Early this year, Gallup announced that 70 percent of Americans hold negative views of our health care system. That’s hardly a fluke; the number has barely budged for the last 15 years.
One major source of frustration is with our primary care system. Office visits feel rushed, physicians are too busy filling out forms to connect meaningfully with their patients, and consumers struggle with indecipherable bills and surprise charges.
Enter direct primary care (DPC), an innovative solution to expanding access to primary care and lowering costs that has been rapidly gaining ground in the United States.
In a DPC practice, a doctor charges patients a direct retainer fee for primary care services, including clinical, laboratory and consulting services. Third-party payers, like private insurance companies and government programs like Medicare, are cut out of the equation, so patients pay entirely out-of-pocket. That may sound expensive, but the median membership fee for an adult is $65 per month (less than many cell phone plans), and some practices charge as little as $25.
Cutting ties with insurance companies eliminates mountains of billing paperwork and other administrative tasks, reducing overhead costs and leaving more time for DPC doctors to focus on patients.
By using a flat monthly fee instead of a fee-for-service payment structure, DPC reverses doctors’ usual incentives to bill for more services and instead rewards them for providing superior patient care. For example, insurance companies typically compensate physicians only for face-to-face interactions with patients. By contrast, many DPC practices offer consultations over email, text message or video conference — so patients can get quick advice and monitor progress without needing an in-person appointment.
DPC practices tend to have fewer patients, enabling doctors to spend more time with each patient, develop a robust relationship, and emphasize preventive measures. By contrast, traditional primary care practices (where appointments last a mere 17.5 minutes) are often forced to provide reactive, superficial treatment.
The results are dramatic. DPC practices are better able to manage chronic conditions and address emerging issues in a low-cost setting, so expensive emergency room visits are avoided. One study found that urgent and avoidable hospital admissions were 62 percent lower among DPC patients compared to patients with traditional insurance. Another study concluded that DPC patients incur about 20 percent lower overall health care costs and are more satisfied with their care.
For all its advantages, DPC faces legal and regulatory hurdles. In some states, hostile insurance commissioners have judged DPC to be an insurance product and threatened doctors with criminal prosecution for failing to conform to onerous regulations. A large number of states have explicitly exempted DPC practices from their insurance statutes, but the model’s growth nationwide is hamstrung by states that have yet to pass DPC protection laws.
Congress can help too. The IRS doesn’t currently consider payments to a DPC practice to be “qualified medical expenses” under rules governing health savings accounts (HSAs). Consequently, the 22 million Americans who have an HSA can’t use these tax-exempt dollars to pay their monthly DPC retainer fees, making it more expensive for them to choose that option.
Not long ago, the personalized, simplified perks of DPC (or, as it was then known, “concierge medicine”) were a luxury of the wealthy. Thanks to the free market, DPC is growing into a mainstream option for millions of Americans dissatisfied with the bureaucratic leviathan that is modern health care.
If Americans are to improve their opinion of the health care system, it needs to work for them and address their needs. DPC practices do just that.
