 planned communication touchpoints from the city, many residents will inevitably miss the notices, only discovering the charge after being billed.
• Cross-Subsidization (Paying for Neighbors): Algonquin’s low utilization rate means that roughly 75% of households are paying for a service they never touch. Healthy residents, individuals without children, and those with premium, full-coverage insurance effectively subsidize the program for the town’s active users.
• Procurement Oversight: Embedding a $1.32 million private medical subscription into public utility infrastructure without competitive bidding or a formal Request for Proposals (RFP) raises significant transparency and governance concerns. Especially with an industry that’s been ramping up over the past three years with new players still entering the market.
• Limited Scope of Care: Tap is not a replacement for traditional medicine; it cannot handle controlled substances, trauma care, or replace established primary care relationships.

Author: Jim Fahrenbach

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