Anyone remember Marcus Welby, MD? Think about your most recent visit to your health care provider. Does visiting your doctor seem more like a factory production line than the type of relationship that Dr. Welby had with his patients? Well, Dr. Welby is making a comeback. And this time he also has an iPhone, he has given you his direct number and he invites you to call and text him 24/7. This is not make-believe; it’s happening all over America today.
It’s called Direct Primary Care (DPC) and it completely bypasses today’s traditional fee-for-service health insurance model. With DPC, consumers pay a recurring fixed monthly fee directly to the doctor for basic medical services. The monthly amount can vary from $39 to $150 for adults depending on the doctor, the area and sometimes your age (most charge less for kids and some have family pricing). There are no deductibles and usually no co-pays.
DPC has many benefits and some disadvantages, depending on a person’s particular situation. In order to understand these advantages and negatives, it’s necessary to understand just how DPC works.
The “direct” in DPC means getting rid of the middleman—insurance. Decades ago, health care was between a patient and a doctor with no third party. In today’s society, insurance acts as a third party. Often there is also a fourth party: how often do you talk to a medical assistant instead of your doctor when you call for consultation? There is even a fifth party—government, which tells the insurance companies (and the doctors!) what they can and cannot do. That’s a lot of layers. Our current health care system is a virtual machine of third-party payers, pre-approvals, government regulations, networks, and reimbursements. DPC restores the heart of the physician-patient relationship, without involvement of the government or insurance companies.
With DPC, patient treatment is not determined by what insurance will cover but rather by what the provider thinks is best for the patient. It’s not about what’s reimbursable, but about what’s appropriate.
Visits are often longer and very personalized. As one doctor put it, “It’s okay to not check your watch during the patient visits.” Whereas normal primary care providers usually have thousands of patients, DPC providers usually have only 400-600. Providers get to know their patients well with attentive 30-60 minute appointments, frequent communication and long-term relationships.
Patients are able to greatly reduce usage of “urgent care” clinics and emergency room visits because DPC providers see patients the same or next day, and are available for direct consultation 24/7.
Prevention gets a big bump in DPC practices as well: because the health care provider gets paid a little over a long period of time rather than huge sums all at once, they are thus incentivized to keep the patient in good health for the long term. With nothing extra to pay for wellness visits, patients don’t wait until a problem gets so bad that it’s more difficult to treat.
DPC is changing the lingo as well. If there is no longer a need to wait to see your doctor, then why have a “waiting room”? DPC practices instead often have a reception area.
From a consumer perspective, many DPC patients note how easy it is for them to budget for their care. Monthly fees are very reasonable, and additional costs are presented up front–who doesn’t love transparent pricing? Here’s an example of what is commonly included in the monthly fee:
All of this sounds great, but is it financially viable? Doing away with transaction-based health services and third-parties can have a tremendous impact on overall costs. A Heritage Foundation paper notes that 40 cents of every dollar of traditional primary care spending goes to insurance-related costs rather than to patient benefits. In hospitals, the “mark-up” can be even higher. By cutting out the overhead of billing insurance companies, most DPC providers find they only need one or two support personnel. In today’s system, the true cost of health care services is hidden by administrative costs, paperwork and regulation.
There are added benefits to DPC providers, who see a more consistent and timely cash flow, better patient relationships and more time actually practicing medicine rather than doing administrative work and managing employees. Most DPC practices currently in existence have been opened by physicians who came from traditional practices or hospital settings but were burned out by the current system. They moved to DPC for a more fulfilling option, and as a result, DPC is seeing rapid growth in America. There are currently DPC practices in 46 states and Alaska appears to have at least one (more on Alaska specifics in a future article here).
DPC, for all its positives, is not comprehensive. DPC patients usually also have a catastrophic health plan with a very high deductible to cover hospitalizations and surgeries. Believe it or not, Direct Primary Care was given a boost by being included in a little-known provision of the Affordable Care Act. It’s required that DPC be included in state exchanges, but must be paired with a “wrap around” insurance plan for non-primary-care coverage.
Another important consideration is specialty care. In most DPC practices, the monthly fee does not include care by specialists to whom the patient is referred. However, some DPC providers arrange special cash-pay rates with referral specialists.
Additionally, it’s interesting to note that more and more specialists such as orthopedists and cardiologists are offering a form of direct care. For example, at Freedom Orthopedics in Georgia, an initial orthopedic visit is $300, which covers all office care including medical evaluation, x-rays and any additional office treatments such as a cast, split, sling, injection, laceration repair or fracture reduction. Follow-up visits are $80 and also are all inclusive of office care.
Other costs that are sometimes not covered in DPC practices are prescriptions & less-common lab services, although many DPC providers give patients access to hugely discounted medications, and have secured wholesale contracts for labs.
Certain DPC practices don’t include imaging/X-ray services, but some do, and many others arrange significant discounts with imaging providers.
Not having certain medical costs included may be considered a disadvantage, but this does provide one benefit that the traditional health care model does not—price transparency. If you are going to need medications, labs, or specialty care, you will know exactly how much you will have to pay in advance.
If you are thinking this doesn’t apply to you because your employer provides your current health insurance, it could be coming soon. More and more employers are offering DPC. In some cases, it is being offered as an alternative to fee-for-service insurance. Particularly with small employers who can’t afford traditional fee-for-service insurance plans, they are moving to DPC as the primary health benefit for their employees.
Once you understand the Direct Primary Care model, you can see that our traditional health care system is certainly not based on the free market. The effects of having a third party between you and your health care provider, let alone a fourth party like government, can be quite detrimental. And in the end, health insurance is not health care. DPC might be just the medicine to inject a little free-market boost.