5 Criticisms of Direct Healthcare - And Why They're Wrong
D.D. Johnice
I develop partnerships, products & services that create equity, sustainability and growth | Health equity advocate
The American Academy of Family Physicians (AAFP) defines Direct Primary Care (DPC) as a practice and payment model where patients/consumers pay their physician or practice directly in the form of a flat monthly or annual fee, under terms of a contract, in exchange for access to a broad and enhanced range of primary care and medical administrative services, including real time access via advanced communication technology to their personal physician, extended visits, in some cases home-based medical visits, and highly personalized, coordinated, and comprehensive care administration and annual labs.
The AAFP supports the DPC model, both for family physicians for whom the revenue model can stabilize practice finances, allowing the physician and office staff to focus on the needs of the patient and improving their health outcomes rather than coding and billing; and for patients, who benefit because the contract fee effectively removes any additional financial barriers the patient may encounter in accessing routine care primary care, including preventative, wellness, and chronic care services.
The model also extends beyond primary care where it is employed by specialists like dermatologists and psychologists whose services are not fully covered by insurance, by dentists who've established in-office plans, even by surgical centers and hospitals that allow patients to receive bundled treatments with discounts for pre-payment. At the Wonder Guild, we call this broader model Direct Health Care, or DHC.
And we are investing in developing a platform that scales and systemizes DHC so that it can serve millions of consumers nationally while providing support and resources to ensure physicians and providers can affordably, equitably meet 90%+ of their patients' healthcare needs, remaining independent without becoming an island.
We love the potential of DHC but the model has its detractors. Here are their most oft-cited criticisms.
1. No, Direct Health Care won’t exacerbate the provider shortage.
Honestly, almost everything about the US healthcare system will exacerbate the projected provider shortage. But direct health care doesn't even make the top 100. Here's why.
The American Association of Medical Colleges (AAMC) projects a shortage of 54,100 and 139,000 primary care physicians by 2033 (74,100-145,500 primary care physicians if barriers to access are removed and demand from underserved communities is included). Shortages among physicians in non-primary care specialties are expected to reach up to 60,300 (e.g. psychiatrists, surgeons, and ophthalmologists). These projections are based on:
Additionally, there is a deep misalignment of moral, professional, and financial interests between primary care physicians and health system and insurance leaders in the healthcare system.
So, it is by staying our current course that we ensure we have have a physician and provider shortage—and that the gap widens. The DHC model offers an opportunity to retain physicians and providers in the healthcare system where they can care for patients and take care of themselves.
2. No, DHC won’t remove physicians/providers from the healthcare system.
Many have bemoaned that direct primary care “takes primary care doctors out of the system”. Not true. The System is more than the sum of the assets and employees of governments, payers, hospitals, and health systems. We’ve lauded and welcomed the addition of retail clinics ( Walgreens , CVS Health ), concierge clinic chains ( Amazon Clinic , Forward ), virtual clinics ( Maven Clinic ), at-home urgent cares ( DispatchHealth ), and countless Medicare-focused wraparound service companies into the system even though they, of necessity, hire physicians and other providers away from traditional players, offering them higher pay and equity, leadership roles (e.g. Chief Medical Officer), flexible work, and lower administrative workloads. Is this more acceptable because these new players ultimately rely upon the old way of getting paid—payments from insurers or employers?
If we don’t embrace direct primary care (and, more broadly, direct health care) as simply another way to provide and access care, we not only risk continued loss of primary care physicians and providers but also the opportunity to truly align patient and provider interests.
3. No, DHC will not reduce access to high-quality care.
In many cases health equity programs boil down to efforts to lower costs and increase access. If detractors accept that DHC does not physically remove physicians and providers from the system, their follow-up argument is that the smaller panel sizes managed by DHC physicians and providers has the same effect.
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Under the DHC model, primary care physicians have an average panel size of 600-800 patients compared to primary care physicians in traditional practice with 2500-3000 patients. Prima facia it appears that smaller panel sizes further restricts access to care. But, a study by the University of California at San Francisco’s Center for Excellence in Primary Care determined that if a primary care physician does everything herself—screening, counseling, immunization, drug prescription, routine chronic care plus treatment of acute conditions—working 43 hours a week for 47.1 weeks a year, she can accommodate a maximum panel of 983 patients.
Studies have also shown that primary care physicians with 2500-patient panels do not have enough time to provide the guideline-recommended primary care (preventive, chronic disease, and acute care), even with team-based care. So, it’s more likely that direct primary care physicians’ panel size is optimal if the goal is to prioritize the provider-patient relationship in order to better identify health risk factors and provide timely, high-quality care at an affordable cost.
A recent study in the American Journal of Lifestyle Medicine found that direct primary care benefitted patients, providers, and employers. Patients get to spend more time with their doctors and rated their experiences more highly than those under traditional model. Patients, especially those who are uninsured or had a High Deductible Health Plan (HDHP), also saved 20% to 30% on annual healthcare spend by receiving 85% of their care in the low-cost DHC provider setting where they also had access to wholesale pricing on labs, imaging, and certain procedures.
Physicians experienced greater career satisfaction, less burnout, lower administrative burden, and gained financial stability. Employers saw a 54% reduction in ED claims, 25% fewer hospital admissions, and a 13% reduction in total cost of claims.
Another study by the Society of Actuaries and Milliman found that patients in the DPC models they studied reduced ED claims costs by 52%, inpatient costs by 8%, outpatient facility costs by 23%, urgent care costs by 19%, specialist visit costs by 15%, , home health care costs by 79%, and outpatient surgery costs by 5%.
So, if there is further restriction, it's a restriction of lower-quality, higher-cost care and an increase in higher quality, lower-cost care.
4. No, DHC will not increase individual healthcare costs.
The crux of this argument is that direct health care will debilitate into expensive concierge care that is only affordable and accessible to the few and the affluent. To be fair, that is the state of the entire healthcare system--so expensive that 27M people are uninsured and receiving little or no care and 43M have insurance but skip appointments and prescriptions due to cost.
That said, the concierge practice model is purpose-built to serve affluent consumers and businesses that can afford to pay luxury prices for on-demand and often elective medical and health care services--on top of their platinum health plans. In contrast, DHC plans were purpose-built to serve consumers who may not have or be able to afford health insurance or is likely to hold a high deductible plan (HDHP).
The DHC model has a built-in set of checks and balances that uniquely position the model to meet the needs of patients and physicians and providers. Physicians and providers get a raise, largely due to eliminating billing, admin, and reporting costs. Patients get 85%+ of their healthcare needs met for an average price of $70/month. It's affordable by any measure, but especially when you consider that the average salary for any person in the US is $59,428 (median $70,784). The cost of the average HDHP costs an individual 13.2% of their monthly income; the average cost of a DHC membership is 1.4%. Even if an individual held both a DHC membership and a HDHP, the entire cost would be easily offset by two, no-copay office visits or two labs run at wholesale prices.
Sure, DHC practices can and do charge more but there is a ceiling--the DHC consumer's ability to pay. This makes DHC far more accessible to far more people than other approaches to paying for care.
But I'd be remiss if I did not acknowledge that if more physicians chose to practice independently--DHC or traditional--it might cause health systems and hospitals to pay more for contract staff and they might pass on those costs to insurers who will pass them on to individuals and employers and thereby drive up pricing.
5. No, DHC will not increase inequities.
Additionally, when you consider factors that significantly limit access to and utilization of care—lower income, other cost-related barriers, lower rates of insurance coverage, limited access to comprehensive insurance coverage, fewer providers near home/work, racism—there are greater threats to the achievement of health equity:
Yes, DPC will get us closer to health equity.
DHC is affordable enough that consumers can pay for it, even if they don't have insurance or are underinsured. DHC memberships lower total healthcare utilization and cost of care by providing patients nearly unlimited access to their doctors. Physicians and providers can build small but thriving practices, even in rural or low-income communities, thereby removing transportation and convenience barriers for patients and incentivizing physicians and providers to locate practices in shortage areas. And, DHC, when coupled with expansion of practice authority for more diverse workforces like nurse practitioners, may also diversify the choice of providers available to a community.