Pay $50 a month, visit whenever I want, maybe throw in an extra few bucks once in a while whenever I want some extra attention. The model works for my gym membership. Why not primary care?
The concept of concierge medicine — where a patient pays a membership fee for unfettered access to their primary care physician, sometimes completely avoiding health insurance — is nothing new. But the model has gotten increased interest in recent years, thanks to a number of factors in the market, says Thomas Charland, founder and CEO of Merchant Medicine, a research and consulting firm focused on walk-in medicine. Those include employers looking to bend the cost curve, state governments easing rules so such programs aren't seen as insurance, and explicit mentions of concierge medicine in the Affordable Care Act as qualifying for state-based insurance exchanges, Charland wrote in an August newsletter.
Dubbed "direct primary care," the model is starting to catch fire and gets used by some big names in the industry, such as Davita Healthcare Partners. With large health systems buddying up with retail clinic operators, as I explored in one of my recent blogs, DPC offers smaller hospitals and networks the chance to offer their patients the same convenience, Charland told me in a recent interview.
"The whole primary care world is going to be, I think over the next five years, turned upside down," he says. "Retail clinics, there are a lot of hybrid urgent care-primary care models, where you can just walk in, and we'll take care of you. I think the small hospitals are really going to struggle if they can't get their physician groups in line."
It might not seem as if a doc could make money charging $50 a month and give patients open access. But in his newsletter, "The ConvUrgentCare Report," Charland points to previous studies that show the numbers adding up. The average physician in a DPC model works about 40 hours a week, spends 75 percent of his or her time on patient visits, and could tackle about 3,120 30-minute visits a year. Using the conservative estimate of five visits per patient per year, a doc could generate annual revenue of about $374,400.
Iora Health, in Cambridge, Mass., is one practice that's attempting to turn primary care upside down. They're running a DPC practice at Dartmouth College with an insurance wraparound from Cigna that some 1,200 out of 8,100 faculty are taking advantage of, Charland points out. Having that wrap allows the DPC service to qualify for the state health insurance exchange, and "would likely meet the bronze requirements for a business with 50 or more employees," he explains.
I spoke with the cofounder of Iora at a conference last year, and he was adamant that primary care as-is needs to be blown up, starting with moving away from a model that pays doctors per sick visit.
"The current model of primary care doesn't work very well," Rushika Fernandopulle, M.D., CEO of Iora, said at the time. "I think the experience of care is awful, to be quite honest. We wait too long, care is fragmented, the way we are treated by primary care practices we would never tolerate in any other industry, and I think the outcomes for primary care are actually poor in general."
Fernandopulle also points out that, while primary care itself isn't expensive, poor practice of it leads to higher costs down the line with unnecessary tests and readmissions and misuse of the emergency department. In his piece, too, Charland writes that, while DPC causes a spike in primary care costs initially, the extra access to a doctor eventually leads to cost declines because of reduced spending on specialty care, prescription drugs and the ED.
Expanding the use of DPC is not without its obstacles. Only Oregon, Utah and Washington have specific legislation saying that DPC practices aren't insurance offerings, while the remaining states have stayed "silent" on the issue, Charland says. Plus the market for such a model — typically individuals who don't have insurance or self-insured employers — is still small, but growing. Either way, Charland sees DPC as a potential "disruptor" in the industry, one that hospitals and health systems that own practices can either see as an opportunity, or a threat.
The direct primary care model is also not without its detractors. By its nature, DPC excludes Medicare and Medicaid patients, and up-front payments exclude certain patients.
Has your organization dabbled in direct primary care? Share your experiences in the comment section below, and watch for more from my interview with Thomas Charland in the October issue of H&HN.