Could patients ever pay less and get more?
The question seems almost ridiculous in America now, where an ER visit can cost thousands of dollars, but a growing group of primary care physicians think the answer is yes.
These primary care physicians use a business model called direct primary care. Think of it as a Netflix subscription: patients pay a flat monthly fee for nearly unlimited access to their physicians.
A Solution to a Broken System
For years now, doctors have been compensated under a fee-for-service model. In this system, doctors are paid for each patient they see, each test they order, each prescription they write, and any other service they give. This model incentivizes doctors to see as many patients as they can. Ultimately, this reduces the time a doctor gets to spend with each individual patient. It also incentivizes doctors to order more tests and write more prescriptions, some of which may be expensive and unnecessary. Additionally, because sicker patients tend to require more tests and more prescriptions, it incentivizes doctors to have sicker patients. This further incentivizes over-diagnosing and a decreased focus on preventative medicine.
Under a fee-for-service model, the patient is not just paying their doctor to take care of them. They pay insurance companies to pay their doctor to take care of them. The health insurance companies become a part of the doctor-patient relationship and profit off of it. Not only do they offer the questionable incentives above, but they charge the patient to do it. Around 90% of doctors operate under this model.
The direct primary care model was pioneered by Dr. Garrison Bliss. After becoming a doctor, Bliss found himself frustrated by the shortcomings of the healthcare system. And when his son became sick with a brain tumor, Dr. Bliss was disturbed by the number of doctors who had too many patients, spent less time with them, and were ordering tests and writing prescriptions that did not seem necessary.
Determined to solve these problems, Dr. Bliss began tinkering with a new model in his own practice. Eventually, he would help launch Qliance, one of the first major direct primary care practices. From then on, he spent his career advocating for and practicing direct primary care.
But how does direct primary care get doctors to spend more time with patients and avoid charging them for unnecessary and expensive services?
It all comes down to the root of the problem: how physicians are paid. Instead of a fee-for-service model, direct primary care physicians use a subscription model. Patients at a direct primary care practice typically pay for a $30-150 monthly membership billed directly to them.
The direct billing to patients component is key here. In most cases, this eliminates the middleman. It kills the relationship between the doctor and insurance companies. Under a direct primary care model, doctors are paid the same, regardless of how many patients they see in a day, how many tests they order, or how many prescriptions they write. Their only incentive is to create a group of patients who deem their services valuable enough to continue to pay for them.
Additionally, without the burdensome insurance companies, doctors eliminate hours of paperwork a day. Without having to deal with hours of insurance paperwork, physicians can do more of what they actually went to medical school for: care for patients. Physicians at direct primary care facilities typically see patients for 30-60 minutes each visit. This starkly contrasts with insurance-dependent practices, where this number sits closer to 12-15 minutes.
Getting to do more of what they love and less paperwork reduces physician burnout – something especially important when around 42% of physicians report burnout. Physician burnout is a syndrome characterized by exhaustion and dissatisfaction relating to one’s career as a physician. Ultimately, it could lead to poorer work or leaving medicine entirely. This concern is especially relevant today, as more physicians are leaving medicine than ever before during a time in which they are needed the most.
But back to the patients. Direct primary care patients are served in more ways than just office visits. Most direct primary care plans allow patients to access their physicians by phone calls, video calls, text messaging, email, and more. And when direct primary care physicians want to consult via these methods, they don’t have to wait and see how to bill it to insurance.
Patients save money on more than just office visits and physician contact, though. Most states allow physicians to prescribe and dispense drugs from their offices. In the same way that direct primary care physicians eliminate the middleman of insurance, they can eliminate the middleman of pharmacies. By dispensing drugs in-house, direct primary care physicians can save their patients hundreds of dollars on prescription drug costs. In addition, patients can save on testing too. One direct primary care practice in Florida reported their patients saving 95% on lab tests. Physicians typically achieve this tremendous cost reduction – yet again – by cutting out insurance. They can perform tests in-house or even negotiate with labs to reduce their patients’ prices.
Where Direct Primary Care Draws Criticism
Direct primary care saves patients money and doctors time and hassle. Still, like anything, people have found reasons to criticize it.
First, patients often need more than just primary care, and their membership fee does not include specialist visits. Thus, most direct primary care patients still need some form of health insurance.
Often, their health insurance comes in the form of a high-deductible plan for catastrophic and medical emergencies. High-deductible plans have lower monthly costs, but patients are expected to pay more when healthcare costs begin to rack up.
Given that patients often need more than just primary care, the monthly subscription fee can become expensive in addition to normal or alternative coverage. Patients might save money on primary care, but if they require more treatment, healthcare could become another expense on top of what they already pay.
However, many direct primary care facilities are fairly inexpensive, staying on the lower end of that $30-150 range. In many cases, for less than the cost of a cell phone, patients have unlimited access to high-quality medical care. Furthermore, in direct primary care, there is no additional cost preventing the patient from seeing the doctor once they pay the monthly fee. As such, patients can expect more than just the twice-yearly visit. For no extra cost, they can call, text, or come into the office to see their doctor whenever anything might concern them. This close and time-intensive relationship with physicians, alongside reduced drug and test prices, helps prevent health emergencies for patients in the future.
Another criticism of direct primary care is that it could reduce access to primary care in a country with a shortage of primary care physicians. Most direct primary care physicians see significantly fewer patients than they otherwise would, meaning that fewer patients have access to them. Because of its smaller patient numbers and direct costs, direct primary care doctors can be seen as serving the wealthy and excluding the poor.
Dr. Garrison Bliss is trying to solve these problems. He believes that direct primary care practices can address these issues by reducing the monthly fees for less fortunate patients. Ideally, this would be balanced out by the hundreds of patients paying in full for membership at a given direct primary care practice. Furthermore, were health insurance plans to help with direct primary care, it might become a more viable option for many Americans.
Increased access to direct primary care practices could become a realistic idea if insurance companies were willing to help pay for it. Instead of paying all primary care physicians based on a fee-for-service model, insurance companies could include an option to see physicians operating under a direct primary care model. If the companies helped pay by just contributing to the monthly fee and not interfering with the way the physician does business, this could become a viable option.
Regardless, however, physicians like Bliss work hard to ensure their direct primary care practices are equitable to all patients.
A Growing Model
Direct primary care is growing fast. According to the Direct Primary Care Coalition, there are now roughly 1,200 practices across 48 states serving 300,000 people. That’s around one in one thousand Americans. This is up from merely 620 practices in 2017 and 124 in 2014.
This growth is no exception in our home state of Kentucky, which is now home to around 20 direct primary care practices, with around half of those being in the Louisville area. Dr. Erin Coopers started a practice in Lexington around three years ago. She believes direct primary care appeals to Kentuckians looking for “better care” and lower costs.
As the system grows, it’s also gaining more attention from lawmakers. By 2020, forty states had passed or were considering laws on direct primary care. Much of this legislation allows direct primary care practices to exist by treating them separately from insurance and permitting them to dispense drugs from their offices. This is the case in Kentucky, which became the eighteenth state to pass direct primary care legislation in 2017.
On the federal level, the Affordable Care Act has a provision that protects direct primary care plans. While Kentucky allows direct primary care practices to exist and dispense medicine directly, Medicaid still will not cover direct primary care fees.
Direct primary care is an undeniably successful and fast-growing business model that seeks to solve many of the problems within the current system of primary care in this country. By cutting out the often-criticized insurance companies, physicians get to spend more time with patients and save many of them money. With fewer patients and paperwork, direct primary care may even be a solution to physician burnout.
Direct primary care’s success lies in its boldness. It challenges the existing model, freeing physicians from the paperwork and corrupt incentives of a healthcare system run not by healthcare providers, but by insurance companies. It exemplifies how businesses can thrive when allowed to operate independently and freely. For that, it is certainly worthy of praise and attention.
Furthermore, direct primary care, with its benefits and deficiencies, is continuing to expand and change the way Americans practice and experience medicine. As citizens and patients, we can work to explore how this business model might best serve us, and how we can work to increase access, not only within direct primary care but across the entire healthcare sector.