Strategic Planning

Direct Primary Care Gains Traction

May 15, 2017 1:09 pm

The burgeoning model has caught the eye of self-insured employers due to its consumer-friendly approach to care delivery and payment.

Mark Watson, executive human resources director for Union County, N.C., likes to tell about a visit to his physician that took 40 minutes out of his workday, including travel time and a strep test.

He also likes the story of a Union County employee who was scheduled for visits to two specialists—a dermatologist and a surgeon—and then surgery to address a worrisome mole. A few days before the surgery, he mentioned the procedure to his new primary care physician during an annual physical. “And the doc biopsied the thing right there, sent it off to the lab, and got the results back the next day,” Watson says. “Everything was good, so he canceled his surgery.”

And his favorite is the one about the deputy sheriff who started feeling sick during an overnight shift. He called his primary care physician at 1 a.m., drove to the all-night pharmacy for a non-drowsy prescription that got him through the shift, and visited the doctor’s office at 7 a.m. to get checked out.

The hero of all three stories, in Watson’s telling, is direct primary care. The county pays a flat monthly fee to a direct-care practice that does not accept insurance. The arrangement is reducing patients’ medical and pharmaceutical costs—and improving employees’ productivity because they spend less time out of the office to go to medical appointments and recover from illnesses.

“It facilitates an incredible amount of efficiency at a number of levels, not least of which is that it keeps employees present on the job,” he says. “I call that a Holy Grail.”


DPC 101

Direct primary care (DPC) is a delivery and payment model that steps completely away from fee-for-service payment and insurance. Details differ from one DPC practice to the next, but the general idea is this: The practice charges a monthly retainer—typically $40 to $80—per patient for unlimited access to primary care, preventive care, and chronic care management, including after-hours access by telephone, email, or text.

Consumers who join a DPC practice on their own are encouraged to have an insurance policy to cover emergency care, hospitalizations, surgery, and other high-cost services. For employer-sponsored health benefit plans in which DPC is offered, it is bundled with a major medical and prescription plan to provide a full range of coverage.

With no need for a big back-office staff, a direct-care practice has much lower overhead than practices that bill and collect money from insurers and patients. In turn, providers can have smaller patient panels and spend more time with patients.

“I did this because I wanted to be a doctor again,” says Jeffrey Gold, MD, who opened a direct-care practice in Marblehead, Mass., two years ago. “I did not want to be a computer data enterer. I wanted to have the time to practice ‘relationship medicine’ again, rather than ‘transactional medicine.’”

Gold Direct Care is one of dozens of DPC practices that have emerged across the country in recent years. The DPC model has the support of the American Academy of Family Physicians (AAFP), which regards DPC as an innovation that delivers on the Quadruple Aim of improved patient experience, better population health, lower costs, and happier clinicians.

“What I see in talking with these men and women who have adopted this type of practice is that they are extremely satisfied with their work environment and their relationships with patients, both face-to-face and electronically; the patients are very happy; and the outcomes are quite good,” says Doug Henley, MD, AAFP’s executive vice president and CEO.

Direct Care in Practice

Not to be confused with concierge practices, in which consumers pay hefty retainers for 24/7 access to their personal physician, DPC practices tend to use a medical home delivery model that focuses on efficiency and effectiveness. For example, Gold says, instead of asking a patient with hypertension to come to the office frequently for monitoring, he would advise purchasing a blood pressure monitor and reporting the readings by email.

Concierge practices are sometimes criticized for serving only patients who are healthy and wealthy, but DPC practices serve a broad array of consumers who are attracted to the care model for a wide range of reasons. Two primary benefits: longer appointments—a DPC visit tends to be 30 to 45 minutes—and the ability to connect with the provider as frequently as needed.


That level of support is perhaps most valued by individuals who are trying to manage chronic conditions.

“Trust me, we are not cherry-picking people,” Gold says. “I have gotten people off opiates, and I have some of the most complicated patients whom the healthcare system has completely failed and who are looking for someone to spend time to listen to them.” (Leadership Blog:Why Direct Primary Care Works for Me,” by Jeffrey Gold, MD.)

Employers Jump In

The prevalence of employer-sponsored insurance in America is a barrier to the DPC model. Gold’s practice has grown to 600 patients in two years, but he finds many individuals who are attracted to the idea of direct care but are not willing to pay for it because they have employer-sponsored coverage.

Watching DPC gain traction across the country, however, Gold increasingly is convinced that the delivery model has a significant role in the future of U.S. health care. “I think the tipping point is employers,” he says.

John Blanchard, MD, CEO of Salta Direct Primary Care in suburban Detroit, agrees. He ran a direct-care practice that targeted individual consumers for more than a decade before launching Salta in 2015. The company’s first contract is with United Shore Financial Services, which has 1,800 employees.

“Direct primary care is going to continue to scale in the individual market, but it’s going to take off like a rocket with self-insured employers,” Blanchard says.

Salta opened a clinic—built and paid for by United Shore—at the company’s headquarters. United Shore pays Salta $70 per employee per month for acute care, chronic care, and preventive care/wellness visits, as well as coaching on positive lifestyle changes such as weight loss and smoking cessation. Employees pay a $10 copay per visit and have 24/7 access to a member of the care team, which includes a physician, a nurse practitioner, and a physician assistant.

“Smart CEOs of companies, especially self-insured companies, are recognizing that there’s no insurance-based, insurance-centric solution for their healthcare problem,” Blanchard says. “Their problem is they’re footing the bill, in large part, for health care for their employees, but they have no control over its quality or delivery.”

Contracting directly with a primary care practice gives employers more control because physicians have a financial incentive to keep their patients—and their patients’ employers—satisfied. “The model is very simple: We allow our physicians to have more time with their patients,” Blanchard says. “More time allows for more effective communication. More effective communication allows for a relationship of trust to evolve between the patient and physician. Now, in the context of that relationship, you can engage patients to help them take responsibility for their own health and wellness.”

Meanwhile, the primary care team is looking for ways to avoid wasteful spending, knowing that every inappropriate test comes out of the practice’s pocketbook.

To encourage employees to choose the DPC option, Union County, N.C., officials offer an incentive: Employees who stick with the traditional health plan are responsible for $750 per year in out-of-pocket expenses for routine medical services, while those who go with DPC avoid those fees.

In the first year, 44 percent of the county’s employees went with DPC—and to good effect, according to an analysis by the John Locke Foundation, a North Carolina research organization. As a group, the employees who used DPC incurred 23 percent less in medical expenses and 36 percent less in prescription expenses than their peers in the traditional health plan.


Regulatory Matters

While 16 states have passed laws affirming that DPC is not health insurance, most have not. “We are concerned about the potential that some state insurance commissioners could get a bit overzealous and declare direct primary care as some kind of an insurance model, and generate a huge amount of unnecessary regulation,” Henley says.

In addition, the IRS regards DPC contracts as health plans and thus prohibits individuals with consumer-directed health plans from using money in a health savings account to pay for DPC. The AAFP and others are lobbying for the Primary Care Enhancement Act, which would reverse the IRS’s position.

“If those two things were clarified, I think direct primary care will get greater traction,” Henley says.

Lola Butcher writes about healthcare business and policy topics for several HFMA publications.

Interviewed for this article:

John Blanchard, MD, CEO, Salta Direct Primary Care, Troy, Mich.; Jeffrey Gold, MD,  owner, Gold Direct Care, Marblehead, Mass.; Douglas E. Henley, MD,  executive vice president and CEO, American Academy of Family Physicians, Leawood, Kan.; Mark Watson, Union County (N.C.) executive human resources director, Monroe, N.C.


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