“… there remains a sufficient amount of execution risk,” Miller says, CEO of Denver-based Paladina Health ~Healthcare DIVE

By | January 26, 2016

With direct primary care (DPC) experiencing a boom since the Affordable Care Act, a growing number of practices are experimenting with the model and its potential to go mainstream.

As the Direct Primary Care Coalition recently told Kaiser Health News, the number of DPC practices has gone from under 20 to over 400 since 2010. The model is similar to that of concierge care, in which patients pay a set monthly fee for access to a physician, but it aims to cut out health insurance and serve a broad market. On the other side of the coin, concierge care often bills insurance for medical visits in addition to collecting its subscription fee, and often positions as high-end.

Fans of DPC say it allows patients and physicians to focus on care and bypass traditional insurance, aside from customers carrying a high-deductible plan for specialists or emergencies.

While DPC is entrenched as a niche, the big question is how far the trend will go and whether the ACA could hobble it as much as it helped it.

“While the growth in DPC will undoubtedly continue, it faces several significant headwinds which will inhibit widespread adoption,” suggests Eric Helman, chief strategy officer at Hodges Mace. He says two of those can be traced back to the ACA, which already requires health insurers to provide “free” preventive care and a maximum out-of-pocket limit.

“Finally, the regulators and policy wonks are extremely concerned about creating a two-tiered healthcare delivery system for the haves and the have-nots,” Helman argues. “DPC has a place to quietly serve the minority but I fear if it grows too rapidly, it will be crushed by the forces deeply invested in the third party payer system.”

Some practitioners in the field are more cautiously optimistic.

Chris Miller, CEO of Denver-based Paladina Health, a direct primary care provider and subsidiary of DaVita HealthCare Partners, suggests there is sufficient demand in the marketplace for DPC and it’s gaining momentum, but that it remains a difficult business.

“DPC is no longer a new concept, but there remains a sufficient amount of execution risk,” Miller says. “Strong players have exited the market, mostly due to business models that haven’t worked and the lack of barriers to entry.”

He says Paladina is confident they’ve crossed the demand threshold via employer groups seeking out Paladina Health directly for service. “Employer groups are placing less emphasis on the cost savings piece and more on the value creation component for their employees,” Miller adds, noting many are using Paladina Health as a recruitment and retention tool.

From the provider standpoint, Miller says DPC at Paladina Health provides physicians the kind of experience many were aiming for when they entered medicine: One that supports time with patients and a real patient/provider relationship. On top of that, they appreciate the focus on prevention and wellness, the lack of insurance billing, and fair compensation.

Amy Walsh, a family physician operating a DPC practice in Raleigh, North Carolina, echoes similar sentiments, with an additional dose of enthusiasm.

subscription medicine“I’ll tell you quite honestly, opening a DPC practice has been the best decision of my career. No doubts,” Walsh says. “DPC is attractive to docs because it frees them up from the red tape and hassles of the insurance hamster wheel and allows them to really practice the medicine they were trained to do. Add that to the idea of ‘hanging your own shingle’ and it makes for some pretty happy physicians.”

She adds providing a high level of accessibility to patients–unlimited office visits and 24/7 communication—has not been a difficulty. “When all of a patient’s concerns are fully addressed at the visit, rarely do you get any after-hour phone calls,” she says. Almost all her patient visits are 30 to 60 minutes long.

Walsh says her customer base ranges from patients who came because they couldn’t afford insurance, to those who came to her from higher-end concierge care practices.

As far as profitability, “When done right, DPC docs make at least as much as employed primary care docs. Many make even more,” Walsh says, adding she is seeing a “huge growing demand” in the number of patients seeking out DPC practices.

“Patients want a doc who listens to them, who has time for them, who can charge them a fair fee they can understand. DPC does all that,” she says.

Her advice to incomers includes keeping overhead low and being willing to market yourself in ways that are out of the ordinary. “Doctors should take medicine back,” Walsh argues. “Make healthcare something that is between a doc and a patient. Then you will have value-based medicine.”


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