Monthly Archives: December 2014

The Time Has Come For Direct Primary Care

Direct primary care, in which physicians are paid a subscription fee directly by their patients, is so self-evidently better than the present, insurance-driven system that one has to ask why it has not been popular before now.  The answer lies in the changes that have occurred in health insurance in the last decade or so.

There was a time when most health insurance coverage came with only a small deductible, which is the amount of money a patient has to spend on his health care each year before his insurance started paying the bills.  Some health insurance plans had no deductible at all.  For patients with insurance that pays almost all of their medical expenses, direct primary care has little to offer, a subscription to a physician’s practice would be an additional expense the patient doesn’t need to access routine care.  Concierge practices have for some time been serving insured patients by offering a higher standard of service in exchange for a subscription fee,  but they have not gained a lot of market share to date.  Most patients were satisfied with the care they were getting as long as they weren’t paying much out of pocket for it.

Health insurance with low deductibles has increasingly been too expensive for patients or their employers to afford.  Most of the health care plans offered these days by employers, and those privately purchased under the Affordable Care Act, are high deductible plans requiring patients to pay thousands of dollars for their health care before their insurance company writes a single check.  In fact, most patients go through every year without drawing any money at all from their health insurance.  The insurance companies negotiate prices for their customers, and impose mountains of paperwork and restrictions on their behalf, but they actually pay the bills for relatively few of their customers.  Increasingly, the patients are paying for themselves.

Patients covered by high deductible health insurance plans do not seek as much health care as those with better insurance, and the total amount of spending on health care in this country has not been rising as fast as it used to.  Holding down health care spending sounds like a good thing when a politician or a newscaster says it, but that ignores the fact that some health care spending is truly useful.  If health care spending was just being controlled by patients going without unnecessary care, then I would be all for it, but studies have shown that when patients choose not to get health care because they can’t afford it, they also go without necessary, sometimes lifesaving care.  Patients should be able to get help when they feel they need it, without worrying about whether their problem is worth the expense.

This is the problem that direct primary care was invented to solve.  Patients who subscribe to their physician’s practice can contact their physician when they feel the need without running up another bill.  The visit can be in person, by phone, or any other way that serves to solve the problem.  This relationship can save patients money by keeping them out of the emergency rooms and urgent care centers that are providing far too much of our primary care these days, and eating up patients’ deductible payments.  A direct primary care subscription can easily pay for itself by keeping a patient out of an emergency room just one time.

The future of health insurance is that patients are going to be paying their own bills for all but the biggest illnesses and accidents.  Direct primary care allows them to spend their money on someone they trust, who knows them well, and has their best interests at heart.

Why It Is Time For Me To Begin Again

Those who know me know that I was once in private practice.  I owned my own small practice for eleven years, then I sold it to the local hospital.  After that, things got complicated.  I, quite of my own accord, got in on the founding of two Federally Qualified Health Centers in 2001 while still employed at my hospital-owned practice.  At one point in that first year of the FQHC’s I worked at three offices and admitted patients to two hospitals, a lifestyle I don’t recommend.  Still, I don’t regret a moment of it.  The FQHC’s have thrived, and with them we have established an expectation in our part of northern Indiana that no one should be without a primary care provider.  If I retired tomorrow, I would feel that not only had I treated a lot of patients, but also that I had made a positive change in our medical community.

I am now leaving my FQHC and going back into private practice, because there is a need for another change, for me and for my profession.  I am starting a direct primary care practice.

Direct primary care (DPC) is an idea whose time has come.  It is a model where a doctor contracts directly with his patients for services in exchange for a monthly subscription fee.  There is typically little or no charge for individual care episodes.  Most importantly, the doctor does not bill insurance for payment.  His payment comes entirely from the patients.  This allows the doctor to have very low overhead, because a large part of a primary care doctor’s overhead stems from his billing department.  A doctor has to have at least one billing clerk working for him if he is going to bill insurance, and that clerk needs a place to work, so the office has to be big enough to fit in the extra staff.  In order to pay for the billing clerk and the extra office space, the doctor needs to see more patients, which requires more examining rooms and medical assistants, which have to be paid for by seeing more patients, and when the spiral is done a primary care doctor is typically seeing over twenty patients a day, with two-thirds of the gross proceeds going to overhead.

In contrast, a DPC practice has no billing clerks, so that expense is forgone, and the spiral runs backwards: less office space, fewer supporting staff members, until the practice has five to twelve unhurried visits a day in a small office running perhaps 35% overhead.  The doctor can make a living with 300-1,000  patients he knows really well, instead of the typical patient panel of 2,500 patients.

In addition, a subscription model of payment allows for different, often better patient interactions than are allowed by the insurance companies.  The reason your doctor won’t talk to you on the phone is that nobody is paying him to do it: the insurance companies don’t consider it a billable service, and most doctors don’t bill for things not on the insurance menu.  You can’t interact with your doctor by Skype, or e-mail, or Twitter (or the similar platforms that offer medical-grade security) because he would have to do this for free.  On the other hand, if these services are offered as part of a subscription contract with no insurer interference, then you and he can take advantage of these modern conveniences.

The rise of DPC practices has been encouraged by significant changes in the health insurance business, which I will cover in a later post.  For now, I will just say that I am looking forward to practicing medicine at a quiet, thoughtful pace for patients who value my services.