Growth and churn in DPC practices

The direct primary care (DPC) model has been steadily gaining in popularity over the past several years. There were approximately 1200 DPC practices across the US in late 2019, covering 48 states and Washington DC. According to the DPC Journal, the growth of these DPC practice models is “on the rise at an incremental pace each year.”

The Journal sees additional growth opportunity for DPC physicians in the Generation Y, or Millennial, population of patients. This group of younger patients tends to be “always looking for something new and better.” If DPC providers can further innovate their delivery models, they could have a positive impact on their growth.

Learn more about marketing your DPC practice successfully.

Churn in a DPC practice can affect the provider as well as the patients. The possible consequences of churn include care access challenges for patients, as described by the National Academy for State Health Policy (NASHP). Those individuals who churn between different sources of health coverage or become uninsured are unlikely to have a regular source of care, which can result in individuals not receiving preventive care or necessary treatment for existing health conditions. This could be particularly problematic for individuals with chronic and complex health conditions.

On the provider side, churn means that the practice will have to plan strategically for a target patient panel. Dr. Paul Thomas with Startup DPC suggests that a target panel of 600 patients can be reached in about 24 months, given an average of 25 new members each month with zero attrition. However, the reality is that there will be attrition. Even with an attrition rate of five per month in the given scenario, it would take two and a half years to get to a full panel of 600 patients.

DPC experts believe it will take even longer to reach the target patient panel number. Dr. Ryan Neuhofel is a successful DPC physician who state that “it will take you 1,000 patients to get to 600,” based on the following, more realistic scenario:

  • You enroll 28 new members each month for 36 months
  • At the end of that 3-year period, you’ll have 1,008 patients
  • If your attrition rate is 11 patients each month, you’ll have lost 396 patients over the 3 years
  • At the end of 3 years of member growth and churn, you will have a full panel of 612 patients.

The average reported current DPC patient panel size in a Society of Actuaries (SOA) 2020 study was 445, while the average target panel was 628. The average ratio of the current to target DPC patient panel sizes was 70% (i.e., on average, the current DPC patient panel was 30% below the target). For those DPC practices with a full DPC patient panel, the average length of time to fill the panel was 21 months.

The SOA study also found that about 70% of respondents’ DPC practices were established in the last four years, indicating that the model is growing in recognition and popularity but is still in its infancy. The DPC model has been particularly popular during the COVID-19 pandemic, as DPC practices were already prepared for and set up for innovative practices such as telehealth. The financial model has also proven more stable during the uncertain times of the coronavirus outbreak.