Reprinted from the Fall 2020 Issue of The Ohio Family Physician
By: Lilian White, MD; Ryan Kauffman, MD, FAAFP; and Mary Beth Rodes, MD
Current reimbursement in the fee-for-service (FFS) model is unsustainable for many primary care offices. Overhead has skyrocketed due to large patient throughputs, while coding visits and processing claims drive physicians to further increase panel size and shorten visits. Meanwhile, patient satisfaction is tied to longer encounters, resulting in calls to end the 15-minute visit.1
Physicians spend up to half of their office time doing unreimbursed tasks, with most physicians noting “too many bureaucratic tasks, including documentation” as a leading contributor to burnout.2,3 This traditional model of billing has lost touch with the needs of patients and physicians. The current pandemic has accentuated these problems, with limitations in telehealth access and reimbursement for physicians in the FFS system.4 Direct Primary Care (DPC) is one solution to many problems in the current system.
Twenty-five states have laws defining DPC as a reimbursement model that:5
- Charges a periodic fee
- Does not bill third parties on a fee-for-service basis
- Requires any per-visit charge to be less than the monthly equivalent of the periodic fee.
In 2019, Ohio House Bill 166 passed defining DPC as “not insurance.”
Patient Advantages
Many patients, particularly the uninsured or underinsured, find significant savings in healthcare costs under DPC. One study showed a $1,486 savings per patient per year compared to traditional FFS practices, and furthermore showed a 59% decrease in emergency room visits, a 30% decrease in the number of days admitted to the hospital, a 62% decrease in specialty referrals, 80% fewer surgeries, and a 115% increase in primary care visits.6
- Increased access: In the FFS model, when physicians are not face-to-face with a patient, they generally are not producing revenue. Because DPC physicians do not depend on face-to-face time for payment, this model offers greater flexibility to interact by phone, text, email, or even webcam. During the coronavirus (COVID-19) pandemic, DPC practices swiftly and skillfully made greater use of existing alternate communication platforms, without concerns about reimbursement.
- Reduced testing cost: Labs, imaging, and other tests may be negotiated by practices directly with suppliers for lower prices. For example, Plum Health DPC charges $4 for a complete blood count with differential.7
- Reduced medication cost: Some practices dispense medications purchased wholesale and pass along the cost savings to the patient with a minimal processing markup (~30% vs. 200-400% retail markup).8 A 30-day supply of Lisinopril 10 mg is $4 at Walmart vs. 36 cents from AtlasMD, a DPC practice.9,10
- Relatively low visit costs: Reduced administrative burden means less support staff, allowing practices to keep fees lower. In 2018, 65% of DPC practices reported a monthly fee between $50 – $75, with 26% charging more than $75 and the remaining 9% charging less than $50.11 A low membership price point distinguishes DPC from concierge care, which also bills insurance in addition to collecting a recurring retainer fee.
- Increased time for patient-physician interaction: DPC physicians have longer visits because they are meeting overhead costs with retainer fees rather than patient visit charges. For those patients with good insurance and those not concerned about cost, time and access are the greatest benefits of DPC.
A few commonly cited advantages of the DPC model for physicians include:
- Stable income: The monthly subscription fee provides a stable, dependable income base that is not tied to whether patients show up for scheduled in-person appointments. This is particularly poignant during the early months of the COVID-19 pandemic when outpatient visits decreased by almost 60%.12 Many DPC practices had the potential to maintain consistent income during this time, easing financial worries.
- Smaller patient panels: Revenue is primarily from monthly membership retainers, thus reducing the need to herd vast numbers of patients through the office to meet overhead. DPC practices typically have 500-800 patients compared to a FFS panel of around 2,300.2,13 Smaller patient panel size may lead to reduced malpractice insurance costs.
- Longer appointment times: The reduced size of patient panels and the ability to deal with many issues outside office visits allow for longer appointments.
- Simpler documentation: Documentation is another source of moral injury in the FFS model.14 In DPC, documentation only includes what is relevant to patient care and meets legal requirements. Since visits are not being coded for billing, there is no need to expend time and energy on documentation for that purpose.
- Improved professional satisfaction: There is a positive relationship between increased visit times and professional satisfaction.15
The benefits of DPC have allowed DPC practices to quickly respond to their patients during the stress of the pandemic. The lithe and lean approach afforded by the DPC model easily applies to less stressful times as well, ensuring both patient and physician satisfaction alike.
References available on the OAFP website.