Look, Up In The Sky! It’s A Bird, It’s a plane, It’s a……DPC Physician!
Direct Primary Care (DPC) centered health plans are growing in number for a lot of reasons. Primary care physicians, under the thumb of insurance companies, want their freedom back. Patients want easier, quicker, unlimited access and more time with their doctor. Plan sponsors see direct primary care physicians as their “In-House” risk manager tasked with managing all upstream care towards best-in-class specialty care with lower cash-like pricing. The article below is a great read for all these stakeholders.
The DPC Menu
Having a “good payer mix” in the traditional system means picking between insurance companies, akin to calling different flavors of chips a varied diet. In the insurance-based system, primary care physicians were always on the menu of who got paid and, compared to hospitals, pharmaceuticals, and specialists, always came up short with no recourse. Part of Generation 1’s aversion to anything besides direct patients comes from their prolonged time on the insurance companies’ menu and expecting that accepting payments from third parties will again place them on a menu to be carved up. But direct primary care puts primary care physicians in the driver’s seat where they hold the menu of options.
These are the options in the mix and the state of them for DPC practices today:
Insurance
The big, bad wolf in the DPC world. Failure of traditional health insurance to properly value primary care played a huge role in the rise of DPC. However, now with primary care in the driver’s seat, there may be opportunity to work with insurance without the previous dependence on insurance.
Taro Health*: This company created an individual marketplace insurance product which contracts only with DPCs. They currently operate in Maine and Oklahoma with wide acceptance and satisfaction from the DPCs in those states. Their success comes from the thorough research they did prior to launching the product, listening closely to dozens of DPC doctors about what didn’t work with traditional health insurance. Working with Taro does not affect the workflow of DPC practices, meaning they do not require claims submission, and they pay monthly rates agreeable to the contracted prices which are much higher than traditional insurance would.
Employers
Employers sponsoring memberships for their employees started with small businesses who otherwise didn’t provide any health benefits due to the prohibitive cost of small group insurance. Most new DPC practices today still find success in working with small employers in the 5-20 size. Larger employers have more requirements and often can’t work with just a single location practice. Solutions have arisen to help pair smaller DPC practices with medium to jumbo employers without undue burden to younger practices.
Local DPC + affiliated networks: The original solution for working with large employers came from independently owned DPC practices which would subcontract other DPC practices to help service employees of large employer contracts in distant locations. Notable examples include Nextera Healthcare in Colorado founded by Dr. Clint Flanagan and Primary Health Partners in Oklahoma founded in part by Dr. Kyle Rickner. Affiliate practices receive an agreed upon monthly payment without much, if any, leeway for determining the monthly payment. The employer facing practice often takes a small administrative fee.
Affiliated Networks only: Hint Connect* does not have any of their own practices but instead creates a network by contracting directly with independent practices. Practices have some ability to determine their monthly rate when participating in the network. The Hint Connect team will then approach medium-sized employers and match employer footprint to DPC practices in their network.
Digital marketplaces: The newest entrant to the employer space, digital marketplaces do not form networks, but rather place individual practices on their platforms which employers can then direct their employees to independently choose. Apaly and Aligned Marketplace are two of the quickest emerging marketplaces. Apaly’s platform joins employers and DPC practices to make their own contracts. In short, DPC practices can choose to band together and write contracts for their own local networks, write their own practice contracts, or use Apaly’s boilerplate contract. Employers essentially “shop” the contracts and pick which ones they want to offer their employees. Aligned Marketplace allows practices to name their monthly fee and will list it alongside the other options. They do engage in some limited risk sharing, which, compared to government and insurance value based schemes, does not have much administrative burden.
Government
Unfortunately the bureaucracy of state and federal governments still insist on filing claims and filling out meaningless, burdensome “quality” check boxes. Principles of DPC are currently incompatible with any government payment in any meaningful way, including all of the current CMMI VBC models. There are opportunities like what the Medicaid bills in the Senate and House are trying to do. A real solution requires legislators who understand the principles of primary care who can create a true direct pay solution.
Individuals
The “meat” of DPC practices. Direct payment from patients forces an alignment of incentives as practices must continuously provide both excellent care and excellent customer service in order to keep their members. While DPC practices have different options for revenue, keeping at least a significant percentage from direct patient pay remains a key part of differentiating DPCs from DINOS. In today’s landscape, a practice which accepts payments only from one or a mix of employers, insurance (even a DPC friendly one like Taro), or the government can definitively be labeled not DPC.
Principles of Participation
Two main factors drove the rise of DPC: 1. pay was too low. 2. Administrative burden was too high, especially in light of the low reimbursement. Direct contracting with patients solved both these issues because patients were willing to pay higher rates than insurance for their primary care and did not require burdensome reporting. Working with others, including employers, requires evaluating if these two problems come with the third party. Lack of choice led to primary care’s previous malnutrition. Greed and/or desperation could lead to a different form of malnutrition. This can take the form of willing to jump through unnecessary hoops again or accepting much lower than acceptable pay for the sake of “growth.” To credit the Generation 1 Pioneers, the only reason current employer solutions and Taro Health exist the way they do is because the Pioneers held fast to their core beliefs and thus reshaped the healthcare landscape to their principles. The DPC model still has a way to go before it takes its rightful place as the predominant primary care model. Doing so requires a growth of DPC practices alongside more parties interested in paying for DPC memberships. DPC physicians have two important roles to play to make the goal a reality: 1. have an openness to other payers in addition to direct patient pay and 2. holding steadfast to the core values of what makes DPC a unique and revolutionary solution in the healthcare landscape.
*Author Disclaimer: I hold advisory shares in both Taro Health and Hint Health (parent company of Hint Connect). I took on advisory shares because I believe these companies can greatly help further the growth of DPC practices and I also wanted to make sure I could help keep them aligned with the mission and vision of the DPC movement.
SOURCE: https://dpcnews.com/opinion/the-dpc-menu/
