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Direct Primary Care Model

A recently acquainted colleague has worked in various clinical settings as a primary care doctor and is looking to go on her own soon. She mentioned the direct primary care model which she wants to adopt, a term I wasn’t familiar with.

To research this post, I must have visited 50 different websites. There are more websites on DPC than actual docs practicing DPC, so it seems. I wrote the first draft in 2017.

How Direct Primary Care Works

A patient may or may not have health insurance but can still purchase a monthly subscription to a primary care doctor’s services.

Instead of being billed per visit, they have an ongoing monthly subscription service that pays for office visits, point-of-care testing, and most of the lab/imaging and offers major discounts on medications.

The idea is that if the patient has more easy access to the PCP, then they are less likely to fall through the cracks, and by having the billing be more transparent, the patient doesn’t have to worry about unforeseen expenses.

Often, these practices are solo doctors with or without any back office staff. They make themselves available to their patients almost 24/7, though they are rarely contacted outside of business hours.

The monthly subscription can be canceled anytime and is usually billed monthly.

The Customers of DPC

It’s not just patients but also employers who are turning to DPC in order to save on the costs of providing healthcare to their employees.

The average patient who subscribes to DPC has a high deductible health plan. Some have no health insurance whatsoever or might be part of cost-sharing plans.

Employers are all over the idea of DPC and here is why; it costs a lot of money to have an employee be out of work for days at a time and providing employees with affordable health insurance is becoming increasingly expensive.

Employers want to curb costs by offering higher deductible health plans (HDHP) while knowing their employees can afford office visits.

I went online and checked out Amino which allows a patient to enter the condition they need to be treated, find the physicians who can deal with that diagnosis, and then estimate the cost of the office visit and services.

According to Amino, with a high deductible health plan, if I wanted to have a routine primary care visit to have the doctor look at my knee, I would have to pay $240.

Third-Party Consultants

So, how did employers come up with this super complicated idea of providing HDHPs to their employees and combining it with this DPC model?

A large company hires a consulting group that wants to reduce its healthcare overhead. The consultant then hires a health insurance consulting group who suggests that the employer switches to an HDHP but then, to cut on costs for the out-of-pocket expenses for their employees, also pay the monthly dues for each employee to a direct primary care clinic.

So, now the employer can drop the Cadillac plans, switch to HDHP, which are exponentially cheaper and, for a few more dollars a month, provide affordable access for their employees.

Imagine that the normal group health insurance premium was $250 per employee. By switching to an HDHP, it will go down to $130, and an extra $25 for access to a DPC service.

When you save a company with 5,000 employees $100/month, that’s $500k/month or $6 million annually. Consulting companies get to keep a percentage of whatever they save their clients – which is the motivation behind finding such concepts and, of course, pushing the DPC model.

Problems with the Current Primary Care Model

  • Primary care doctors can earn more income by ordering more tests and seeing patients more frequently.
  • The fear of lawsuits pushes PCPs to order more tests and be generally more aggressive with interventions/management.
  • PCPs have less and less time to spend with patients, which makes ordering tests a quicker way to complete the interaction.
  • Patients demand a lot of tests out of fear of the unknown, which can take a long time to dissuade them of.

DPC vs. Concierge Medicine

The difference between direct primary care and concierge medicine is that one is generally more costly than the other.

Both involve the retainer model, paying a monthly or annual fee to the clinician or the clinician’s practice to secure access.

Both will allow much easier and more frequent access to the clinician’s service.

DPC focuses on lowering costs by charging a monthly fee that can be canceled at any time, and most costs are covered by that payment model without using the patient’s insurance.

Concierge services charge an annual retainer and will bill your insurance for each visit and test. It’s geared slightly towards a wealthier client with more money than time.

DPC and Telemedicine

Remember that extra $25 the employer pays per employee for access to the DPC?

That same 3rd party consulting company that used to suggest DPC for employers is now suggesting telemedicine instead.

Rather than the employer paying an extra $25 per employee per month (PEPM), the cost will drop down to $6-10 PEPM.

For this amount, the employee will have unlimited access to telemedicine services, and the employer will save 30-50% on monthly premiums.

Now that telemedicine can replace DPC for an even lower fee, these 3rd party consulting companies will be pushing telemedicine even more. Venture capital will be fed into telemedicine companies that are marketing to employers, and that’s how the money is shuffled around.

As of 2023, 6 years after writing this article, private equity seems to have invested heavily into telemedicine.

Sustainability of DPC

The DPC concept breaks down because patients can cancel their premiums anytime. And the PCP still has less of an incentive to want to bring the patient back for follow-up.

Also, the concept of DCP is based on the premise that patients are unhealthy due to lack of access. Possibly. Or its lifestyle choices due to various environmental factors which drive disease.

Patients will also demand test after test. Sure, the DPC practice will cover a cholesterol test, but will the provider pay for the $3,200 viral culture panel of the nasopharynx that the patient is requesting?

My Virtual DPC Practice

In 2017 I viewed DPC as an unsustainable practice model. Now, in 2023, I’m a patient of a DPC practice and started my Virtual Primary Care practice.

I have a cost-sharing health plan (not health insurance) and aim to build a long-term relationship with my primary care doctor.

I changed my mind about a DPC practice because I have more faith in primary care than ever before. Still, DPC will remain a sliver of healthcare.

The Ideal DPC Model

I see a place for the direct primary care model in healthcare. For the savvy individual, an HDHP and a subscription to a DCP could essentially replace the old “catastrophic” health care plans, which were actually incredibly effective.

The ACA took away these catastrophic plans because of user error. Households that didn’t understand health care well enough purchased such plans exposing them to a high risk of bankruptcy.

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