Direct Primary Care: Healthcare-as-a-service is gaining traction

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  Quantumrun Foresight
• August 26, 2022

Insight summary

Direct Primary Care (DPC) is transforming healthcare by offering patients personalized, fee-based access to doctors without insurance, emphasizing convenience and reduced waiting times. While DPC provides benefits like cost savings and improved doctor-patient relationships, it also poses challenges, such as potential extra costs for services not covered by the monthly fee and limited suitability for patients with complex medical needs. This evolving model is influencing patient choices, employer healthcare benefits, and competition in the healthcare market.

Direct Primary Care context

DPC is disrupting the US healthcare industry by providing patients with the opportunity to choose the services they want to benefit from rather than spending their money on costly co-payments for medical insurance. DPC is a relatively new healthcare model in which patients pay a monthly fee for unlimited access to their doctor. These clinics are typically small practices with limited staff and resources.

This model allows doctors to spend more time with their patients and provide personalized care. DPC fees cover in-person or virtual patient consultations and varying laboratory and clinical services. DPC practices typically do not accept insurance. Most practices recommend patients combine their subscriptions with a high-deductible “wraparound” insurance policy to cover emergencies and less commonly used specialized services not provided by DPC plans. 

The business model uses traditional insurance to cover: catastrophic health events, hospitalizations, specialist treatment, radiography, and surgery. However, DPC offers discounts on prescriptions, testing, imaging services, and dietary supplements to give people more flexibility on how they want to pay for their healthcare. For example, a standard monthly membership fee of $74 USD may possess several perks, including unrestricted 24/7 access to physicians by text, email, or phone, extended same- or next-day office visits, free diagnostic tests and office procedures such as an electrocardiogram or bone density scans, and body fat analysis. And if a patient requires a home visit or needs a phone consult while traveling, that may be included in different subscription models.

Disruptive impact

DPC providers, such as One Medical, are reshaping healthcare access by combining telehealth with in-person visits. With a significant increase in membership, as evidenced by One Medical's 31 percent growth year-over-year, this model highlights a growing demand for healthcare that minimizes wait times and administrative burdens. This approach, focusing on patient preference, also enables family physicians to move away from the conventional fee-for-service model, which often involves extensive paperwork and overhead costs. 

Despite its advantages, the DPC model has limitations. Not all medical services are typically included in the monthly fee structure, leading to potential out-of-pocket expenses for patients. These additional costs can encompass a range of healthcare needs such as prescriptions, lab tests, and imaging services. Moreover, if a DPC provider is not part of a patient's insurance network, the financial burden can increase significantly. This variability in DPC contracts requires careful consideration by patients to ensure their chosen provider aligns with their specific healthcare requirements. 

While DPC offers a more streamlined approach to healthcare, it may not suit everyone. Individuals with chronic illnesses or complex medical conditions might find traditional health insurance plans more beneficial. These plans often provide broader coverage for a wider array of services and resources, which can be crucial for managing more complicated health issues. This distinction suggests that while DPC is an emerging trend in healthcare, it represents only one part of a diverse ecosystem of care models. 

Implications of Direct Primary Care

Wider implications of DPC may include: 

• More patients choosing DPC plans based on personal health status and future requirements, leading to a shift in how individuals manage their healthcare needs.
• Employers increasingly opting to provide DPC options to employees, altering the landscape of corporate health benefits.
• A surge in competition among DPC providers, traditional insurance companies, and major healthcare organizations, driving down costs for consumers.
• The emergence of DPC plans promoting socio-economic disparity, as physicians may charge higher rates for patients with more complex medical conditions.
• Legislative actions by state or federal government agencies to prevent discrimination against minority or special needs patients in DPC subscriptions.
• Enhanced patient-physician relationships due to more personalized care, improving overall health outcomes.
• Reduced administrative burdens on healthcare providers, leading to potential cost savings and efficiency gains in medical practice.
• A shift in medical professionals' career choices towards DPC practices, possibly affecting the distribution of healthcare providers across different models.
• An increase in healthcare technology investments, particularly in telehealth and digital record-keeping.
• Enhanced focus on preventive care, leading to long-term reductions in healthcare costs and improved population health.

Questions to consider

• Are you enrolled in a DPC plan? What does it cover? 
• What are the other potential benefits and risks of DPC plans?