Initial Impressions of Direct Primary Care
A neat real-world example of how prices and markets can work in American healthcare
As part of a project I’m working on at Hoover, I have been researching the direct primary care (DPC) healthcare model.
This report from the Society of Actuaries is a terrific and comprehensive evaluation of the DPC model. In addition, I’ve been interviewing DPC physicians around California. This handy mapping tool from DPC Frontier will show you just about every provider in the country.
The experience offered by direct primary care agreements sounds foreign compared to the typical primary care experience offered through insurance.
In this model, patients pay a fixed monthly membership (prices vary, but think around $85 a month) to have direct access to a primary care physician. As the AAFP notes, “This fee covers all or most primary care services including clinical and laboratory services, consultative services, care coordination, and comprehensive care management.”
Patients are typically able to get appointments either the same day or the next, and spend more time with their doctor during visits than in traditional primary care. Furthermore, access to their doctor is greatly expanded via phone, text, and email. These visits don’t require a co-pay or deductible, although some prescription drugs and laboratory tests have out-of-pocket fees. Notably, the prices of any extra costs are prominently posted—no prodding from the government required.
Direct primary care doctors contract directly with patients or occasionally self-insured employers, but not insurance companies or Medicare.
DPC complements insurance, but doesn’t replace it. It is often suggested that anyone signing up should pair it with catastrophic or other low-premium, high-deductible insurance. One DPC doctor I talked to likened it to how people’s relationships with car insurance works: If you get in an expensive accident, you use insurance. But if you need to fill up, get an oil change, or fix a busted window, you don’t bother with insurance.
Whereas traditional primary care physicians might have 3,000 patients, DPC doctors often have around 600. In addition, the lack of billing and insurance headaches means staffing requirements are flipped. While there might be three to four staff per clinician in traditional settings, DCP practices might have two to three clinicians per staff member.
Every DPC physician I have spoken with has stressed how much more time they have with their patients. Instead of a quick office visit and diagnosis, they have more time to do research, follow up, and offer continuous care. Hospitalization isn’t covered, but most DPC doctors I talked to were clear that they would be present and advocate for their patients while they were there. Frankly, it sounds like the relationship you always wished you had with your doctor.
The Society of Actuaries report I mentioned is full of other fun nuggets. They conducted a survey of 200 DPC providers, representing 10-20 percent of all physicians practicing in a DPC setting. Some highlights:
The average per-person monthly membership fee was $40 for children and $65-$85 for adults, depending on their age.
About two-thirds hadn’t increased their membership fees in the past three years. The average increase overall was reported at 1.5 percent.
About 5 percent of their members terminated their DPC memberships after one year.
When they asked DPC physicians about their experiences compared to when they were in traditional care, the responses were telling:
Overall (personal and professional) satisfaction (99%)
Ability to practice medicine (98%)
Quality of primary care (98%)
Relationships with primary care patients (97%)
The amount of time spent on paperwork (88%)
The amount of time spent at the office (73%)
Notably, only 34 percent of respondents reported making more money in their DPC arrangements than in traditional care.
These responses track with the conversations I’ve had with DPC providers. I asked one DPC doctor what it would take for him to go back to practicing under the traditional model. He said he would rather leave medicine altogether. Another flat out told me there was absolutely no way he would go back.
What about health outcomes and spending? The Society of Actuaries report was able to get claims data from a large employer that began offering one insurance option paired with DPC access. It covered 1,000 employees and 1,000 of their dependents, and about half of their sample switched when the option became available to them.
After adjusting for risk and demographic factors, individuals with the direct primary care option spent 12.6 percent less over two years (p < 0.01 percent statistically significant result). Reductions in outpatient emergency spending were 52.5 percent and physician preventative services were 35.5 percent (p < 0.001 percent statistically significant). There were other reductions in spending, but not at a statistically significant result. Here’s the relevant table (page 30):
The reduction in emergency spending is really interesting and probably explained by the 24/7 access to primary care physicians in the DPC model. If you need access to a doctor after hours in the traditional model, you go to the emergency room or an urgent care clinic that charges extra. If you have a DPC doctor, you just call them – at no extra charge.
I’d love to see more research using claims data, yet that initial survey certainly bodes well for possible reductions in unnecessary health spending.
Direct primary care agreements aren’t a panacea or the solution to every health care problem in America. Instead, they’re an example of what kinds of solutions occur when markets and prices are allowed to operate and innovate.
It seems like more availability and adoption of direct primary care would be good for many people and the system writ large.
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