Direct Primary Care: Back to the Future or Disruptive Innovation

Would you pay out-of-pocket for primary care services completely separate from insurance, specialists, hospitals and everything else? Would you pay $80 to $100 per month to have a one-on-one relationship with a primary care physician who’s accessible and unhurried in their approach to your care? That’s a bet growing numbers of physicians are making.

Changes in the design and delivery of primary care and preventive health services is the health system’s most pressing domain for improvement and innovation. Bending the health cost curve via bundled payments, provider-sponsored risk, accountable care et al without reducing avoidable demand for the system’s services is a zero sum game. It’s akin to putting new chairs on the deck of the Titanic.

Four trends buttress this compelling reality:

  • Health costs are going up, driven by increased utilization and increased medical inflation. Per the Congressional Budget Office and CMS Office of the Actuary, spending per year will increase almost 6% annually for the coming decade.
  • Chronic diseases, left unattended, are appearing earlier and progressing to acute events faster than ever. Up to 75% of health costs are the result of chronic conditions left unattended.
  • The scope of primary and preventive care is widening. Diagnostics and treatments are becoming more sophisticated, physical and mental health more necessary, traditional and alternative methods more integral and nutrition, preventive dentistry, eye care, pharmacy, over-the counter therapies, probiotics and other interventions more necessary.
  • Access to traditional physician-centric primary care is limited and in short supply. The economics of traditional primary care are problematic: primary care clinicians are compensated significantly less than specialists and the majority are seeking financial security .

Against this backdrop, there’s a disconnect. Primary care physicians are frustrated. They chose the profession with no delusion of wealth. They get personal satisfaction in caring for “their patients” –that simple. They resent mandates for information technologies and meaningful use, insurer meddling via utilization reviews, report cards and narrow networks, and hospital fondling of specialists who drive revenues and influence. They hear about population health and value-based payments, and roll their eyes. They suspect patients are ill-equipped to care for themselves and see their role as gatekeeper to services provided by specialists, hospitals and others. They are indignant about encroachment by nurse practitioners, advanced practice nurses and retail clinic operators who offer primary care lite. And they are open to career options that allow them to maintain a sense of professional integrity and lifestyle security. In short, many primary care physicians want to practice the art and science of their trade the old-fashioned way: high touch first, high tech second. They want to treat patients, not consumers. They want to spend time with patients themselves rather than defer to mid-levels and telemedicine. They want to protect the dignity of the profession and avoid its industrialization as employees of hospitals, health insurers and large employers. 

As many as 4000 physicians have chosen the route of concierge medicine, charging patients for access in addition to accepting third party payments from insurers. But Direct Primary Care (DPC) is something different. No insurers are involved. It’s a direct business relationship between a physician and an individual or family based who pay a subscription-based retainer for primary and preventive health services only. It’s old school primary care. To date, more than 345 DPC practices operating in 45 states have chosen this route hoping it gains widespread acceptance. 

The DPC model is still a work in process: Kaiser observed “The number of participating physicians is low. There’s already a nationwide shortage of primary care doctors. In this model, physicians see fewer patients, potentially exacerbating that shortage’s impact. Also, Medicaid negotiates the monthly payment rate, which could be less than what doctors might set independently.”

Nonetheless, DPC merits attention. How it fits into the new normal circa the Affordable Care Act is fuzzy. The ACA opened a door to expansion of DPC via its Direct Primary Care Medical Home (DPCMH) Pilot Program being tested with non-Medicare enrollees by Horizon and Aetna. DPCs are disqualified from participating in health exchange offerings unless they sell a qualified health plan themselves so Exchanges would be required to develop a separate accreditation and certification process different from certifying health plans if DPCs were allowed. And for regulators, the potential that primary care services would be carved out of traditional insurance coverage is problematic: “allowing a separate offering would require consumers to make two payments for full medical coverage, adding complexity to the process of acquiring health insurance, ensuring enrollee have access to the full complement of the essential health benefits to which they are entitled, and complicating the allocation of advance payments of the premium tax credit.”

Notwithstanding these challenges, the DPC merits attention. Hybrid DPC models in Washington, Nevada and Colorado are providing services to Medicaid enrollees, and 16 states have enacted “Direct Primary Care Protection Laws” to clarify that DPC is “not subject to state insurance regulation.” The names Iora, MedLion, Paladina, White Glove Health, Atlas, Spark and others are popping up in conversation and private insurers like Cambia and others are making investments in the model. And, Qliance, arguably the best known in the DPC genre, reports its practices save 19.6% of health costs while increasing virtual and real visits to the primary care practices 58% in a one-year period. 

What’s the future for DPC? It’s too soon to tell. Its early adopter physician participants are hopeful: “We do not worry about coding or making patients come into the office to be paid…I have not used a 99213 code since finishing residency, and I never plan to do it again!” Another said “When someone pays you directly and you cut out insurance, you get back to the heart of the physician-patient relationship" the DPC physicians told Medscape.

What’s clear is that the landscape in primary care is changing, and physicians have options beyond employment by hospitals, large medical groups and insurance companies. Whether a full range of primary and preventive health services can be carved out of traditional insurance coverage, valued at a level that consumers will desire and purchase directly, and how specialists, hospitals, insurers and employers align with DPCs is a work in process.

But what’s clear is this: the future for primary care services is the frontline in healthcare. Direct Primary Care is a model that’s attractive to physicians who want to treat their patients independently, personally and without being in a hurry. It’s a throwback to the days when office-based primary care was more about Marcus Welby than meaningful use and accountable care. 

DPC may be a carve out of traditional primary care for a few physicians or a fundamental re-structure of primary care services that’s disruptive to the entire system. Stay tuned.

Paul