How is Direct Primary Care Different?
How is Direct Primary Care different? It's a simple enough answer with incredible changes and results. In its basic form, Direct Primary Care is when patients contract directly with a healthcare provider. That does not mean contracting with an insurance agency, being "assigned" a doctor, or getting bounced from one doctor to the next. Direct Primary Care is simply picking your provider, contracting with them directly, and getting all of the benefits that come with it.
So why does this matter? How much of a difference could it really make to contract directly with a doctor instead of by using insurance? The answer is... A lot. The difference Is profound, not just financially, but in the quality of care you receive. The traditional healthcare system works on a concept known as fee-for-service. This is a concept that has been around for generations, ever since the inception of modern medicine, and has served us well in the past. Over time though as various entities have become involved, as the prices have skyrocketed, and as the volume of patients has increased.. the fee-for-service model has become outdated and no longer makes sense. The model itself has become a source of many of the problems rampant today. Because of how the "business" of medicine has become structured, doctors and healthcare providers are now forced to see more patients in the day, spend less time with them, and ultimately deliver less quality care. There are built-in incentives in the reimbursement models with all of the major insurance companies and financial reimbursement programs in the United States to provide a less personal and lower quality of care in order to see more patients, faster. The result is patients who do not know their healthcare providers, doctors who take weeks or months to get into, missed phone calls, outrageous expenses, and ultimately poor quality healthcare. The loss of the provider-patient relationship has let loose an age of mistrust in medicine and healthcare that is leading many to seek answers from untrusted sources.
Direct Primary Care, by contrast, is a fundamental change in the "business" of medicine. That's all it truly is, you change the business and financial backbone of how it works at a foundational level, and it will then change how the medicine can be delivered. Change the pricing structure, you change the delivery of medicine. To illustrate how this works is easy. In the fee-for-service model when you take into account the overhead expenses, the salary of staff, the salary of the doctor, and the reimbursement rates of insurance: we build in a markup into every service that gets performed to account for that. Once you know how much you can make per service there becomes a quota of how many services a day a doctor must perform for a practice to remain profitable. On average, in the United States, the typical provider must see between 25 to 30 patients per day. To maintain this volume of 25 to 30 patients per day, every day, most providers in the United States are therefore responsible for between 2000 to 3000 patients on their entire panel. Providers who have less than 2000 patients, often cannot sustain the 25 to 30 patient volume each day and are therefore a less profitable practice. Additionally, doctors and providers who are in an insurance network are mandated to accept the pricing schedule provided by the insurance company and cannot change their fees to accommodate patients. By doing simple math, to see 25 to 30 patients in the day that usually means a provider must see a patient every 15 minutes. So if you've ever wondered to yourself why your doctor is so busy, why you can only be seen for 15 minutes, why you haven't heard back from them, or any other concern about how busy your doctor is – this is why. This effect becomes even more pronounced with providers who take Medicare, Medicaid, and other federally insured patients. While they are great on the patient's side with low premiums and deductibles, the actual reimbursement rates for providers are substantially lower than their private insurance counterparts, thus requiring even more volume to make up those fees. This is why 1/3 of patients on Medicare and Medicaid nationwide can’t even find a provider who will accept them.
Direct Primary Care is a solution to all of these problems by separating the revenue of the practice from the services that are provided. This simple technique is not new. It's the same model that has been used for gym memberships, Netflix subscriptions, and a variety of other subscription-based services that allow you to use your membership whenever you need to and as much as you want to. This simple change from fee-for-service to a membership-based program has long-reaching effects. First, there is no limit on how many times you can be seen and there is no "visit fee" or "copay". Additionally, while most practices will still charge for certain procedures that require consumable supplies, all of them offer extreme discounts with a membership compared to an insurance-based practice. At Starlight Health, we've taken it a step further and normally only charge for send outs such as labs or imaging. That’s it. When paying us directly, It is not required for us to charge the insurance rates for our services and instead, we can set our pricing structure as we see fit. For example, routine blood work with our practice which would typically cost a patient over $400, cost Starlight health members for around $20. These kinds of savings are seen across the board regardless of what we do and have resulted in patients saving thousands of dollars each year without even having to touch their insurance or deductible. This has created an effect known as "stabilization of expenses" which can help to create a budgetable and predictable expense for healthcare throughout the year.
It's important to also recognize that there is a difference between "healthcare" and "health insurance". Healthcare is what Direct Primary Care is about. It's having someone you can talk to as needed, it's getting your blood work, getting your meds, getting stitches when you need it, it's having unlimited access to a primary care provider you trust whenever you need them. Health insurance, on the other hand, is all about money. Health insurance was designed to protect you from the costs of major hospitalizations, surgeries, and other catastrophic events that can cause bankruptcy if not prepared for. The problem is that many insurance programs have transitioned to try and encompass both insurance and care in one. The way that members of a Direct Primary Care can save thousands of dollars each year is by learning to separate those two distinctive purposes. Get a quality catastrophic plan (low premium / high deductible plan) + a DPC membership outside the system and that’s how you save money. Then no matter what insurance plan you have, we can see you even if you change insurance or employers. As long as you don’t get Medicare or Medicaid we can follow you wherever you go.
At the end of the day, it's as simple as this. Direct Primary Care is about relationships. Save your insurance (if you have one) for catastrophic events, then pick a provider you trust to handle the rest. It's more personal, it’s better quality, it's cheaper, and it works. At Starlight Health, most patients in our practice are averaging over $1500 worth of care for less than $200 out of pocket within their first two months of care alone. The drastically increased amount and quality of care one can receive over a year are staggering. If you'd like to try a new way of experiencing medicine, give Direct Primary Care a chance.
Jason Rogers, PA-C
President, Starlight Health