Everything you need to know about Direct Primary Care (DPC)

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Direct primary care is a payment method where the patient pays their physician or practice directly in the form of periodic payments for a specific set of primary care services. So, what’s everything you need to know about direct primary care?

Direct primary care is an agreement that patients make directly with their provider. It’s an option for covering the costs of medical care and it doesn’t use insurance claims. Direct primary care typically covers the costs of acute-care visits, chronic condition management, and routine screenings.

Now that we know the basics of what direct primary care are, we are going to dive into exactly what direct primary care is, the advantages and disadvantages it has, and how much it typically costs.

What is Direct Primary Care?

Direct primary care is ultimately a healthcare business model where patients will purchase a membership that will allow them unlimited access to different kinds of primary care services. The patient is the require to may a monthly fee to the medical office they are attending and access the care that they need from the office. They are able to do this without paying an additional fee when they attend the medical office. All the patient has to pay in the monthly membership fee.

Additional services such as providing prescription drugs, imaging, and lab services are provided with an extra fee at the time of service. These services are typically done with wholesale pricing. Direct primary care typically will not bill third party payers like Medicaid, Medicare, or any other commercial health insurance companies, so the patient is responsible for any health care costs that is not included in the membership fee.

There are over 1,700 direct primary care practices as of 2022. These practices operate in nearly every state in the U.S. Most Americans are not utilizing DPC memberships because direct primary care practices typically have fewer than 600 patients. However, the number of DPC practices have been growing, becoming more more popular in the US over the past decade.

What Services are Covered with Direct Primary Care?

Consultations

The purpose of a consultation is for practitioners at medical offices to recognize situations or conditions in which the patient may be ill or need medical help. The practitioner then tries to find the diagnosis for the patients health issue so that the appropriate investigations, treatment, and review can be planned.

Physical Exams

Physical examinations are routine tests that your primary care provider performs to check your overall physical health. This type of exam is also known as a wellness check. You do not need to be sick or injured to request a physical exam.

Care Coordination

Care coordination is a primary care practice that involves organizing patient care activities and sharing certain information among different health care providers concerned with a patients care in order to achieve safer and more effective care. This method aims to improve continuity and bridge transitions of care.

Lab Services

Laboratory services provide a service for medical scientific research through conducting examinations and medical tests in order to provide important information, data, and results to patients and of course their primary care provider. Some of the tests that can be performed in the primary laboratory are blood smears, urinalysis, hematocrit, white blood counts, sedimentation, and prothrombin information.

Advantages of Direct Primary Care

Increased access to care

A direct primary care model allows primary care providers and doctors to spend more time with their patients. Patients are allowed around 30-60 minutes per visit, where a regular doctor’s visit that relies on health insurance reimbursements typically runs around 12-15 minutes. The doctor’s office doesn’t have to spend time working on health insurance paperwork or bureaucracy so they get to spend less time and money on administrative tasks. This allows doctors to spend more time with their patients.

Cost Savings

Direct primary care allows patients and doctors to eliminate the need for insurance billing, coding, administrative expenses which then results in cost savings for patients. This makes patients be less likely to avoid seeking care due to costs, making trips into the doctor’s office whenever they feel like they need to. Because patients are more likely to speak to their physician with direct primary care, this can potentially prevent them from eventually escalating into situations that may require emergency care.

Continuity of care

Direct primary care providers usually follow their patients over time, which then provides them with continuity of care and a better understanding of the patient’s specific health needs. When a doctor becomes more familiar with a patient, it is easier for them to identify when something may be wrong or whether or not they need more medical attention.

Patient-Doctor Trust

Direct primary care providers will typically have a stronger patient-doctor relationship because they see their patients often which will then build the trust of the patient. This will allows for better communication, increased patient satisfaction, and overall improved health outcomes. Studies have also shown that patients with direct primary care have better health outcomes which includes fewer hospitalizations, blood pressure control, and improved diabetes management.

Disadvantages of Direct Primary Care

No Tax Benefits

Providing health insurance to health care companies business expense or perquisite which is then eligible for deductions under the tax income act. Which then allows health care companies to save substantially in taxes. This is great for the companies but not so much for the patient because the patient will receive no tax benefits.

Holistic Healthcare Absence

There are definitely advantages to primary care coverage, but those advantages may not be enough. Hospitalization expenses, surgery costs, potential ambulance charges, and room rents are unfortunately not included under direct primary care. This means that holistic healthcare is generally not included in Direct Primary Care plans.

Two-Tier System

There are many concerns that the direct primary care model creates a two tier system. This means that patients that cannot afford direct primary care memberships might have to wait longer to for an open appointment and receive a lot less time with their health care provider during their appointment even though they may need it.

Higher Retention Costs

Employees everywhere are always looking for several fringe benefits at work that are usually provided over there CTCs and complete health care is one of those benefits. DPC only covers primary care so it most likely will not be enough to retain or attract top talent.

Costs of Direct Primary Care

A direct primary care membership can cost anywhere between $30-$300 a month. Patients no longer have to worry about unexpected charges when the visit a primary health care provider. These fees tend to be lower for children and higher fees often cover a whole family.

Employees can also provide a direct primary care membership to their employees which is often in conjunction with a self insured medical health plan. Direct primary care memberships that are employee sponsored are include onsite care facilities which allow employees to seek care without having to travel to another health care facility. This provides employees with minimal disruption to their workday.

It’s important to understand what’s covered in the membership and what isn’t. For services that are fully covered under the primary care arrangement, patients will not have to pay anything but their monthly fee upon visit.

Many patients wonder what types of services direct primary care covers, but it really depends on the facility that you attend. Lab-work and imaging typically requires additional fees. Most prescription medications will also require additional fees. Most of the time, the patient will get to pay wholesale costs instead of retail costs because the primary care membership can be structured so that there is no mark up on certain fees.

Does a Direct Primary Care Membership Count as Insurance?

Many patients confuse their primary care membership as having the ability to replace their health insurance. To put it simply, a direct primary care membership does not replace a health insurance plan. Direct primary care may seem like an added expense to a patients insurance, but it actually can help reduce insurance costs. This is possible because direct primary care costs already cover everything that includes primary/routine care. Clinic visits are also unlimited and no longer include co-pay fees.

Like we identified above, Medical services that go beyond direct primary care will not be covered under a direct primary care membership. That is why it will not completely replace insurance. Things like specialty care, surgeries, inpatient care, emergency care, etc, are all not included in a primary care membership plan. These are all things that are very expensive are best covered with an insurance plan.

The combined costs of your health insurance plan and your primary care membership may actually end up being lower than than the premium for a robust health insurance plan that provides extensive deductible coverage. It’s very common for patients to combine direct primary care memberships with health coverage that isn’t compliant with the Affordable care act. This includes fixed amenity plans, health care sharing ministry plans, and short term health plans that all have fairly high deductibles,

Concierge Medicine vs. Direct Primary Care

Concierge medicine

Similar to direct primary care, concierge medicine is a membership based practice that offers patients quick and easy access to physicians through a wide variety of in-house and virtual options. This membership also includes longer appointment times than primary care physicians.

Concierge medicine providers may charge your insurance company for your visit in addition to your membership charges unlike direct primary care. This allows concierge medicine physicians to have two different forms of revenue while allowing patients to get help paying for any medical services that are not covered by their membership fee.

Any copay’s or health related costs may be deducted. Your concierge medicine physician can serve as a patient advocate for you and has the ability to refer you to other specialists, hospitals, and health providers. One of the downsides is that concierge medicine only comes with annual memberships and it comes with higher membership fees than direct primary care.

Direct Primary Care

As we identified above, direct primary care is also a member ship based model where patients pay have the option to pay monthly, quarterly, or annual fees for their visits instead of paying through an insurance provider. This model allows physicians to spend more time with their patients and gives them more consistent revenue.

The patient benefits from their membership fee covering the costs of all their doctors visits and most of the primary care services that high deductible insurance plans would normally require you to pay out of pocket. Patients also can expect longer visit time with primary care physicians and quick access to their doctor by phone, text, email, video chats, and same-day, next-day appointments.

Different from concierge medicine memberships, direct primary care memberships can be canceled at any time because the memberships are able to be set up on a monthly basis. It is also accepted by the Affordable Care Act as an acceptable non-insurance option. The downsides of direct primary care is that physicians may not won’t accept payments through your specific insurance plan because it’s considered an out of network provider.

Summary

Direct primary care is becoming more and more popular in the US. Members have the ability to access whatever primary care services they need whenever they want with their membership. However, direct primary care memberships are not sufficient enough to serve as a patients only health coverage, so it’s important to have health insurance to go along with it in case of emergencies. Direct primary care expenses are not considered medical expenses and are not tax deductible.

If a patient has a direct primary care membership with a HSA qualified health plan, they will not be able to make contributions to an HSA. Direct primary care memberships offer the opportunity for patients and family to have an affordable monthly or annual fee with convenient features like phone, email, and video consultations. No matter how many services your primary care membership may include, it’s vital that you also have major medical coverage as well.