Blogging at dinoramzi.com I have been involved in medical education, practice management and the medical care of the underserved all my career. My passion is quality improvement in clinical processes, care delivery and finally in outcomes. Primary Care improves the health of populations better than any other branch of heath care.
Direct Primary Care (DPC) is an emerging model for funding independent primary care. In the early phases of any product cycle, there is a lot of variation of how the product’s features are presented to the public and it remains a truism that “once you’ve seen one DPC practice, all you’ve seen is one DPC practice.” Several companies have been trying to package DPC into a product that can be sold across large metropolitan areas, across multiple states and even nationally. But for some within the DPC industry, this goes against some of the core principles that pushed the development of DPC.
DPC is a specific set of services paid for on a monthly basis and, as such, resembles capitation (without the risk implicit in a capitated insurance model), concierge (without the unnecessary luxury offerings) and gym memberships. One of the important motivations underlying the development of DPC is the disintermediation of services from an insurance middle man, thereby making it a direct contract for services between a patient and physician. The most spectacular effect of this disintermediation is the remarkable reduction in office overhead and the amount of time freed up for direct patient care. Recall the recent JAMA article that indicated most primary care physicians spend 2/3 of their time on administrative functions, including charting.
ADDITIONAL DPC JOURNAL INSIGHT into EMPLOYER Partnerships and DPC, the impact of Retail Healthcare/Employer Partnerships and more.As primary care is important to the health of the public and DPC appears to the best extant model for achieving improvements to the US primary care infrastructure, it is imperative to convert as many lives as possible to DPC as quickly as feasible without damaging the brand. Our current health care system is funded predominantly through government and private sector employers. Medicare, Medicaid, military and public employees reflect about 50% of the national health spend. Whatever the outcome of the significant revision to the healthcare landscape under President Trump and Republican trifecta in Washington DC, the need to control health costs will continue to drive health reform. DPC is a niche product that appeals predominantly to individuals of a certain income, to the under-insured (e.g. high deductible exchange policy) and to opponents of the ACA. DPC as a mass-market product will require intermediaries, regardless of distribution and promotion channels.
The DPC community should expect to reach a tipping point and take primary care entirely out of insurance, effecting a complete disintermediation from insurance. But the path to that goal is not clear.
Much of the DPC world prefers to grow slowly, cautiously staying stay peripheral to the rest of the healthcare infrastructure. There is a fear that any intermediary will begin to make unreasonable demands, such as meaningful use checkboxes and wasted time doing prior authorizations. After all, much of the health care system has relied on the labor of the primary care at a discount for collecting reams of data.
In the US 5 – 6 % of the health care dollar is spent on primary care, yet provides 56% of the services. In most countries with efficient health systems, primary care accounts for larger proportions of both services rendered and dollars transferred. That means that more than 50% of the data collection falls on primary care interactions, when the efficiencies created by primary care mandates that doctors’ attention be placed elsewhere. Decades of reimbursement distortions through the CPT system that systematically discriminates against cognitive work over procedures, other administrative distractions, data collection that is not relevant to our specific communities and the burden of prior authorizations for prescriptions, but also consultations, imaging and oftentimes other procedures as well. All this labor is done by primary care, essentially on a pro bono basis, as the cost of doing business.
Avoiding this unproductive, unreimbursed and barren burden is an important motivator and rightly or wrongly has been ascribed to insurance by the DPC world, making it unreasonably averse to any intermediary.
Recently companies like Liberty Direct have promoted a network of DPC practices, with payments channeled through Hint Health (which offers payment and membership management for DPC.) There has been criticism in some online fora that criticizes such arrangements as a substitution for an insurance company. Dr. Josh Umbehr states that “the people who control the purse-strings make the rules.” He frequently declares that a core principle of DPC is that the accountability of the provider is directly to the patient and not an insurance company. The recent collapse of the Liberty-Hint service adds fuel to the fire that intermediaries are detrimental to DPC.
One of the main features attracting practitioners to DPC is the lack of regulation and oversight in patient care. Regarding the insistence of data collection, Julie Gunther, MD, FAAFP states “people are not algorithms, nor is their care. What we do defies data collection and to attempt to distill primary care to such is a gross undermining of the profound work physicians do.” Rob Lamberts is leery of arrangements like those between Liberty Direct and Hint, primary because the goal of DPC is not to hand the purse-strings to a different intermediary. The idea is to preserve our independence from middle-men.
However, we have also seen how the road to a successful DPC practice is littered with the carcasses and failures of others. DPC seems to have grown from about 100 or so providers at the time of the first DPC Summit in St Louis in 2013 to the thousands today. Many observers point to the fact that the most common difficulties in starting a DPC practice relate to the difficulties of marketing the concept to individuals and to the employer market. As such, overly optimistic revenue estimates based on a rapid growth and low levels of capitalization seem to be the proximate cause of most DPC failures.
In contrast, my practice ramped to over 500 patients in less than 6 weeks. The trade-off was using one of the emerging intermediaries. MedLion is a company developing as a sort of franchise DPC practice network but may be growing more slowly than predicted and many of its practices are hybrids who have not yet seen any DPC patients. Action Direct is a distributed network with affiliate clinics across the country. Other networks like R-health and Iora are investor-supported and promise to morph into yet another flavor of DPC. EverMed is the network I have used (Full disclosure: I am also a principal in EverMedDPC.)
The options for starting DPC practices include starting from scratch, converting and introducing the model as a hybrid. In any of these situations, the slow ramp-up impairs the uptake of DPC and discourages the deconsolidation of primary care from their hospital and multi-specialty masters. Effective sales and marketing networks networks like EverMedDPC, Nextera, MedLion and others allow the growth of DPC as the preferred method of financing and delivering primary care to those who need it the most.
There are many companies that have grown in support of DPC. EMR’s like Atlas, Oak Software for membership management, and even AndaMeds for prescription medication support. While not all of these are intermediaries in the sense that some in the DPC industry fear, they remain enabling intermediaries, delivering significant value for the services they provide. As long as they deliver a degree of value that keeps DPC practices happy, they will continue to do well. DPC networks can and should be viewed as sales and marketing contractors.
DPC practices can do a lot of good business using local economic ecosystems, such as Chambers of Commerce, but the public health imperative depends on capturing the majority of individuals who are covered through their jobs. There is a complex ecosystem of brokers, benefits managers and financial advisors that make recommendations to employers and it is difficult to penetrate this world without some understanding of the culture and relationships in each market. A company that effectively negotiates the world of benefits management and drives patients to DPC practices will dramatically improve the health of Americans and bolster the entire system. Benefiting our own patients may be sufficient for some DPC providers, but millions can be helped once employers and policy makers see the value of what we are doing. IS there a more efficient way to scale DPC while we wait for the government’s imprimatur?
“Qliance pivots toward employers in a post-ACA health insurance market. PLUS, DPC “C-Suite” Weigh-In.
Although the niche players appear to be pushing back more strongly of late, there is also room for compromise. Dr. Jeff Gold suggested to me privately that he might consider a compromise in data reporting. “”I agree we need to compromise and work with government and insurers. We just don’t want to work for them and at be able to have a say in their demands.” Dr. Florin Selaru in Columbia, MD agrees that there has to be some accountability in order to drive more employer money to primary care. QLiance worked out a compromise to provide notes and quality data to Medicaid managed care, but allow others to do the coding. Disintermediation without accountability is simply not going to be an option.
Even as networks grow the DPC market, DPC can simultaneously remain a niche product. Providers will simply have more choice regarding which patients and contracts to accept. Keep in mind that employed populations tend to use the health system less than others. The niche players will survive, grow slowly and organically from here on. However, to entice physicians out of their miserable burn-out inducing lives in the larger health systems where they are employed, we need a more reliable source of patients to jump-start their practices.
Sometimes, the objections of the current niche players seem to be reactive and bred of fear, perhaps well-justified given the history of the health system conspiring to hurt them. Caution is appropriate as models evolve and the data needs of the benefits stakeholders becomes clearer. Nobody knows how accountability for DPC practices will look like once an employer is indirectly funding DPC. In effect, we have a form of “sponsored DPC” that will emerge from the way the system is structured and adapt in part to the system we want to see. Moreover, nobody forces any individual to accept arrangements as Liberty Health Share has proposed. Exercising our “no” individually is the better way of effecting large scale change than making a blanket declaration against all intermediaries.
To my “niche” colleagues I remind them that it is always OK for an individual provider to say no, when a broker, employer or other stakeholder makes demands we consider unreasonable. But know that the compromises we make now will give us the leverage to take our profession back.
DPC as a niche product and DPC marketed by intermediaries can co-exist. This is not a chicken and the egg problem. It is the difference between riding a unicycle and a racing bicycle with two wheels. The innovation has happened when small practices were allowed to experiment in a safe and protected environment. Now the growth has to occur by intermediaries that know how to escalate the movement exponentially. DPC must evolve, but I am convinced that the niche practices will be able to protect their world.
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