A recent Medical Economics article asked “Is the DPC model at risk of failing?”
The piece focuses on two large DPC-like organizations, Qliance Medical Management of Seattle, Washington and Turntable Health of Las Vegas, NV, working in partnership with Iora Health, which recently closed their doors. Qliance and Turntable were not actually DPC practices by strict definition; they were innovative large business operations providing healthcare services to patients and excluding third party payers. Their idea was commendable, but their closure indicates little cause for concern in regard to the growing Direct Primary Care movement.
Robert Berenson, MD, who admits to not being a fan of the DPC model, said “Qliance has been the poster child for DPC… If that one can’t make it… it suggests the business model (of DPC) is flawed.” He is correct about one thing; the “business” model of medicine is certainly flawed.
What Dr Berenson fails to realize is that DPC is not a “business” model; it is a “care” model. Whether accepting insurance or DPC in structure, we already know solo and two-physician practices deliver the best care and have been doing so for the past 100 years. These intimate clinics know their customers better than anyone else in the industry, and can devote the time necessary to their clientele; these micro-practices should be known as the small giants of healthcare.
Strictly defined, Direct Primary Care is a practice model centered on an arrangement wherein a patient and physician enter into a contract to provide unlimited primary care services for an affordable monthly fee (less than $100/month.) 80% of healthcare needs can be met in a DPC practice. The typical DPC practice has 1 or 2 physicians, 600 patients maximum per physician, and on average each physician sees 10 patients per day. Employees are minimal, usually including a receptionist and/or medical assistant. Only minimal office space is required to run such a lean operation, so overhead remains low. Supplies, medication, and equipment are purchased on an as needed basis and used only when necessary.
Qliance, founded in 2007 by Dr. Garrison Bliss and Dr. Erika Bliss, charged $64/month for adult members and $44/month for children. They had 13,000 patients in total including primary care and emergency care services, more than 20 times the number of patients compared to a traditional DPC clinic. They were trying to use a model embraced by direct primary care practices yet scale it into something entirely different. After 10 years, the experiment failed.
Iora Health, vying to become the “Starbucks” of healthcare, was in partnership with Turntable Health utilizing a “team based” concept. Each “team” included a physician, nurse, and a health coach. This model contracted with individuals, but also employers and unions already paying for healthcare by offering improved access to primary care services and pocketing a portion of the savings that materialized. In this model, physicians usually had 1000 patients and each health coach with a few hundred. Turntable charged $80/month for adults and $60/month for children to have access to their vision of a “wellness ecosystem”, which included yoga, meditation, and cooking classes.
An article in the New York Times quoted Duncan Reece, the VP of Business at Iora Health, “We wanted to do something radically different and show this isn’t your grandfathers’ doctor’s office.”
I get it. This is the kind of things that VP of Business say.
Let’s walk it back. Can someone please tell me what was wrong with that model? It was a quintessential small giant of the business world. My grandfather was an outstanding general practice physician with a small office and one nurse on staff. He made house calls. He did appendectomies, tonsillectomies, C-sections, vasectomies, and met most of his patients’ basic primary health care needs for 40 years. Why do we need something radically different?
The bottom line is healthcare requires two participants.
One physician and one patient. While it is a nice idea, we do not need yoga, massage, or smoothie bars in our clinics to improve patient outcomes. Adequate medical knowledge and time for meaningful conversations is essential; something the small giants of healthcare are experienced in providing. The vision of a “wellness ecosystem” should probably go the way of the “patient-centered medical home,” as there is little cost savings or difference in outcomes compared to the traditional fee-for-service system.
So what qualities make the best practices? According to a study conducted by The Peterson Center on Healthcare at Stanford, the very best primary care practices have either one location or a small handful of them. Stanford compiled a list of 10 distinguishing features of these top practices and many are commensurate with being a “small giant” of the business world. My favorite characteristic on the list is to invest in people, not space or equipment. By lowering overhead, physicians are not relying on patient volume to generate adequate income. These practices are consciously choosing to stay small by renting minimal space and investing in added services only when believing them to be more cost-effective.
The government and insurance companies cannot fix healthcare. It is up to physicians and patients– one micro-practice or DPC clinic at a time. Dr. Kimberly Legg Corba, owner of Green Hills Direct Family Care, said “The DPC model is growing and practices are converting all the time. Some are opening by transitioning an established practice, some are physicians starting clinics fresh out of residency from scratch, and others are leaving employed positions to return to practicing medicine in a way they love.”
While my practice is not DPC, it is a small, old-fashioned clinic serving families for as long as three generations. Our records are still on paper, a real human being answers the phone when it rings, and for occasional emergencies, patients stop by my house for a “reverse house call.” My belief in the DPC model is steadfast because any “care” model placing control directly into the hands of physicians and their patients is worth fighting to preserve and protect. The more small giants able to thrive in the constantly evolving healthcare landscape, the greater chance physicians have of inciting a large scale revolution to benefit patients everywhere.
Since the Affordable Care Act legislation went into effect, mergers and consolidations have increased by 70%, at the expense of care becoming less personalized and increasingly fragmented. These large institutions are profit centers for CEO’s and business executives who have very little knowledge of what goes on between a physician and a patient. They need the independent practice model to fail so patient choice is no longer an option.
The small giants, micro-practices and DPC clinics, will continue to prosper and grow because a “care” model devoted to preservation of the physician-patient relationship cannot be defeated. Physicians must stop being afraid to take that leap of faith, leave employment, and go back to doing what we love most, caring for our patients and improving their lives. Physicians should be standing at the bedside, not in front of computer workstations. Direct Primary Care is a model for which we should all be rooting; it is transforming the physician-patient relationship and restoring the practice of medicine to its noble roots, allowing for the art, the science, and the wholly fulfilled physician.
My advice for patients everywhere: Whenever possible, find an independent practice, whether a solo doctor or direct primary care clinic, and patronize that physician. Your care will be more personalized, cost less in the long run, and your health will be better for the investment you made in yourself.
Categories: Uncategorized
I am 67 years old, on medicare and lost my two Primary Physicians in two years.I wish to make you aware, if you are not already, that all across our state and country hundreds of thousands of patients are being abandoned by Primary Care Physicians who opt to practice under the DPC model . On average 190,000 former patients, per 100 primary practices switching to DPC, have to look for a new Doctor.This scheme also undermines the Obama ACA Act.Plus patients have no government recourse with bad Doctors because DPC practices do not have to adhere to the same rules and regulations as traditional Primary Care PracticesDumping or abandoning hundreds of thousands of former patients to practice the DPC model does not seem to be a sustainable method of practicing medicine.and the ethical questions are being ignored. This is especially hard for senior citizens on medicare to find a new doctor and ethically suspect. Health Savings Accounts should not be used to pay for this type of Medical Practice to do so would put further burden on our medical system and patients.Below is an excerpt from an American College of Physicians article:
Our paper in no way says that physicians have an ethical obligation to see a certain fixed number of patients, whether in traditional FFS practices, DPC, concierge, or any other type of practice. Rather, we recommend that when a physician “downsizes” his or her patient panel for any reason (not limited to concierge or DPC; physicians in traditional practices may choose to begin seeing fewer patients for any number reasons), there needs to consideration of what the impact will be on patients that no longer will have access to the practice and would have to get care elsewhere, the impact on the large community, and especially, the impact on access for poorer patients. (Does the downsizing, for instance, when combined in other changes in the practice, result in poorer patients being disproportionately being the ones who are left behind?, even if they would prefer to remain in the practice?) Downsizing also creates legal and ethical issues associated with patient abandonment that physicians need to be aware of. Here is the relevant statement from our policy paper:
“Physicians in practices that choose to downsize their patient panel for any reason should consider the effect these changes have on the local community, including patients’ access to care from other sources in the community, and help patients who do not stay in the practice find other physicians.”
Bob Doherty Senior Vice President, American College of Physicians Government Affairs and Public Policy
Sincerely
Barry, thank you for your positive comment. Sorry, but I can’t answer the question you ask “ that would qualify as “complex” patients” as that is based upon the definition of the world “complex” along with the experience of the individual managing the problem. One could say that almost every action a physician takes is of high complexity since every action is a result of an incredible amount of training and knowledge. Some might find a response by a physician to seem simple, but that person probably doesn’t realize how much knowledge is quickly entertained before the response is provided.
“I certainly agree with your suggestion that patients should be able to choose the type of care that best suits them.”
I should have also added that one person’s choice in general should not obligate another.
You are correct DPC is subject to the principles of adverse selection.
Allan, thanks for the informative summary. I’m interested in your estimate of the percentage of the population that would qualify as “complex” patients, both for the under 65 population and the Medicare eligible population. For example, would an otherwise healthy diabetic whose condition is well managed with medication qualify as complex? How about a patient with heart disease that’s doing well with medical management (prescription drugs)? How about someone with asthma but no other medical issues?
I certainly agree with your suggestion that patients should be able to choose the type of care that best suits them. Healthy patients may be happy with an HMO in exchange for a low health insurance premium and little or no copay due at the point of service. Others may be perfectly fine with traditional primary care while still others may prefer a DPC practice. There was an article in the New York Times a few days ago about what might be called extreme concierge medicine for the mega-wealthy. Doctors in these practices have panels of no more than 50 patients each and charge an annual retainer of $40-$80K!!! One doctor was quoted as saying the fee is probably less than the annual landscaping bill for the patient’s mansion.
One interesting financial wrinkle of DPC practices is that they are subject to the same adverse selection risk as insurance companies are under guaranteed issue rules. So if a DPC doctor has room in his practice for new patients and the patient is able and willing to pay the subscription fee, he can avoid the fee by sticking with traditional primary care until his health worsens to the point where he becomes a complex patient and can sign up with a DPC practice then. Can’t he? The concept lends itself best to serving the most complex patients because that’s where the value is from the perspective of the patient paying the subscription fee. That’s why I said it looks like a niche market to me. Most non-complex patients probably won’t think it’s worth the money whether they can afford it or not.
This is the benefit of DPC. The patients can judge for themselves the “value” of the arrangement and care they are receiving. It’s not determined by some nebulous governmental quality measures.
Seriously, Barry?
“I’ve also read that ER doctors claim to be able to figure out what’s wrong with a patient or at least what tests need to be ordered within about five minutes the vast majority of the time. That raises the question of how much time a primary care doctor needs to spend with a patient to accomplish the same thing.”
I’ve read that online traders can make a million dollar investment armed with nothing more than a Google search and a small Starbucks coffee. Does this suggest to you that somebody needs to take a look at how institutional money management works?
All those research reports and all those e-mails?
Tsk tsk tsk.
Such inefficiency.
“I invite you to spend a day, a week in one of our DPC offices and see the level of complexity, chronic disease issues we are treating”
Horses, for decades I treated one of the sickest populations in my area. All too many of my patients had multiple major diseases and were on a laundry list of medications necessary for survival. Originally I didn’t have the advantage of all the imagery you utilize today so I had to spend even more time on history and physical exam. Therefore, I don’t think you have to invite me to your practice to see how to treat a sick patient.
For those that are not physicians very complex patients need a lot of time, perhaps 45 minutes to an hour with a potential follow-up on another date, but after a patient is stabilized and is coming for a simple follow-up 10 minutes might be more than necessary. Most very complex patients either die or don’t require every follow-up to have a lengthy face to face with the physician.
I am not saying that a 7 minute average visit is an optimal time frame. It isn’t, but let’s deal with the 7 minutes you talk about. That is over 68 patients in an eight hour day. How many primary care physicians not in a clinic situation on a regular basis actually see anywhere near 68 patients a day or even half that number? Very few if any. Such hyperbole as the 7 minutes doesn’t advance our knowledge. Admittedly today’s EHR’s have further complicated an already complicated situation, but that is not because of the time physicians spend face to face with the patient.
Let’s avail ourselves of mathematics. In 8 hours one can see 10 patients for 45 minutes a piece. Simple follow-up care in a stable patient doesn’t require 45 minutes. My time slots varied from 1 hour for a new highly complex patient to 10 minutes for a simple follow-up and not all simple follow-ups required the full 10 minutes face to face. Example: a diabetic coming for blood testing can have shoes and socks off while I am not in the room so that when the blood sugars are discussed their feet can be observed (frequently left out in a diabetic exam). When a physician knows his patient’s medical issues, his care takes a lot less time.
“ You imply that all we are seeing is the “walking healthy,” ”
I implied no such thing and if you feel otherwise I hope you quote my relevant sentences so I can explain further. I did imply that practice makes perfect and that 10 patients a day doesn’t provide the experience needed to develop one’s skills when a physician is relatively new to practice.
You seem to believe I don’t see merit in a DPC practice. I see merit in all types of practice and believe that all types should compete with one another based upon what the patient perceives is the best care for him. You are not the only one saving patient’s money. I did that for decades and protected my patients from being ripped off even helping them get onto drug plans for the affluent. That telephone call was done by a secretary while I saw another patient.
DPC, however, costs more to the patient who still has to carry insurance for all other care. It also requires the training a lot more doctors at substantial costs. If one has the money DPC may be worthwhile, but that choice belongs to the patient who should be permitted to avail himself of the type of care he desires.
“It looks like a niche market to me” – I can say in my experience, patients who experience DPC care within a short period of time realize the value (not just the health cost value but the relationship, access, face-to-face time, knowing their doctor is human, etc) that for them they don’t want to lose it. For most patients who have experienced DPC care, it’s a no-brainer. Once enough patients see the difference and know it exisits, it’s hard for patients to see it any other way. I had a micropractice before and the experience was the same even though the payment (FFS) was different and much more challenging for the doctor and patient’s value the extra time their primary care doctor spends on them. Unfortunately, it’s hard to “value” care, just like mental health professionals don’t get “valued” for their interventions with patients because we’re not “procedurizing” our care.
Barry, just so you know what it’s like to be a DPC physician, I can say about 50% of my panel fits the complex criteria. This will differ based on locales and especially DPCs that do large contracts with an employer, and depending on the employer type – you’ll see a difference in patient populations (workplace or chronic pain/injury for manual labor but also chronic diseases from sedentary, desk jobs, long-term computer screen use, etc).
But the key here is that a DPC physician is much more flexible and adept at spending more time with a patient that fits this complex criteria, address patients in non-face-to-face modes if not needed (those that have general health questions) and even spend more time with patients who are trying to be healthy and get expert advice about lifestyle modifications, mental health challenges…things that usually get turfed off in FFS because primary care physicians don’t get compensated for this level of care adequately if at all. So in a given day, I’d be spending 80+% of my time with the complex criteria even though my total panel is 50% and at the same time, I’m able to maintain a relationship with my healthy patients with reminders and outreach efforts so that they know that they can turn to me if and when then need to. I’m also more flexible with my schedule to insert urgent and same-day visits without having to double-book and affect the patient-physician relationship by respecting my patient’s time.
Lol, Mr. Kuraitis, it would be awesome if the WSJ stayed out of it entirely, but medicine has become big business for a lot of entities hasn’t it? It is BIG NEWS! I am sick of reading about my profession in business journals. We ARE the “business” churning out the “product” which is sickening (although this no longer applies to me thank God, I am DPC); without the doctors none of these big businesses would have anything to discuss. There is no other industry in the country where fees for services, never mind a service that requires the training and expertise we have, has it prices dictated by outside entities. I am agreeing with you Mr. Kuraitis, just getting on my soapbox. And I find it curious when business people who know nothing about medicine comment on how I should be paid or how to do my job. I don’t profess to be an expert on finance or advanced business issues, so I would ask that non-physicians stop telling us how to do our jobs and critiquing whether any form of training is adequate–that why we take certifying board examinations.
So how many patients out of your panel of 600 (on average) fit the complex criteria as opposed to basically healthy patients who may only come in once or twice a year? DPC appears to be a good choice for the complex patient who needs more time with the doctor than he can get in a traditional primary care practice and he will perceive that he’s getting his money’s worth from his subscription fee as well. The issues are, what percentage of patients, especially among the non-Medicare population, fit the definition of complex and what percentage of those can afford to subscribe to a DPC practice? It looks like a niche market to me.
OK, thanks for your clarification. Suggest you revisit your original wording for next time — good business and good medicine can be synergistic, not a trade-off.
That said, I definitely prefer someone with your mindset as a personal physician. I think most patients would be more comforted knowing their doctor wakes up prioritizing the New England Journal over The Wall Street Journal.
Hello Barry, regarding your reference to Allan’s comment and “not seeing enough patients to hone skills,” please see my response to Allan’s comment. Also I trained in my family practice residency from 1994-1997, well before any of this regulatory crap started and when health insurance did not dictate health care. Heck, it was even before the first regulatory burden was born, the ’97 E & M coding and billing guidelines. As an attending in the late 90’s, early 2000’s, I was not required to see a patient every 7 minutes. I will say it did not retard any of my “skills.” They were then and are now “well-honed.” Are you a physician Barry?
Seeing a patient every 7 minutes is only honing the skill of a learning to take a shortened history and treat only one condition. Allen, I invite you to spend a day, a week in one of our DPC offices and see the level of complexity, chronic disease issues we are treating, diagnosing, managing in our offices. You imply that all we are seeing is the “walking healthy,” when in fact, a lot of the patients that are joining DPC offices have been lost in the system, are extremely complex and require a level of time and coordination of care that is virtually impossible in the current system. My medical students would frequently remark about the pathology and variety of disease states in my practice considering my panel size. An added benefit is that we help our patients save money, find affordable pricing for health services or provide some in our office with wholesale labs, meds, imaging arrangements by navigating the system. The current FFS is inefficient and limits primary care physicians from devoting the time and resources that a large percentage of DPC patients require. And it is not out of lack of want or desire on the FFS physicians’ part but a sad state of affairs in the currently encumbered, data-driven, lack of face-to-face time, bureaucratically-driven, hornet’s nest of a medical “system” that has given birth to an option called Direct Primary Care. Additionally, DPC may save the specialty of Primary Care…and yes, it is a specialty. There is no other specialty (excluding Pediatrics, Internal Medicine) that is a “jack of all trades.” I don’t know many Orthopedists, ENT’s, Oncologists, Surgeons who would want to give up their mastery and be a PCP “master of none.” DPC gives hope that more medical students will choose primary care.
Barry,
Quite frankly, you do NOT understand what I am saying but I gave it my best shot. Thanks for the conversation.
I agree, but more important is that the patient doctor relationship be maintained where both are free to chose each other and that both parties are free to contract with other agents to help them in their tasks.
Neucare,
First, I was on the institutional side of money management which means I was part of a team that managed a large, multi-billion dollar corporate pension fund with over 60,000 plan participants. We didn’t deal with individual clients.
With respect, to DPC, I think I understand what you’re trying to tell me, at least for the most part. It’s just that when I look back on my own experience as a patient, especially over the last 23 years when I had numerous surgical procedures and hospital stays and incurred probably $250-$300K of expenses at contract rates, I can’t identify any care that would have been either better or cheaper if I were a patient in a DPC practice. I can identify a number of times when I had a minor issue and it would have presumably been easier to get a same day appointment or reach the doctor on the phone to see what, if anything, I needed to do to resolve my complaint / issue but it didn’t cost me anything in terms of the ultimate health outcome in those instances.
What I value most in a primary care doctor and specialists like cardiologists and gastroenterologists are good diagnostic and communication skills and, hopefully, at least acceptable personal chemistry between us. I know that there are only a limited number of ways that our bodies can signal that something is wrong so there are numerous diseases and conditions that can manifest with similar symptoms. At the same time, I’ve read that there are patients out there with issues that are so complex that multiple specialists have been unable to figure out or resolve them. Some of these patients ultimately arrive at the NIH with literally binders full of test results from hospitals and doctors they have been treated by. The NIH’s success rate in accurately diagnosing those cases is only about 15%-20%.
I’ve also read that ER doctors claims to be able to figure out what’s wrong with a patient or at least what tests need to be ordered within about five minutes the vast majority of the time. That raises the question of how much time a primary care doctor needs to spend with a patient to accomplish the same thing.
If doctors want to form a DPC practice that’s fine and if patients want to contract with them and pay the subscription fee, that’s fine too. We probably don’t want doctors just out of training joining such practices though because, as Allan noted, they may not see enough patients to hone their skills and patients won’t have much confidence in them if they don’t have much experience yet.
As for managing patients with conditions like congestive heart failure, mental illness, diabetes, asthma and the like, it’s also possible that larger practices can invest in mid-levels like social workers to assess needs in the home and nurse case managers to check up on them and help them to navigate the healthcare system and to make periodic home visits. Good care management can indeed reduce ER visits among these patients but I think there is more than one way to effectively accomplish that.
Allan,
Sorry for the misunderstanding. I have seen your posts here enough to know that you are not for more regulations. I was just pointing out that whatever schemes the “powers that be” have for recruiting new doctors, they should not only include decent pay, but freedom from excessive paperwork burdens.
Micahel Chen, if a free market (that including a DPC choice) would require less physicians than DPC alone, then economically the country would be better off.
A physician ,especially when young ,that is only treating 10 patients a day is not getting enough exposure to different diseases and might have problems honing his skills. Time with the patient is important, but practice makes perfect.
Perry, I wasn’t calling of additional government regulations and mandates. I call for less, much less. I look towards a freer marketplace where the physician and patient can contract together in any fashion they choose while independently the patient can contract with his choice of insurer if he so desires.
Physician shortage: Who knows and what constitutes a physician shortage? Is there a physician shortage because there isn’t enough clinical time for the physician patient relationship or is it because the physician is too busy doing other things such as dealing with insuranc and the EHR? Is there not enough time because the physician is treating a code number instead of efficiently treating the patient? My guess is we probably have close to the number of physicians needed for top notch medical care for the entire population.
When I treated my chronically ill patients that were uninsured I spent less time per unit of service and had substantially less administrative costs. I treated an exceptionally ill population with multiple diseases on a large number of medications, but it wasn’t the treatment of those patients that occupied so much time and money, rather it was the system. I don’t know how many unnecessary consultations many of those patients had along with unnecessary testing based solely upon the fact that the insured patient was dealing with other people’s money.
I second Perry’s comment about the looming shortage; it’s inevitable and will be clear if and when DPC becomes more mainstream. Being that DPC works outside of the insurance, fee-for-service model and even if there was a single-payer, public-option situation where all patients are covered for catastrophic medical costs, DPC theoretically will continue to show cost reductions to the entire cost pool which encourage further adoption DPC model which will also increase the numbers of medical students interested in primary care, which is a reverse of the negative cycle of decline over the past 20 years due to FFS and neglect in primary care reimbursement.
Barry,
I probably won’t be able to convince you about the monumental difference in a PCP having 10-30 minute visits vs. 20-60 minutes, but let us think about your profession in “money management”. I am not sure your exact role in this, but my financial advisor helps clients make decisions about the finances (allocation of funds, savings, investments, taxes, etc.). How long did you “need” to provide good advice (asking questions, discussion, etc.). Do you think decisions and quality of advice would be the same spending 10 minutes vs. 30 vs. 60? What if the client’s books and financial house were a complete mess?
I honestly don’t know the answer to these questions because I am not a financial advisor. But I would presume if you were given “too little time”, decisions and advice would be rushed and sometimes create less positive outcomes for the client. You see, it’s really hard to put yourself in the shoes of a professional job you don’t understand. I fully appreciate every single person has been a patient (myself included), but I wouldn’t presume that everyone with money is capable of understanding the complexities of being a “money management” professional.
What people don’t realize about primary care is it ranging from the mundane to immensely complex from a technical standpoint. Each of these walk through my doors every day. I can phone calls at 8 pm with both as well. The psychosocial factors add another layer of difficulty in making good assessment and decisions. Those relationships are not always easy or quick to cultivate — even when I have 30-60 minutes visits when needed.
I don’t mean to sound defensive, but your list of “stop smoking, lose weight, drink less, exercise more, eat healthier food, etc.” is very telling and sadly many people’s understanding of PCP. Perhaps the larger problem we (PCPs) have is people’s understanding of the potential role of a primary care PHYSICIAN. The “specialization” of medicine has sadly made many PCP referral monkeys so I guess that perception is somewhat becoming true. While I recognize the importance of lifestyle matters on health, that is not the real value I provide. I manage hypertension, diabetes, coronary artery disease, asthma, depression, alcoholism, CHF, rheumatoid arthritis, lupus, chronic skin conditions, skin cancers, migraines, most broken bones, wounds and on and on. Even with all of this complex disease management, I still don’t think that is my most “valuable” role. Patients who have an undetermined problem (symptom, concern) are where primary care is most valuable. Of course, some of these issues will turn out to be benign, but the ability to make an accurate diagnosis from the beginning (testing, etc) hugely affects the events that follow. Our epidemic of overtesting, overtreatment, high use of specialists and ERs is because PCP are rushed and/or not truly accessible. We have tried to offset this demand by using urgent cares, retail clinics, and nurse-practitioners, but that creates a host of other problems.
I have some thoughts about how we could make the DPC model more available to everyone (including lower income, Medicare) but none of that will be relevant unless you first understand the value and role of truly high-quality primary care.
Allan,
There seems to be controversy right now whether there is or is not an immediate or looming physician shortage. My guess is that there will be limited numbers of physicians taking the DPC route due to a number of factors. As we can see above, the mass business model doesn’t seem to work so well, big surprise.
If in fact there is a looming shortage (which I believe there is) then we need to address that, and particularly in terms of Primary Care. More government regulations and mandates aren’t going to make PC more appealing.
Barry provided a satisfactory approximation of costs (below), but the conclusion that leaves is a need for catastrophic insurance that in an unencumbered government financed world is generally quite inexpensive. That is because the individual is paying directly for ***risk*** and doesn’t have all these other expenses loaded onto the premium. Unfortunately, too many advocating for catastrophic insurance want to load the risk up with unassociated costs and do not wish the patient or provider to have to deal with any significant risk.
My first concern regarding DPC is that the selection process can easily rear its head if the entire population were covered by DPC. Therefore, if DPC were just part of the coverage options in a competitive marketplace I would be happy that it existed. My second concern is the fact that many types of concierge medicine and DPC practices limit the patient population they treat. If there is a 600 maximum and if the usual physician carries 1,500-2,500 patients on his rolls then we have a physician shortage that I do not believe has to exist.
The final answer is intense competition where the patients make the ultimate decision of what type of treatment they get. Permitting the patient control over their destiny along with control over their risk will also lower their personal costs of many of the ancillary services if they choose to avail themselves of a competitive market.
Neucare,
First, to clarify my background, I am not a doctor and have never worked in the medical field. My career was in finance, specifically, the money management business. Second, I’m retired now and have been on Medicare for the last five plus years.
Regarding healthcare expenses, I think total spending per the NHE data is quite different from medical claims paid by insurers. Medical claims account for 80%-90% of premium revenue for most insurers with administrative costs and profit accounting for the rest. To the extent that DPC can reduce healthcare costs, it’s medical claims that matter to individuals, employers and taxpayers who are paying or subsidizing health insurance premiums. Health insurers don’t pay for public health initiatives, NIH research, hospital construction, dental care and numerous other things. They pay mainly for hospital based care, physician and clinical services and prescription drugs.
Since the experts tell us that chronic diseases and conditions account for 75%-80% of healthcare costs, including virtually all of my own claims, the question becomes how much can DPC move the healthcare cost needle downward as compared to traditional primary care? If you have a patient who needs to stop smoking, lose weight, drink less, exercise more, eat healthier food, etc., even if you have all day to talk to him about those issues, it will do no good if he doesn’t at least try to follow your advice. The same is true for filling prescriptions and then actually taking the drugs as prescribed.
I also keep hearing that there is a shortage of primary care doctors at least in some regions. If every primary care doctor tried to embrace the DPC model and limit his or her panel to 600 patients instead of 2,000 and see 10 patients per day on average instead of 25 or more, how will people access primary care when you are seeing your members for a half hour or more each when five or ten minutes might suffice in many cases?
With respect to my own drug costs, I don’t understand your point. The $1,000 figure I quoted is what I would pay if I were paying cash which is less than I am currently paying for my Part D insurance premium. The drug I get from Costco actually costs $35 for a 90 day supply, not $35 per month as I wrote in my previous comment. So that’s less than $12 per month.
I also wonder to what extent members of a DPC practice will call the doctor for every sniffle or cough to seek reassurance and try to “get their money’s worth” from their subscription fee when most such issues would likely resolve themselves in a reasonable time. If they don’t, the patient could seek medical attention then. On the other hand, if you’re in severe pain, bleeding, unconscious, etc., a trip to the ER is probably needed ASAP.
So, my conclusion is that DPC is probably better care than traditional primary care because access is quicker and available in more ways and patient visits will be less hurried. I have my doubts, however, about whether it will move the needle on overall healthcare system costs.
We spend more than other countries for numerous reasons from the fact that our doctors and nurses make more money than their counterparts in other countries to our medical specialty societies develop practice patterns that incorporate the reality of our litigious society which means more defensive medicine to our inclination to offer much more aggressive treatment at the end of life. Fraud is also a factor in the Medicare and Medicaid programs. I don’t think we could just import or copy the Swiss, German or Swedish model and expect to get the same results. Our culture is different. Our values are different. Our preferences are different. Our society is more diverse both racially and economically. We’re just different!
Union County, NC called, and they said you could pry their DPC out of their cold dead hand: https://youtu.be/pqmNHvhaPm8
Niran,
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Well-done, one more time!
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I would offer the following as a basis for the reduced cost of total healthcare associated with dedicated Primary Healthcare. It should offer the character of a Caring Relationship as follows: a variably asymmetric interaction occurring between two persons who share a ‘beneficent’ intent over time to enhance each other’s ‘autonomy’ by communicating with ‘warmth, non-critical acceptance, honesty and empathy.’ When a caring relationship is mutually sustained between each citizen and their physician-based team, as an attribute of Primary Healthcare, the resultant efficiency becomes increasingly self-sustaining.
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Another conceptual basis for augmented Primary Healthcare might begin by the application of the Power Law Distribution model. It means that a small number of users consume a large portion of the available resource, typically 30% of users consume 70% of the energy produced, 20% of users consume 25% of the energy produced, and 50% of users consume 5% of the energy. I am led to believe that healthcare is more powerfully shifted to 5% of citizens who cost 70% of national healthcare spending, 15% of citizens who cost 15%, 30% of citizens who cost 10% and 50% of citizens who cost 5%.
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The point of all this is that we focus our healthcare reform on the 16 million citizens who use 85% of our nation’s healthcare spending. We have a very poor recognition of the 304 million citizens who are at-risk for evolving, a step at a time, from between one category of healthcare spending to the next higher one. In fact, we communicate that we really don’t want to see them, no matter what, by charging them co-payments that discourage responsive accessibility. The Social Capital created by a ‘caring relationship’ committed style of Primary Healthcare is the best opportunity to build the level of stable HEALTH that could ameliorate the disruptive events affecting each person’s survival as a basis to eventually require healthcare.
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As an example, I can recall that about once every three to 5 years a woman would call at 8:00 AM in the morning, when we had just turned off our answering service link. The circumstances usually involved someone who was taking oral contraception and woke up during the night with shortness of breath and no apparent reason to have respiratory problems. The sequence usually resulted in an immediate 911 call, a trip to an ED and a spiral CT scan diagnosis of a pulmonary embolus. We always used an R.N. to answer the phone, and they would take the immediate steps to arrange safe and expedient travel to the nearest ED.
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The only true means to decrease the cost of healthcare for the 16 million citizens who each use, on average, 15 million in one year is to improve the stabilizing focus of their healthcare during the prior stages of increasing healthcare costs. There is absolutely no reason to believe that our current healthcare reform strategy can decrease our nation’s healthcare spending to 13% or less of our Gross Domestic Product. By the way, this decrease is the only GOAL that could eventually allow our nation to offer universal healthcare insurance to all citizens, WITHOUT a single payer and onerous rationing.
P.S.: The recent Rand report on health spending and chronic disease is not very useable. See the methodology appendix. The discounted 17.6% of the healthcare spending declared in all of the Federal spending reports.
1) Yes, defining “health care” can be tricky for total cost calculations. But how can you NOT count “hospital construction”, “insurance administration” or “healthcare R&D” (not sure what that means actually) as part of that!? If that isn’t part of the healthcare economy, what category does it belong?
Besides, I’m not really sure of the point of debating this. We spend WAY more than every other country.
2) Yes, super-utilizers are HUGE portion of costs. Do you know what helps keep those people out of the ER and hospital unnecessarily? . . . . great primary care.
3) Status quo primary care vs. DPC. I’m not sure of your background or experience, but if you believe the status quo primary care is “good enough” for the average American . . . . well, my perspective as a family physician who has experienced very imaginable setting of care is very different than yours.
Sure, standard PCP practices probably can manage many issues just as well as an “enhanced” PCP. Nobody needs more time or improved access to a PCP . . . .until they do.
4) PCP can’t change someones genetics, so you got me there.
5) Your costs. You do NOT just pay “$1,000 per year altogether while my copay is zero for five of them and I get the other one at Costco for $35 per month.” Somebody (employer or government) is subsidized a HUGE % of that cost. Make it $6, 8, or $10,000, the total cost of your “access” for those prices is many magnitude of what you see.
6) Managing risk and costs is not about guaranteeing a single person (Barry or Julie or Steve) that great primary care will always save them money or reduce costs over a lifetime. The same thing could be said for health insurance. All of this discussion is moving the needle with a sizable group of people with unpredictable (to a degree) health
Physicians working for for-profit companies underwritten by venture capitalists is grotesquely unethical and rife with conflicts of interest. No loss that these two organizations went belly-up.
CMS does a nice annual break down on health care spending. More detailed than your insurer estimates.
https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/downloads/highlights.pdf
1. “The issue is affordability”. Well, my clinic for a family of four would be just under $1700 a year. That’s the upfront cost. Subtract from that the difference between the real price of a test or medication versus the “insurance-negotiated” price. Patients are saving money by the hundreds each year with those. Subtract the cost of a specialist visit’s “insurance-negotiated price” now not needed because the DPC doc had the time to research, diagnose and treat the problem independently or via online consulting with specialists around the country. This is a benefit provided to my patients in their membership — saves many hundreds of dollars. It’s a service cost I can absorb because my billing overhead is close to zero. So let’s drop the net cost to the family down a lot because of these benefits (there are many others, including reduced need for urgent care visits). Who can afford that? I’m guessing it’s a vast majority. Funding community health clinics for the poverty stricken meets the remainder’s primary care needs. This just plain IS affordable to a majority of people who don’t seek care now because out of pocket “insurance-negotiated prices are ridiculous. Whether patients choose this is another matter. I do not have a cable TV subscription. That’s pretty much what the monthly fee is for my DPC for a family. Priorities.
2. Why are we physicians? I’m not one because I wanted to be an employed doc on a “team”, “coordinating care” for a “panel” of patients. I want to care for patients in an intimate way only possible with time availability. DPC works as a business and care model. Care is what is ultimately most important. DPC is most successful in the same way Primary Care outside of DPC is: small. If docs want to be docs they need to get out from under the government’s and insurers’ thumbs. I applaud Dr. Al-Agba for pointing out a truth that’s been brainwashed out us the past generation or two. There was never anything wrong with the small practice until “insurance” began to be the way doctors were paid. All of us in active DPC practices can show you everyday how “small” works. Contact any of us and see our practices in action.
“We (collectively, all sources) spend $10,000 per year per year on healthcare in America.”
This number probably comes from the National Health Expenditure Data. Unfortunately, it has very little to do with the cost of medical claims, health insurance premiums, or per capita spending by Medicare and Medicaid. This is because the NHE data includes lots of costs that are not included in most medical claims such as public health initiatives, healthcare R&D, hospital construction, long term custodial care in a skilled nursing facility, assisted living facility or home care, dental care, routine vision care, insurer administrative costs, etc. Custodial care is a significant cost for Medicaid but there isn’t anything that DPC practices can do to reduce that.
Medicare’s annual per capita spending is roundly $12,000 per person on average for its 57 million beneficiaries which are before deducting Part B and Part D premiums which are treated as offsetting receipts under government accounting. Average annual per capita spending by large self-funded employer health insurance plans ranges from $5,000 – $6,000 per covered life.
Any insurance expert will tell you that if you rank total medical claims by member in any given year, the most expensive 1% of members will account for 20%-22% of total claims. The most expensive 5% will account for 50% of claims and the most expensive 10% will account for 65% of claims. The least expensive 50% account for 3% of claims and even within the Medicare program, the healthiest 50% of seniors account for only 4% of total program costs in any given year. While these are not necessarily the same people from one year to the next, premiums are driven mainly by costs incurred by a very small percentage of the insured population.
Good primary care, whether via a DPC model or otherwise, can help people to live longer and healthier lives and that’s great. I question, however, whether it reduces LIFETIME healthcare costs. Once a patient gets cancer despite your great care and the patient doing everything right from a diet, exercise, weight and non-smoking standpoint, the disease will be expensive to treat. Ditto if they develop congestive heart failure, kidney failure or any number of other expensive conditions. As they age, it is increasingly likely they will get Alzheimer’s or dementia which kills slowly while the patient may need expensive custodial care for years.
I’ve had heart disease for the last 17 years despite never smoking, maintaining a normal weight, getting a reasonable amount of exercise, etc. It runs in my family so I drew an unfortunate genetic hand. I’ve had three expensive years and 14 relatively inexpensive years since 1999. I’m very happy with the primary care and specialty cardiology care that I get through traditional physician practices. I can easily afford to subscribe to a DPC practice but I haven’t felt the need to do so. I take six prescription drugs which cost less than $1,000 per year altogether while my copay is zero for five of them and I get the other one at Costco for $35 per month. While I’m sure some patients can benefit from a DPC practice, I suspect that traditional practices are perfectly fine for most patients, especially if they’re basically healthy.
While I emphasized a model of “care”, there is always some business sense required. I am constantly refining mine. The more traditional small giants of the business world did not always follow the same yellow brick road and neither do we. It is neither naïve or impossible to create a successful care model if it is personal, which is my larger point. Business does not always have to grow or be big to be successful. And in fact, I believe this is the single most critical point that health economists of the older generation do not seem to grasp. They believe more technology and depersonalization is the way to go yet can’t understand why it doesn’t follow all the “normal” rules.
I couldn’t add more than you already did except to say, I sewed up a dad recently and he paid cash as his deductible (with a company I am not in contract with) is over $20,000. The normal “ER” charge would have been all told about $2000 per stitch =$8k. My supplies were about $75-100 and it took me 15 minutes to sew the 4cm gash. Took the stitches out today and he was thrilled with a cash charge total of $250. Compared to 8K he might have paid out of pocket… care at a private office is a steal.
Could not agree with you more Dr. Aviles. Thank you for commenting!
“Many of my patients, including those with insurance, save more money on these ancillary services (versus traditional prices) than they pay for their membership each month. And they get unlimited visits with their personal physician without copays.” Indeed Dr. Neu. Today I had a patient who went for blood tests through his insurance and paid more than double of what he would have paid by utilizing my pricing list! And the list goes on.
You have a lot of presumptions about the rest of the system staying exactly as-is. DPC is attempting to solve the problems in primary care, but we all recognize that other systemic changes need to occur to scale DPC to become a widely adopted and “affordable” model of primary care.
1) Total costs.
We (collectively, all sources) spend $10,000 per year per year on healthcare in America. There is no doubt that there is enough money to fund quality primary care. The problem is we spend too little on PCP– currently 5-7%. No other country spends less than 10-15% on PCP service (resulting in 50-100% more PCPs as a total of physician workforce). So, trying to save money on costs of primary care — or saying that PCP can’t drive change because it’s such a small % of costs — is missing the fundamental problem that primary care is undervalued. If we appropriate fund primary care and public health, downstream costs will decrease over time. The goal should be reducing the need for hemodyalsis…….not making hemodylasis cheaper.
2) Affordability.
Indeed no ALL people cannot afford to “pay cash”. But, nobody is suggested that we should remove all government assistance.
First, it is our current mish-mash of public and private managed care — not DPC — that has inflated health care costs for all parties. Although employers and governments can (for now) subsidize absurdly high premiums for some individuals, having coverage doesn’t automatically equate to being able to afford care. For many of those with insurance plans, meeting out-of-pocket costs remains a big burden. I routinely see patients with insurance who tell me they avoided seeking primary care — often at their peril — for years because of high or uncertain out-of-pocket costs. I suspect hurried physicians, shielded by their billing departments, do not always hear these concerns from patients directly. It’s easy to overlook the unseen.
Some media outlets and critics of the DPC model have offered examples of docs charging higher “concierge” rates. In reality, there is a wide range of DPC “retainer” fees, with most being between $30 and $150 per member per month. Newer and quickly growing DPC practices typically charge prices at the lower end of that spectrum. My average membership fee is about $42 per member per month, and many families pay less than $30 per member per month.
Most DPC docs return that value to patients in a number of ways. Being membership-supported — and not needing to make a profit on ancillary services — we can offer drastic discounts on labs, diagnostic testing, medications, procedures and more. Just last week, I was able to provide nine doses of sumatriptan to a new patient for $8.12. She had previously been paying more than $100 per month through her insurance for the same amount of the drug.
I also recently managed a forearm fracture in an uninsured patient for a total cost of $45 ($10 for a splint, $25 for an X-ray, and $10 for cast a few days later). These patients certainly don’t think our membership fee is unaffordable.
Many of my patients, including those with insurance, save more money on these ancillary services (versus traditional prices) than they pay for their membership each month. And they get unlimited visits with their personal physician without copays.
With improving technology, scalable models and use of physician extenders, I believe DPC membership prices can and will continue to trend even lower. What level of DPC pricing would be low enough to deem it universally affordable? I rarely hear critics give an acceptable dollar figure. I recognize some people may struggle to afford even $10 per month, but does this sad reality invalidate the entire concept (business model) of DPC?
Many critics often jump to the conclusion that direct payment models are proposing abolishment of all forms of government assistance for health care. This certainly does not need to be the case. We could assist people of lower income in different ways that micro-managed care. Do you think food stamp programs (EBT cards) are a better form of assistance than government run soup kitchens or delivery of “cheese”?
“If employers were to pick up the cost of DPC subscription fees, their healthcare spending would likely rise as the majority of employees are healthy and generate little or no healthcare expenses in any given year” – where is the evidence that the majority of employees are healthy and generate little to no healthcare expenses in any given year? This is where our DPC model is trying to show and is showing improvements in out-of-pocket expenses by the employer and patient. In the current trend of high-deductible health insurance (which is the preferred insurance type that is coupled with an employer paying DPC membership fees to show out-of-pocket cost reduction) we’re showing that even modest short term improvements can lead to larger long-term prevention and health care costs in the realm of coronary artery disease, stroke, and colon/breast/cervical cancer by limiting unnecessary and costly urgent care and ER visits since our ability to be accessible to patients (via phone visits, secure portal messing, video visits, etc) is significantly higher than traditional payment models for primary care.
Passion for medicine, adequate medical knowledge and time for meaningful conversations are some of the things Direct Primary Care docs bring to the table in our relationship with the patient (and not with the insurance company). Expanding the differential diagnosis by incorporating possibilities not thought of in a 5 minutes encounter with the patient, treating conditions in our offices -when feasible, therefore reducing specialist care (without hurting our patients), saving patients from unnecessary ER visits by being accessible after hours, among many others (I am pretty sure some of my DPC colleagues will comment on statistics, studies, percentages) are part of why DPC is not dead. Patients long for one on one care, a real relationship with the doctor and we as physicians do too. I will not talk about physician burnout nor suicide rate, a related but not the point of this well written article. We must be in charge again of the doctor-patient encounter and relationship. Insurance policies do not provide medicine, physicians and clinicians do and we must be the foundation of it all.. And Direct Primary Care is providing that platform from which we, physicians, can finally embrace and enjoy the practice of medicine one more time, and as a result patients will get sound and personable medical care. Thanks Dr. Al-Agba for this outstanding article.
Respectfully submitted,
Dr. Aviles
I don’t have any argument with the potential for direct primary care to provide excellent patient-centered care. There are two issues that I think need clarification and discussion, however.
First, assume a monthly DPC subscription fee of between $50-$75 for each adult and perhaps $20 per month less than that for each child. That implies that the cost would be in the range of $2,000-$3,000 per year for a family of four. I wonder what percentage of the population could afford to pay that.
Second, suppose it were possible to buy a health insurance policy that did not cover primary care within 100 miles of home because a DPC practice and subscription fee covered those needs and expenses. Assuming a minimum deductible sufficient to qualify for a Health Savings Account, what would the premium be as compared to a regular health insurance plan that did cover primary care? Insurers told me in the past that their actual medical claims break down into three buckets as follows: (1) 40% for hospital based care, both inpatient and outpatient combined with ER visits and inpatient stays under observation status counting as outpatient care, (2) 40% for physician fees and clinical services including labs, physical therapy, etc., and (3) 20% for prescription drugs. Insurer administrative costs and profit are separate issues.
Since only 30% of physicians in the U.S. are primary care doctors and the fees they generate for work done in their offices are significantly lower than the fees specialists generate, it’s quite likely that primary care doctors may account for only 15%-20% of costs within the second bucket listed above. That suggests that the insurance premium for a policy that didn’t cover primary care within 100 miles of home would not be materially less expensive than the premium for a traditional plan that did cover such care.
So, the issue around DPC isn’t quality of care. It’s affordability for the majority of patients. If employers were to pick up the cost of DPC subscription fees, their healthcare spending would likely rise as the majority of employees are healthy and generate little or no healthcare expenses in any given year. That would further inhibit their ability to raise wages as much as they might like to. Ah, it seems everything in life involves tradeoffs as we seek to reach the optimum point along the parabolic curve.
You can’t create a successful care model in the absence of a successful business model.
I’d like to add a DPC group that is built around 1 physician-1 MA with the aim of a small footprint, low overhead location that has multiple locations nationwide. Paladina Health, while not as visible as Iora or Qlliance, has been around since 2010 and they have been targeting medium sized businesses or government entities where they cover the membership fees for their employees and dependents to show in an evidence based way that what we do in a DPC model provides short and long-term value to a patient’s well being as well as health care costs. Disclaimer: I’m a practicing family physician for Paladina Health in Vancouver, WA.