Direct primary care: three key consequences of dropping payers

There’s a great deal of misunderstanding and even misinformation about direct primary care (DPC). It is often confused with higher cost “concierge” or “boutique” practices, and hence is seen as elitist, unaffordable, and consequently something that has only a future as a niche version of care. 

So let me clarify things by once again stating what DPC is:

• Primary care that excludes third-party payments. No money is accepted from insurance companies or other third-party payers. Payment comes either from the patient or by an employer who offers the care to its employees.
• Payments are made on a monthly, quarterly, or yearly basis, with that charge usually being under $100 per patient per month (generally in the $50 per month range). Some offices charge a small copay for office visits, but most do not.

In my office, we charge between $35 and $70 per month, depending on age. There are no charges for office visits.

Both of these differences are a huge departure from the status quo of medicine, and both have a huge effect on the quality and cost of the care given. All of those effects would be too much to explain in depth in a single article, so this month I will focus on the implications of direct patient payment, and next month will discuss the monthly payment.

Before moving on, let me address a common misconception: DPC is not meant to replace insurance, nor does the model in any way encourage patients to drop their insurance. People need a way to pay for the high-cost areas of care, such as surgery and hospitalizations. DPC doesn’t try to address paying those costs, but instead focuses on decreasing their need by focusing on health and prevention. While that may sound like typical preventive medicine jargon, it really is in the best interest of the DPC practice to keep patients healthy and reduce the need for catastrophic care.

Using automobile insurance as a parallel, health insurance has done the equivalent of paying for oil changes, tires, and other car repairs in addition to covering collision and liability. But the consumer is already motivated to do those things and will pay out of pocket to maintain their car so as to avoid needing to use their auto insurance at all. Additionally, paying for tires, oil changes, etc., allows these things to have artificially set prices which are unreasonably high (since it’s covered by insurance) and so the cost of routine maintenance goes up.

So, what are the implications of rejecting insurance payment?

There is an increased focus on reducing the cost of care.

My patients are paying me, so I am very conscious of trying to give them their money’s worth. If I can give them value (a concept that has become foreign to healthcare), patients are happy with my care and will continue to stay in my practice. It’s in my business’ best interest to do this, so we do a number of things to save patients’ money:

• We offer very low-cost lab testing (using “client billing”), saving people 75 percent or more on labs.
• We dispense medications in the office (legal in most states), also saving people 75 percent or more, and offering a huge convenience to the patient.
• We find the lowest cost for procedures, X-rays, and specialist services. While many of these are covered by insurance, most people have higher deductibles, so the lower cash prices are very valuable to them (not to mention the value to the uninsured). 

None of these give significant direct income to the practice, but they all make patients much more reluctant to leave. In truth, these things end up being our biggest marketing tool, as patients frequently brag to friends and family about their doctor “who saves me money.”

The result of this work has had three key benefits:

There is an increased focus on customer service.

It is fairly easy to exceed expectations in the area of customer service, as people have an increasingly low expectation for the service they get at the doctor’s office. It’s normal to have to wait an hour or more to be seen, and then get only a few minutes of the doctor’s time (if a doctor is seen at all). This results in, at best, frustration. At worst, people avoid care they should be getting.

In our practice, the patient has a much different experience:

• Patients seldom have to wait more than 10 minutes to be seen.
• Appointments are, on average, 30 minutes per patient.
• Most days begin with multiple slots open for same-day urgent visits.
• Care is often done via text message or phone, reducing the need for coming to the office at all.

Much of these changes hinge on the use of monthly payment for care (eliminating the economic motivation for unnecessary care). But a premium is placed on patient experience in the office, and again this is done because it’s in the best interest of the business. 

Patient records are freed from the coding nightmare.

I remember asking myself: “What would medical records look like if their only purpose was patient care?” This was a radical question at the time, as records have long become the domain of a ridiculously complex payment system that requires submission of data and over-documentation to justify billing codes. It was hard to imagine not having to think about evaluation and management codes, Meaningful Use or the Medicare Quality Payment Program, or other “pay-for-performance” factors when charting. But that is what happens when insurance is eliminated. I now document for care, leaving out parts of the note (what I refer to as “computer vomit”) that get in the way of patient care.

I am daily reminded of the depth of this change, as I get records from specialists, previous primary care physicians, and hospitalizations. Most heath records hide important clinical information in an avalanche of insurance documentation compliance.

Patients trust their doctor more.

This may be a subjective one, but it is very important. Patients are increasingly suspicious of the motivations of their physicians, wondering if the care they get is focused on them or if it is done for increasing revenue or following insurance company rules. They question the doctor’s motivation when that doctor is financially rewarded for increasing the cost of care. The dichotomy between the needs of the patient and the business interests of the practice sows mistrust and undermines the doctor-patient relationship. 

My patients don’t have to question this. I am rewarded for minimizing the cost of care, for getting them healthy, and for helping avoid unnecessary cost. So, I am not questioned nearly as much when I don’t prescribe an antibiotic or when I recommend physical therapy instead of pain medication. People know I am on their side because they pay me to do so. 

Overall, this has resulted in a much better relationship with my patients, has increased my satisfaction in practicing medicine, and has improved the quality of care I can give.

Rob Lamberts, MD, is a board-certified internist and pediatrician who runs Dr. Rob Lamberts, LLC, a direct primary care practice in Augusta, Ga. He also recently gave a TED talk on the DPC model. Have questions about DPC? Email medec@ubm.com.