Direct Primary Care

Pete Celano, 23 March 2o16

msub

If the year 2015 was all about the rise of Virtual Visits in healthcare, 2016’s theme may be New Payer Models.

Consider Direct Primary Care [DPC].  It’s an alternative payment model, involving a monthly subscription cost, in which the focus is on a tight 1:1 link between a patient and his or her primary care provider.

Physicians offering DPC tend to define a list of services for patients and implement a ~$10 fee for each physician visit, in addition to the monthly recurring membership fee of about $40.

Think of it as Concierge Lite.

Consider some math:  For a physician, a panel of 1,000 paying patients at $40/month yields $40K/month, or $480K per year.

The number of independent physicians dropped from 57% in 2000 to 39% in 2012, and many of those that remain are looking to new practice models to survive/prosper, according to the Accenture Physicians Alignment Survey.

DPC practices vary on Labs et al– some include off-site diagnostic services. Others are more limited and may even continue participating in fee-for-service contracts with insurance carriers and use the subscription-based patients to supplement their contracts.

KEY:  A pure DPC practice doesn’t need staff to organize, review, file and manage third-party payment claims. And when working with private insurers, most DPC practices can be creative/aggressive when it comes to contract service rates and participate only in contracts that are mutually beneficial for the patient and the physician.

It’s possible that in DPC models, there’s more time per appointment– to date, that has been a key reason there’s appeal to both the doctor and the patient.

Look at this rapid DPC growth just through 2012, and it has only accelerated since then–

BG-direct-primary-care-chart-1

Here’s an emblematic DPC practice, in Columbia, Maryland:  www.clarii.com.  Note in their value prop:

“Total Cost Transparency.”

And you know what would make DPC doubly appeal to patients, and makes it highly cost-effective to the Physicians?  Two words:

Virtual Visits.

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