COVID-19 and Direct Primary Care’s strengths

Traditional medical practices have had to change their healthcare delivery approach in recent months, given the restrictions and safety guidelines imposed in response to COVID-19. In-person office visits have transitioned to telehealth sessions. Adherence to new Medicare regulations for reimbursement for these services has required adjusting billing codes and practice strategies. During all of these changes, one group of providers has been able to transition more smoothly and more effectively.

Direct primary care (DPC) providers are well-positioned to respond to the necessary changes in healthcare delivery during COVID-19. DPC’s strengths include:

  • Virtual office visits
  • Communication
  • Financial stability
  • Doctor-patient relationship

Telehealth

Most DPC providers are available for telephone and video consults, outside of practice hours, during “normal” times. As healthcare providers move toward telehealth during the coronavirus outbreak, these DPC providers are well-positioned to make those adjustments for all of their patients.

Given orders for staying at home and maintaining social distances, many traditional healthcare providers have shifted their delivery method to virtual visits, using telehealth options. The Centers for Medicare and Medicaid Services (CMS) has also adjusted, enabling physicians to bill for these services. However, providers are finding that they still have to follow “a slew of rules,” such as regulations regarding audio and video components of these patient encounters.

DPC providers do not rely on billing and reimbursement from third parties such as Medicare and so have much greater flexibility as to how they provide care for their patients. In addition, many DPC practices are already set up to provide web-based video consults, often embedded into their electronic health systems.

Telehealth provisions and the innate structure of the DPC practice is also better designed for keeping physicians, their staff, and their patients safe during COVID-19. Jeanette Williams, MD, a California-based DPC physician, says that “while many of my friends, family, and colleagues are worried about me as a ‘front-liner,’ the truth is that my system of practice with virtual communication and built-in care keeps everyone safer.”

Communication

DPC providers encourage their patients to contact them via email, text, or patient portal message between visits, to clarify diagnoses or to ask questions about treatment plans. Dr. Jacqueline Slakoper, a Board-certified Family Medicine physician and DPC provider, says “Secure text messages enable my patients to reach me directly during and after hours, including weekends. In traditional primary care, they would go through an answering service or an on-call physician who might not know their medical history.”

Dr. Slakoper adds that these communication strategies have benefited her patients in many ways. “Constant and easy access to my patients has allowed me to be able to talk them through their concerns with the advantage of knowing them and their medical history. I am therefore able to ease anxieties and help reduce the over-burdening of ERs with patients who are not truly a risk.”

Learn more about tools for communicating effectively with your patients.

Financial stability

The DPC model is based on monthly membership fees, rather than fees for each visit. DPCs, for the most part, do not accept insurance, including Medicare. The model enables DPC practices to continue functioning through the coronavirus outbreak, providing care to their patients virtually, not stressing over properly coding telehealth services or waiting for fee reimbursements.

DPC practices also have lower overhead, with fewer employees, improving their ability to be financially prepared for the current crisis and financially stable on an ongoing basis. Deborah Sutcliffe, MD, a DPC physician in California, is treating most of her patients using telehealth options during COVID-19. Dr. Sutcliffe says, “Knowing that my practice is financially secure is something that would not have been possible four years ago.  Now I can assure my medical assistant that she will be paid regardless of how many hours we keep the office physically open.”

Doctor-patient relationship

DPC providers have always enjoyed a close relationship with their patients. During the coronavirus pandemic, that relationship is increasingly important for the patients.

Dr. Slakoper explains that “Having the access to and the relationship with your personal primary care provider leads to better outcomes and healthier lifestyles. No one could have imagined that our commitment to delivering the right care, at the right time, in the right setting would show its value in a situation like COVID-19.” She adds, “We are thankful to be able to provide our patients with some level of consistency and reliability amid a worldwide health crisis.”

Julia Burgess
May 6, 2020

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Why Direct Primary Care is the future

Returning to the “old fashioned” concept of direct access to a physician, extended office visits, and a personal relationship in which the physician and patient are able to truly engage with each other, direct primary care (DPC) has established itself as the wave of the future in healthcare. DPC is becoming more popular with patients concerned about rising healthcare costs and the decreasing amount of time they spend interacting with their physician. Even hospitals are looking at DPCs as options for their own employees.

The DPC model was launched in the late 1990s as a return to the days when physicians provided personal service to their patients. DPC practices charge a monthly membership fee that typically covers all basic primary care services. Some practices also include labs as part of the fee or offer reduced prices on such services. Depending on the state’s laws, some DPC physicians also dispense prescriptions from their offices to save the patient money and offer more convenience.

DPC Frontier estimates that there are currently 1243 DPC practices in the US, up significantly from the 125 practices operating just five years ago. They also state that approximately 250,000 patients are participating in a DPC practice, a number that has also increased significantly from the roughly 6,000 DPC patients five years ago.

Learn more about the largest EHR for Direct Care practices

A survey conducted in 2018 of 398 physicians (148 of whom actively practiced in a DPC model), found that:

  • The vast majority of DPC practices represented in the survey were in their infancy, having been open three years or less.
  • They’re also still growing. Only 17% reported a full patient panel (the average panel size was 345 patients, and the average target was about 600).
  • The majority of respondents in DPC clinics charge individuals $50-$75 per month and families less than $175 per month.
  • Eight-seven percent of surveyed DPC practices do not charge a per-visit fee.
  • Roughly 80% are either currently participating in or are negotiating employer-based contracts.

Those employer-based contracts may soon include a number of hospitals across the country. A recent article published by the American Hospital Association (AHA) asks, “Would providers benefit by experimenting with DPC programs for their own employees?”

Catholic Health Initiatives (CHI) is one major healthcare system that began offering DPC care to a small group of its employees in 2017 and the results have been positive. CHI CEO Cliff Robertson, MD, stated that the DPC model enables primary care physicians to take a needs-driven approach rather than being driven by a reimbursement model. Robertson firmly believes that DPC plans are the future of primary care.

Physicians are seeing the benefits of the DPC model from their perspective as well as from the patient’s. Dr. Todd Rice recently experienced a challenging and expensive diagnosis and treatment plan as a patient of a large medical group. After researching the DPC option, he found that “despite a monthly fee, DPC pays for itself (and then some) in many forms of savings and benefit.” He concluded that “DPC may be medically superior as this model allows physicians the time and flexibility to know their patients and accommodate their needs.”

Julia Burgess
April 23, 2020

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Physician loans and direct primary care practices

Starting or expanding a direct care practice is an exciting prospect. Whether you are launching a completely new practice, converting an existing traditional practice to the direct care model, or expanding your current direct practice to accommodate more services and more patients, you will need capital to ensure the project progresses smoothly. If you are considering a loan for that capital, there are some considerations you’ll need to keep in mind before signing the paperwork.

As a direct care physician, your revenue depends on patient membership fees. The good news is you can prepare a predictable budget based on those monthly fees, rather than attempting to project potential insurance reimbursement fees. If you decide to pursue a loan for your startup or expansion, you will need to include calculations for repayment of that loan in your budget. If you decide to fund the startup or expansion from your existing revenue, you will also need to include that amount in your practice’s budget.

Need help starting your direct care practice? Check out Elation’s Direct Care Playbook!

Consider options that might reduce the costs involved in your practice startup or expansion before deciding whether to secure a loan. Funding needs could include equipment purchases, payroll, or securing a new facility.

  • Payroll: While payroll is a steady figure that must be met, you can review your staffing needs to ensure that you have not overstaffed your practice.
  • Equipment: Look at options for equipment such as purchasing used items or leasing instead of buying. For example, hospitals sometimes sell older, although still properly functioning, equipment as they invest in new technology.
  • Furniture: Office furniture can also be purchased at a deep discount from other medical practices or by shopping consignment stores. As long as your equipment and your furnishings work for your needs, they do not necessarily have to be new – or expensive.
  • Location: Review your practice location needs. While a brand-new building with extra space might be enticing, if you are in startup mode you may need to scale back your plans until you are more financially secure. Determine your goals for what your patient load should look like to run your practice efficiently, then look for a facility that you can afford and that meets those needs.

If you decide you do need a loan, you have some options. Your practice is considered to be a business so you can work with the Small Business Administration (SBA) on a more affordable loan than you might find with a traditional lender. The SBA offers competitive terms, counseling and education on running a business successfully, and unique benefits such as lower down payments, flexible overhead requirements, and no collateral needed for some loans.

Review your financial considerations before deciding to pursue a loan. After a close examination of your revenue and your expenses, you may realize you do not need to go deeper in debt to finance the startup or expansion of your direct care practice. However, if you do pursue a loan, check out your options realistically and work with a funding agency that will help you meet your needs and your patients’ needs.

Julia Burgess
March 31, 2020

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How to educate communities on Direct Primary Care

Even though the Direct Primary Care (DPC) practice model is structured in a straight-forward manner that harkens back to the day of the traditional family doctor, many patients still struggle with the concept. Insurance has been a major factor in primary care since the middle of the 20th century, so most people today do not remember a time when they paid the physician directly rather than going through an insurance company for healthcare coverage.

Educating your community about the DPC concept and about your practice involves a number of activities, many of which can be done at no or little cost.

  • Start with your current patients: If you currently operate in a traditional model practice and are transitioning to a DPC, take the time to speak with your patients about the new concept. They will then, in turn, share the information with their contacts. Word of mouth is the best way to get the word out! Prepare informational sheets to distribute at the office and a mail or email campaign to educate patients as to what the DPC practice will be like. Include potential disadvantages for them in addition to highlighting the benefits, so they will have a true picture of your new practice.
  • Use your website: Include an educational section on your website. Write blog posts that highlight the various aspects of DPC, particularly those benefits you are able to offer through your practice. Include downloadable copies of those informational sheets you prepared for your patients. Did you know that awareness and interest are at the top of the Marketing Funnel for a DPC?
  • Use social media: Write posts that educate those in your community as to how a DPC works and what some of the benefits and drawbacks may be for patients and potential patients. Use hashtags that will entice readers and keep the content informative.
  • Get involved in your community: Sponsor business events and local sports teams. Speak to community interest groups. Offer to host a workshop for service and civic groups. Keep the information you share educational rather than promotional.
  • Contact local media: Your practice operates under a unique concept. Particularly if you have just opened a practice or have transformed a traditional practice to a DPC, you might have an interesting angle for a local newspaper or television station. Include just the facts and point out the educational benefit of such a story.

Educational efforts can pay off, with little to no cost to you and your practice. Patients will actually be more likely to trust the information they receive that has been disseminated through non-paid methods, particularly if they are learning something new and can see the benefits of that information.

Julia Burgess
March 13, 2020

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Direct primary care physicians guide to 2020

Direct primary care (DPC) is a growing practice model, as more physicians are realizing the benefits and more patients are understanding how a DPC can work for their healthcare. There are some challenges for DPC physicians and their patients, however, many of which are the subject of federal and state legislation efforts in 2020. Other areas for DPC physicians to watch in 2020 include a more intense focus on prescription and healthcare costs.

Growth of DPC practices

The DPC concept first launched around the turn of the 21st century. Data regarding the number of practices and patients dates back to 2014, when 125 practices and 5,988 patients were recorded. In the past five years, the number has climbed to over 1,000 practices in 49 states caring for approximately 500,000 patients and will undoubtedly continue to increase in 2020.

What technology does your DPC need to be successful? Learn more!

HSA legislation

DPC patients currently are not able to use their Health Savings Accounts (HSAs) to pay their DPC membership fees, as the Internal Revenue Service (IRS) considers the DPC model of care to be a type of health insurance. The Primary Care Enhancement Act of 2019 is designed to change that. Also known as HR 3708, the act’s intent is to “amend the Internal Revenue Code of 1986 to allow individuals with direct primary care service arrangements to remain eligible individuals for purposes of health savings accounts, and for other purposes.”

State legislation

Many states are introducing their own legislation to have DPC recognized as “not insurance,” including Maryland, South Carolina, and Minnesota. While Colorado has already passed such a law, the state’s Medicaid patients are still prohibited from privately contracting for any “covered services.” CO HB1140, introduced in January with a hearing expected in February 2020, “prohibits the department of health care policy and financing (department) from denying a Medicaid recipient the right to purchase direct primary care services or enter into a direct primary care agreement.”

Tennessee’s TN HB 894/SB 696 requires the state’s Finance and Administration Department to “study the feasibility of adding direct primary care as a covered benefit under one or more of the basic health plans approved by the state insurance committee for eligible state employees.” The legislation was introduced in 2019 and is expected to be carried over to 2020.

Employer healthcare costs

Healthcare costs continue to rise for employers who provide coverage to their employees as a benefit. A survey conducted by the nonprofit National Business Group on Health (NBGH) found that larger companies estimate that their health care costs will increase a median of 6 percent in 2020. Premiums and out-of-pockets costs will increase from $14,642 to $15,375 per employee in 2020.

DPCs have the opportunity in 2020 to promote their healthcare services as a less expensive and more effective benefit to these employers, particularly as approximately 41 percent of those surveyed said they would be using cost-management tactics to reduce their projected health plan cost increases.

Julia Burgess
March 5, 2020

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DFW Direct Care Dinner Event

Salad, salmon, and electronic health records (EHRs) were the menu highlights at the recent Direct Care Dinner hosted by Elation Health and facilitated by Dr. Darin Charles. Held at the Winewood Grill in Grapevine, Texas, the dinner event focused on the operation and the benefits of direct care and EHRs in the Dallas-Forth Worth area.

Dr. Charles launched his direct care practice, Hometown Health with the goal of offering the same level of care to his patients as he does for friends and family. He says that “by eliminating the complications of insurance, and implementing the latest technology,” he is able to provide high quality, personalized care with “immediate access, superior communication and expanded appointment times, with complete transparency, at a reasonable cost.”

The Direct Care DFW Dinner Event, held on February 5, 2020, also featured remarks from Elation’s Direct Care Growth Manager, Gabby Marquez, and Direct Care Growth Specialist, Julia Burgess. Throughout the evening’s presentation, Dr. Charles focused on several key topics, including the importance of:

  • Establishing a solid membership price, emphasizing that direct care physicians need to “know your worth”
  • Balancing the amount of individual memberships with employer contracts
  • Establishing a budget for the first year of operations in a direct care practice.

Operating a successful direct care practice requires planning, financially as well as in terms of patient panel size. The attraction of direct care to the patient is the simplicity of the model and the affordability of the membership fee, but the provider is running a business and needs to be sure it can be sustained.

Hometown Health provides direct care services to small businesses as well as individuals. Many direct care practices work with businesses to provide healthcare to their employees, particularly as healthcare costs continue to rise. Using the right EHR solution can also make a significant difference in the quality of care provided to those businesses.

Dr. Charles emphasized the need for quality technology as a communication tool and as an effective tool for providing value-based care to all of his patients. He did an amazing job during the dinner event, facilitating conversations and giving a very informative and content rich presentation about his direct care practice and his route to success as an independent physician.

The great turnout at the dinner event included experienced physicians as well as those just launching their practice. One attendee noted with excitement, “As a new practice I would highly suggest using Elation. It is by far the best EMR!” At Elation Health, we look forward to working with this provider and many others who will soon be making the switch.

Julia Burgess
February 22, 2020

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Setting up direct care practice administration and logistics

The practical aspects of setting up your practice administration involve considerations regarding finances, staffing, banking, and other areas of your practice that are more directly related to the business operations than to actually seeing patients. To accomplish many of the steps, you may need to work with a professional such as a lawyer or accountant.

The logistics of setting up your practice administration include:

  • Staffing and payroll. Once you decide who you need on your staff, you will need to set up a way to pay them. Determine how often you will issue paychecks, whether you will offer direct deposit, and whether you will use a payroll service or have one of your staff members be responsible for payroll.
  • Accounting workflow. As a direct care practice, you will need to manage incoming membership fees as well as accounts payable, such as payments for supplies or laboratory services. Set up a system of payments, including payment terms, to ensure you will have a profitable workflow.
  • Checking account / banking. To receive and make those payments, you will need to work with a bank to set up a checking account. You might need to enlist an accountant’s help to determine which type of account works best for your direct care practice. There are often fees associated with certain types of checking, but there can also be rewards such as with interest bearing accounts.
  • Business credit card. Some expenses for your direct care practice may require you to have a credit card. For example, if you are ordering supplies or purchasing an item from a store, either online or brick and mortar, you will probably need a credit card to complete the transaction. Work with an accountant or your bank to determine which business credit card is best for you and your practice.
  • Financing / capital. You will need start-up capital, to purchase equipment, to lease or buy office space for your practice, and to fund your initial payroll. Again, you might need to work with an accountant to run the numbers so that your start-up requirements are minimal. If you are not sufficiently funded, you will need to work with your bank on an appropriate financing plan.
  • Electronic health record (EHR) system. The right EHR for your direct care practice “will serve as a one-stop system for your patients’ records and histories, communications with other providers, lab and prescription orders, and information on your revenue cycle.”

Julia Burgess
February 18, 2020

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What to consider when finding a DPC practice location

Starting or expanding a direct primary care (DPC) practice involves many considerations. You will have to think about staffing and marketing your practice. If you’re converting to a DPC from a traditional practice, you’ll need to communicate with your patients as to the details of the transition. If you’re opening a new practice, there will be a lot of work to do to educate people in the community about the DPC model. One of the most important things to plan is where your DPC practice will be physically located.

Some things to consider in finding a practice location include:

  • Office size. Direct care practices often need smaller spaces than traditional practices because patient loads are lower.
  • Proximity to other healthcare providers. The location of referral practices and competition are considerations when determining a location for your own practice.
  • Cost. Budget is a significant factor in your choice of locations. Undercapitalization is the number one reason for business failure, so make sure to have the proper capital to not only obtain office space but get your office up and running.
  • Renting or buying. Renting, at least in the beginning, means more flexibility and less risk. You may decide the location is not right or that you need to expand in the future. Moving is a little less complicated when you rent a space.
  • Traffic and parking. Consider whether your patients will have to deal with major traffic jams around your office and whether they will have plenty of available parking.
  • Visibility. Direct care practices that are accessible and highly visible retain more patients and have an easier time attracting new ones.
  • Convenience for patients. Determine your geographic target market. Will your new office location be convenient for them? Is it on a bus line? Is access into and out of the office easy?
  • Convenience for you. You want your office close enough to your home so that you can get there quickly if needed. You also don’t want the added stress of traffic jams or challenges with getting in and out of your parking lot.

Elation Health can help you determine the right
electronic health record (EHR) for your new DPC practice!

Once you’ve found a great location for your DPC practice, you’ll also need to consider how to set up and decorate the interior as well as any parts of the outside you can control, such as signage and landscaping. Maintaining a physical appearance that is in line with the branding message you are sending your target patients is important.

Timing is a consideration as well. Typically, the process of securing office space and filing paperwork takes approximately 6 months. It’s important that aspiring direct care doctors are prepared to devote that amount of time to starting their new practice.

Julia Burgess
February 6, 2020

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How to draft a business plan for a new DPC practice

An independent practice is a business. A direct care practice, in particular, needs a solid business plan that addresses the details of operating productively. A business plan includes financial projections as well as plans and goals for patient panel size, practice location, and other logistics necessary to run a successful practice. Drafting a business plan for your new practice requires research, forecasts, and realistic objectives.

Given the financial structure of the direct care practice, careful planning can help ensure the practice’s success. Elements of a business include:

  • Practice location
  • Membership pricing structure
  • Patient panel requirements
  • Staffing requirements / plans
  • Marketing plan
  • Partnerships with other healthcare providers
  • Financial projections
  • Short-term and long-term goals

Be sure to include a plan for optimizing technology, especially electronic health records (EHRs) in your new practice.

As you draft a business plan for a new direct care practice you will need to determine where you want your practice to be located. Is there an area in your community that has a need for your services? What is convenient for your target patient population?

Setting your membership pricing structure will require financial planning and projections. Some factors to consider are time, variable costs, and overhead (including the cost of growing the practice). Will you offer reduced fees for children and the elderly? You will also need to determine whether you will accept any type of insurance, including whether to accept Medicare patients. Pricing and financial projections will also need to include your ideal patient panel size, both now and when growing your practice.

The marketing section of your business plan will include a section on how to educate patients about the direct care model. Include how you will create a website, how often you will post on social media, and if you need to contract with a professional to help you with outreach and promotional efforts.

The key to drafting a business plan is to be realistic and to treat the plan as a living, usable document. Be realistic about the potential patient base in the location you’ve chosen for your practice as well as in your financial projections and planning. There will be a ramp-up period for a new practice, so include realistic start-up costs, promotional costs, and staffing costs. Then project your growth based on comparisons with other independent practices in your area and on the population you will serve.

Use the business plan to track and manage your business on an ongoing basis. It is not a document to be completed and put on a shelf. Your business plan will be your guide to managing a successful practice and to planning your growth as a direct care practice.

Julia Burgess
January 28, 2020

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How can direct care physicians use video to engage patients?

Communicating with patients is critical for ensuring they understand their diagnosis and follow-up care thoroughly. Often, patients will have questions or will not remember the details of their conversation once they leave the physician’s office. At other times, it may be necessary for the direct care physician to provide the same information to multiple patients. Engaging those patients with video may be the best solution, to ensure the information is properly disseminated and retained.

In the direct care physician’s office, patients may indicate they understand instructions or explanations. However, once they return home they may realize that they didn’t quite get everything that was conveyed verbally or on a piece of paper. Access to a video will help those patients review the information multiple times, until they are comfortable with their understanding of the content.

Videos can also be recorded in multiple languages. For a direct care patient whose first language is not English, a video recorded in their native language could be critical for the physician to engage with them. Likewise, for patients who may be challenged with hearing or comprehension difficulties, a video could be the solution for the direct care physician to engage with them in a more meaningful way.

As the trend toward remote healthcare, including telehealth, grows, videos will also become an important tool for engaging patients who cannot or prefer not to visit the direct care physician’s office. Engaging telehealth patients through video will become a critical aspect of their care as the direct care physician reaches out to provide healthcare through emerging virtual services.

Preventive care is particularly suited to videos. The direct care physician can record videos of various aspects of preventive care and make those videos available to patients on a website, through patient portals, and in the practice’s waiting area. Preventive care videos would emphasize those activities that contribute to the patient’s overall health, engaging patients in their journey toward positive healthcare outcomes.

Julia Burgess
January 21, 2020

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