A New Old Model That Could Change How Employees Receive Primary Care

Is it possible to get quality primary care without worrying about deductibles, copays, or dealing with the insurance company? An old model is being revamped to simplify primary care and change the incentives.

In the fee-for-service model where many primary care physicians are owned by large hospital systems, the incentives for the doctors may be skewed away from patient care and cost. More tests, procedures, and appointments mean more revenue for the doctor or hospital system, and if they are part of a large system, physicians have added pressure to refer their patients to specialists and surgeons in that network, regardless of whether they are the best or most cost effective.

A recent Rice University paper looked at hospital readmission rates, process of care measurements, and patient satisfaction scores to see whether market concentration of vertical integration between doctors and hospitals improved care for patients. “Physician-hospital integration did not improve the quality of care for the overwhelming majority of these measures,” said the paper’s author Vivan Ho. “If patient welfare doesn’t improve after integration, there may be other reasons why physicians and hospitals are forming closer relationships — perhaps to raise profits.”

But a growing practice nationwide is changing the incentives facing primary care physicians. The model, called direct primary care, is both new and old. While there are many iterations, it usually means paying a subscription directly to a primary care doctor for 24/7 access to the physician. In some ways, it harkens back to the days where a doctor would make house calls and more recently, concierge doctors.

Nationwide, there are over 1,000 clinics that have some form of this model. In North Texas, there are over two dozen practices, mostly in Dallas and the northern and western suburbs. Most practices are fairly small, with one or two doctors that have smaller patient loads. Doctors appreciate the better pay and hours, but the payment system impacts the incentives as well.

At DPC Healthcare in Fort Worth, two doctors provide a robust primary care service, including basic labs, weight management, physical therapy, chronic disease management, well child and well women visits as well as all of the normal primary care duties. Because the clinic is only paid through the subscription, there is no incentive to run unnecessary tests or imaging, and the independent clinic is able to choose a specialist if needed based on their decision on what is best, rather than having the pressure of feeding the larger hospital system with patients. DPC also has an app that allows for telemedicine, and the doctors are always on call if needed.

Right now, DPC and other direct primary care patients come from individual subscribers, those who don’t have insurance with their employer, or people who want the personal touch direct primary care can provide. But they are hoping to expand into the employer-sponsored health insurance. Because of the altered incentives, DPC says it can bring down reduce healthcare expenses by 30 percent. They also say they have reduced ER visits among patients by 65 percent, inpatient hospital days by 60 percent, specialist visits down by 66 percent, and advanced radiology by 29 percent. Not to mention that if employers are paying the subscription, there are no insurance companies to deal with.

Co-founder and Chief Operating Officer at DPC John P. Ortiz sees certain components of the healthcare system going away as costs continue to rise, but thinks direct primary care can be a better alternative than other primary care systems. He says employers he talks to love the idea of changing their primary care system. “They are stuck in a system that is not good, and direct primary care releases them from the system that isn’t good,” he says.

Employers in other areas have offered direct primary care as an option for primary care, while still offering insurance that would cover more expensive medical care. But Ortiz noted how good primary care can reduce healthcare spending overall by helping patients avoid those more expensive visits to the hospital. “All the other costs expand when you don’t have good primary care,” he says.

Most direct primary care clinics are just stand alone facilities, and are limited if an employer has employees that live over a wide area, while traditional systems offer wider networks with more convenient locations. Critics say that direct primary care reduces the patient load for each physician, exacerbating the already present primary care doctor shortage. At DPC Healthcare, their entire patient load is less that 1,000 between two physicians, whereas most primary care physicians see over 2,000 patients by themselves.

But Dr. Paul A. Fabela, Chief Physician Officer at DPC Healthcare, thinks that the model itself could influence the direction medical students take in their careers. Many companies in data-friendly Silicon Valley use direct primary care, Fabela noted. The large patient loads, insurance paperwork, and low pay keep many medical students away from primary care, but if all of those factors were ameliorated through direct primary care, more doctors might choose it as a career, counteracting the shortage. “Physicians don’t want to deal with paperwork and the fee for service model. This changes the dynamic.”

Time will tell if this model can catch the eye of more than just the individual subscribers, but the incentives pose an interesting proposition for employers looking for solutions to ever-rising healthcare costs.


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