This article is a section of a longer paper on Direct Primary Care (DPC) that was introduced in an earlier piece -- Health Plan Rorschach Test: Direct Primary Care. The following excerpt from that article briefly explains DPC if it's a new concept. Click through the previous link for additional context.
Despite its inclusion in Obamacare, Direct Primary Care (DPC, aka Concierge Medicine for the Masses), it's surprising how few health insurance executives know about DPC. DPC is a model of paying for primary care outside of insurance. The individual or organization paying for healthcare pays a monthly fee (like a gym membership) for all primary care needs. Generally, DPC providers say they can address 80 or more of the top 100 most common diagnoses.
[Contact me via LinkedIn if you'd like a copy of the full seminal study on the Direct Primary Care model - excerpts will be published on Forbes]
DPC and the Healthcare Delivery System
Though DPC practitioners are quick to point out they don't want any "gatekeeper" role or financial incentives that drive referrals to outside health professionals, they do help their patients make informed decisions regarding other healthcare services. While they reduce the need to refer out, there are still many instances where a referral is necessary. DPC practitioners assert that because they have smaller panel sizes, they are able to spend time to coordinate care with other providers and describe this as a core part of their value proposition. This was confirmed in interviews with patients of DPC practices. This contrasts sharply with the volume-oriented metrics the insurance-based primary care physician is often subject to where they don't have the "luxury" to follow-up with referral recipients. In a typical multi-specialty practice, primary care is a loss leader like milk is for a grocery store. In insurance-based medicine, a primary care provider typically refers out millions of value every year to specialists, imaging centers and laboratories.
Dr. Garrison Bliss believes this is a root cause of healthcare inflation. “This makes primary care physicians valuable to hospital and multispecialty care groups, not because they can reduce costs, but because they can increase them.” DPC practitioners interviewed for this report indicate that one of the reasons for the persistence of the sub 10-minute office visit and the 3,000 patient primary care panel is that overwhelmed primary care physicians can be counted upon to refer more and do less themselves.
Commonly asked questions about how DPC practices work with the rest of the healthcare delivery system
How does referral to specialists work, especially in terms of chronic care? Here’s how Iora Health’s Dr. Rushika Fernandopulle described it: “We tend to make many fewer referrals than typical practices and handle the vast majority of chronic care management ourselves. We have a small group of specialists who have agreed to work with us in a more collaborative way including MD-MD phone, video and email consults, and real time specialist-PCP discussions while patients are being seen.”
What happens when a patient is hospitalized? Fernandopulle stated, “Similarly we co-manage our patients in the hospital with a small group of hospitalists. We try to see all our patients in the hospital at least once, and discuss the cases with the hospitalist daily. We also expect email or phone communication the same day as discharge.”
To what extent do DPCs serve the same role as medical homes; in what ways do they differ? Fernandopulle: “We, like most other DPCs, follow many of the principles of the medical home, and indeed would score highly if we chose to get certified. We have not chosen to go that route now because we think it is a distraction. We are designing our practices to best serve our patients, period. The medical home criteria like all others like it are designed by committees with the usual baggage that comes from such a process. If we happen to meet the criteria, then they have gotten them right. The criteria are very structural -- do you have a policy to do this or that. With the right sort of policy tweaks one can become a level 3 medical home without really changing much about how care is delivered (and of course many are playing this game). When you walk into a good practice that is trying to really take care of patients, you can feel it -- the whole is much more than the sum of its parts.”
Generally speaking, the way DPC practices interact with the rest of the healthcare delivery system is no different than other primary care practices. The following are the unique facets of how some DPC practices work with the rest of the delivery system:
- A large chunk of DPC practices serve patients who are uninsured and/or have very high deductibles and pay cash for all but the most catastrophic items. Consequently, formally or informally, most DPC practices offer a wide array of cash pricing for imaging, colonoscopy, sleep apnea evaluation, labs, meds at discounted prices negotiated by the DPC organization with outside providers. Several of the DPC companies note that they are able to get 85-90% discounts off of what one would pay if you weren’t in a pre-negotiated arrangement for items such as MRIs for making immediate cash payment. For those other organizations, they calculate what they actually make after insurance discounts, billing and collection costs. As an alternative to that hassle, they give a massive discount for immediate cash payment. While some items are exactly the same service, DPC providers also provide alternative recommendations. For example, Qliance shared how a typical sleep apnea evaluation study in a hospital can run $3,000. However, there are home studies that they argue are more effective. The price the provider offered for the home test is $70, a 98% savings over the alternative. The founder of WhiteGlove Health, shared one of his experiences. “I had an ear infection that was causing me to be very dizzy and nauseous while traveling in Massachusetts. So, I went to the Mass General ER and the bill was many $1,000s and they never looked into my ear, but instead, they performed lots of other expensive procedures. The next day when I got home, I called WhiteGlove and medical care was brought to me at my home within 2 hours and $35 later (and no other expenses to my health plan), where they diagnosed me with an ear infection and handed me the generic Rx meds I needed.”
- Palmetto Proactive Healthcare in Spartanburg, SC has had the local hospital refer discharged patients to them. Often these are patients who cannot get into their primary care physician (PCP) in a timely manner or those without a PCP. In order to avoid hospital readmission penalties, paying the modest visit or monthly fee is great "insurance" to ensure the patients aren't readmitted. After the patients get the experience of the DPC model, many take over the monthly fee.
- One of the most unique DPC practice models is WhiteGlove Health. Thus far, they operate in Arizona, Kansas, Massachusetts, Missouri, Tennessee, and Texas. They serve the employees and dependents of fully insured companies as well self-insured employers such as Highgate Hotels, Ivie & Associates, The Beryl Companies and provide in-person care via nurse practitioners who go to the home or workplace. They have a single, flat visit fee of $35 (all inclusive) and a number of different membership classes and associated fixed fees. The employer, consumer, and in some limited cases, the insurance company pays the membership fees. The patient or member pays the $35. And when care is needed, their mobile and telephonic provider network provides medical care, including diagnostics and generic Rx meds (at time of visit, as allowed by law) and does not use the rest of the delivery system unless the medical needs are outside their scope and then they refer out like any other primary care provider.
DPC Dramatically Reduces Downstream Utilization
