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Why you should pay attention to the future of direct primary care.
The vast majority of our country’s healthcare delivery is paid for using an insurance-based fee-for-service (FFS) model. However Warren Buffet has accurately described this status quo as the “tapeworm of the economy.” The overwhelming number of physicians who are increasingly seeking to escape the way in which they’re forced to practice medicine today would likely agree.
As a result, primary care practices across the country have turned to direct primary care (DPC) as a model where providers collect a monthly fee directly from their patients, or their employer sponsors, in exchange for a predetermined list of services. It’s a significant shift that provides transparent prices, aligned incentives, and little to no administrative overhead. It is not insurance and not FFS. That, in turn, makes for happier physicians and happier patients.
While DPC practices are rapidly gaining traction, the industry is still on a journey to build an interconnected ecosystem that collectively outperforms the current FFS model. There’s no silver bullet solution to achieve this goal, but three specific steps can help us get there.
1. Demonstrate consistent ROI
For DPC to truly be successful, a key first step requires an achievable ROI for the stakeholders involved. Practices need to have the tools available to make the transition to a DPC model without significant risk of headache, employers should expect to unlock savings for their employee population, and patients should receive a hands-on and seamless experience.
To optimize the process, physicians should look for a well-rounded system that reduces the complexity of direct-to-consumer membership management and employer direct contracting, helps eliminate perceived risk during a DPC transition, and scales as a practice evolves. By removing the manual effort involved, stakeholders can reap the benefits of the DPC model and create a sustainable model for their practice.
2. Unlock demand for direct primary care
Working with large employers can bring new levels of complexity and operational overhead due to unique contracts that many physicians may not have dealt with in the past. However, as sponsors of health plans, employers can also help scale DPC practices quickly, given their large potential employee and dependent member populations. While a growing number of employers recognize the value of providing a direct primary care plan, there’s still much opportunity for employer education to drive further awareness of the benefits.
A recent survey of healthcare consumers found 68% of participants were initially unfamiliar with the DPC model, however once it was explained that the all-inclusive primary care program could lower costs, improve outcomes, and raise satisfaction, 83% of those surveyed expressed interest in signing up if DPC was provided through their current or future employer. Additionally, more than half of the respondents indicated they would be willing to chip in each month for the promise of better primary care services.
The benefits of this employee education are clear too – one advanced primary care model saved an employer 11% per employee per month, and another employer experienced an annual savings of $913 per member.
Tapping into these networks and clearly explaining the benefits of a DPC model fosters the opportunity for exponential growth.
3. Integrate into downstream care
For the DPC movement to continue building momentum, it’s crucial to look outside the four walls of primary care. Primary care only accounts for 5.4% of total healthcare expenditures, but has significant influence on patient decisions impacting most other areas of expenditure. To ensure the fundamental principles of price transparency, aligned incentives, and low overhead costs are adopted across the healthcare system, direct care contracting must be integrated into downstream care. Doing so will amplify the impact of core DPC offerings and help to grow the ROI for both the individual patient and employer purchaser.
A growing number of DPC practices are already working to make this possible by providing physicians with access to specialist expertise to deliver high-quality care while also preventing co-payments and out-of-pocket costs for patients traditionally associated with specialist visits. This, in turn, empowers physicians to spend more time with their patients and build stronger relationships.
What’s next for direct primary care
The DPC movement has a long and exciting road ahead as it works to help physicians escape the FFS hamster wheel that prioritizes volume over value, but the path is clear and the value is demonstrable through the many physicians increasingly turning to this model. In fact, Hint even witnessed 21% growth in DPC practices during the depths of the pandemic.
If we can continue to build on the success that the DPC movement has already seen, there’s no doubt we will ultimately end up with an ecosystem of transparently-priced, direct-pay relationships grounded in a foundation of affordable primary care. It’s a win-win-win scenario for the physicians, employers, and patients involved.