Considerations for Direct Care pricing and service offerings

When launching a direct care practice, there are a number of decisions that have to be made, including where to locate the practice and how many staff members will be required for the practice to run smoothly. Two very important decisions focus on price and services.

Direct care practices operate on membership fees. Those fees must be structured such that the practice will operate efficiently and successfully, retaining and growing the patient panel. The membership fees must also be viewed by patients as affordable and as offering appropriate value. Direct care practices do not accept insurance payments so the membership fees will fund the operations in total.

Elation Health’s Direct Care Playbook offers guidance on setting membership fees that make sense for the practice and the patient. Membership fees range widely and can vary on an individual and family basis. Accounting for age, geography, and local patient demographics are all key inputs to effective pricing strategy.

Direct care physicians also need to decide how much they need to make to keep their practice afloat, and how much they would like to make in an ideal situation. This calculation can be accomplished taking:

  • Sum all expenses (salaries, office space, and all other operating expenses)
  • Divide by anticipated size of the patient panel

Assume a baseline of 300-500 patients per physician as an average panel size. This calculation will give a practice a break-even price point, and the physician can then consider desired take home pay as a final input in setting pricing for their practice. When choosing a fee schedule, consider the overhead of managing more complex pricing or if staff will have technology to support your chosen pricing schedule.

As to which services to offer, most direct care practices offer basic primary care services as well as treatment for minor injury or illness. Some even include diagnostic and laboratory services in the basic membership fees. Most direct care physicians will also offer “enhanced services” such as “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.”

The decisions as to which services to offer and the level of membership fees to charge are dependent on each other. The direct care physician must be able to support the practice with the membership fee revenue, providing services that patients need and want in a cost-efficient manner.

Gabby Marquez
May 22, 2019


The benefits of DPC for local governments

Direct primary care (DPC) can be beneficial to individual patients who want to reduce their healthcare costs while receiving quality primary care services. DPCs operate on membership fees so there is no middleman in the form of an insurance company. The DPC physician has been compared to the “old-fashioned” family doctor who develops a relationship with patients, understanding their medical needs, and being available for questions and clarifications outside the office visit.

DPC has also been shown to be effective as an employer sponsored health plan. Employers who are searching for ways to reduce their costs have found the DPC model to offer cost savings as well as a number of heath benefits for their employees.

Likewise, local government can see the same benefits of a DPC arrangement for employees. One of the best examples of county employees being offered a DPC as a health benefit option is in Union County, North Carolina. The county began offering a DPC option to their employees in 2015. The employees’ other option is a traditional health insurance plan with a reimbursement account.

Statistics from 2018 demonstrate that the DPC option has been a success for employees as well as the county government. Jordan Roberts, a Health Care Policy Analyst, found that those Union County employees who opted for the DPC healthcare have cost the county 26 percent less per member per month than those covered by traditional health insurance.

Of those county employees participating in the DPC option, “99 percent of participants reported a positive overall experience, 99 percent of participants reported high satisfaction with provider access, and 97 percent of participants reported a high level of trust in the care they received.”

Additional measures of DPC benefits for local governments include the employees’ opinion of their employer. Roberts notes that “77 percent of employees said that their opinion of their employer had improved since Union County offered a DPC option.”

The county employees who opted for DPC coverage felt that they spent more time, almost double in fact, with their DPC physician than they had with their traditional primary care physician. One of the advantages of the DPC model is the fact that the DPC physician typically has a smaller patient panel and is more focused on developing a relationship with each patient. The majority of the Union County employees also reported that they felt their health had improved since taking advantage of the DPC option offered to them by their local government employer.

Gabby Marquez
May 22, 2019


Direct primary care and patient engagement

Independent physicians tend to launch direct care practices out of a desire to spend more time with their patients. They might convert an existing practice, leave a bigger practice, or start a new practice based on the direct care model which typically ensures they see fewer patients during the day.

Part of the challenge of the current physician burnout issue is the sheer numbers facing the provider. In a traditional practice model, the independent physician may feel pressure to see more patients during the day, to meet insurance reimbursement requirements and to cover the practice’s overhead. As described in a recent Forbes article, “A major cause of burnout is ‘bureaucratic drag’ – a toxic amalgamation of administrative demands that erodes the physician-patient relationship. It’s time spent on getting approval from insurance companies to prescribe medications or request an MRI.”

In the direct care model, as the name suggests, the independent physicians works directly for the patient. There is no middleman, specifically insurance companies, to determine how much time the physician can spend with each patient or how many patients the practice needs to see during the course of the day.

Based on patient membership fees, the direct care practice has less overhead than a traditional practice. The physician has more control over time spent engaging with each patient, including time outside the office visit. Patients may communicate with the physician before or after the appointment, to clarify instructions or to ask questions about their plan of care.

As described by the AAFP, “The opportunity to spend more time interacting with patients and providing ongoing follow-up services is at the heart of the patient-centered care provided in DPC practice settings.” The organization continues to emphasize that “because DPC physicians are no longer generating revenue solely on the basis of how many patients they see per day, many report that they have significantly more time to spend with patients in face-to-face visits.”

Patient engagement can play a key role in that patient’s healthcare outcomes. The direct care model enables the physician to actively engage with each patient, spending as much time as needed to ensure the patient is receiving proper care and following those care instructions.

Krystle Thornton
March 5, 2019


The cost-savings for direct primary care patients

Healthcare costs, including insurance premiums and out-of-pocket costs, are of concern to most patients in the US. The Centers for Medicare & Medicaid Services (CMS) reports that US healthcare spending grew 3.9 percent in 2017, reaching $3.5 trillion or $10,739 per person. Healthcare spending accounted for 17.9 percent of the country’s Gross Domestic Product in 2017. One option for the cost-conscious patient is the direct primary care (DPC) model, which will save the patient money while providing high quality primary care services.

Direct primary care practices operate on membership fees. Patients pay a monthly fee, typically in the $50-$100 range, that covers all of their basic primary care services. Many DPCs also include laboratory and x-ray services in the basic monthly fee and offer reduced prices on prescription drugs and other healthcare services. DPCs do not accept insurance but generally encourage patients to maintain high deductible, catastrophic insurance.

The cost savings for patients in DPCs have been detailed by Consumer Reports in a recent article discussing smart money strategies for 2019. The article states that DPCs “can be cost-effective and convenient for people with chronic health problems that need close monitoring, such as diabetes, high cholesterol, and hypertension.”

DPC physicians also make themselves available outside the office visit, responding to communication or even making house calls when necessary. These extra services contribute to the added value of a DPC practice. In particular, “for people who make frequent appointments with their primary care doctor, joining a DPC could cost less than using the coverage provided by a traditional insurance plan.”

DPCs are growing in popularity with cost-conscious and health-conscious patients. Consumer Reports cites industry estimates that indicate there are “more than 900 DPC practices across 48 states and Washington, D.C. … up from 273 locations in 39 states in 2015.” Approximately 500,000 patients are currently enjoying cost savings and receiving quality care as part of DPC practices.

Krystle Thornton
February 19, 2019


How to address DPC objections

The direct care model of medical practice is often misunderstood, to the point where those who are not clear on its structure or purpose may pose a series of objections to the independent physician in a direct care practice. Providers who choose to transition their practice from a traditional model to a direct care practice, in particular, may face questions about why those chose to do so.

Rob Lamberts, MD, a board-certified internist and pediatrician who runs Dr. Rob Lamberts, LLC, a direct primary care practice in Augusta, Georgia, and who is an Elation Health Clinical EHR user, offered his own experience with objections as well as ways in which to address them, in a recent article in Medical Economics.

Common objections to the direct care model include:

DPC is elitist. The direct care model of medical care is often associated with concierge medicine. Those who are unclear as to the concept may confuse the idea of a concierge physician, who charges somewhat higher monthly fees, with the idea of a direct care provider, who typically charges between $35 and $75 per month. In fact, direct care practices usually discount their monthly patient membership fees depending on age and, in Dr. Lamberts’ case, the patient’s ability to pay.

DPC is not scalable. The direct care physician tends to have a smaller patient panel. Dr. Lamberts went from approximately 3,000 patients to 750 in his practice when he transitioned to direct care. The quality of care that a direct care physician can provide patients is significantly higher, however, as the provider has the opportunity to spend more time with each patient. As Dr. Lamberts states, “what is more valuable to society: giving poor care to 3,000 people or excellent care to 750?” in addition, Dr. Lamberts points out, “DPC is far better for the doctors, and will likely slow the burnout rates afflicting primary care at this time.”

What happens when patients need specialty or hospital care? Direct care patient membership fees cover basic primary care services. Labs and discounted prescriptions may also be included, depending on the practice. Patients are encouraged to carry high deductible insurance for catastrophic events such as hospitalizations because the direct care physician offers patients high quality and affordable healthcare, which “can (and does) reduce the need for specialty care, ER visits, and hospitalizations, but it doesn’t eliminate it.”

Dr. Lamberts concludes that direct care “takes a number of steps towards some desperately needed changes (in the healthcare system): lower cost, less over-utilization, happier doctors and healthier patients.”

Krystle Thornton
February 6, 2019


The power of the Elation DPC network & DPC partners

Direct primary care (DPC) physicians need an electronic health record (EHR) system that enables them to manage their practices, maintain accurate and easily accessible patient records, and spend more time with their patients. Online billing, payment, and appointment capabilities are also critical to a successful DPC practice. Integrating partners to provide these features in one EHR solution is the key to Elation’s ability to give DPC practices what they need.

At Elation Health, we work with industry partners to offer DPC physicians a complete solution for their practice management:

Hint – offering advanced enrollment, billing and growth analytics services. Integrating with Hint enables Elation to provide DPCs with a “highly customizable enrollment, billing and eligibility management engines (that will) let you design and automate complex consumer and employer plans in minutes.”

Spruce – boasting “Modern care that providers, patients, and employers love,” Spruce’s features enables Elation to integrate “communication and care for the 21st century” into our EHR solution.

Hale – a remote care platform that lets clinical teams streamline triage, automate follow-up, and increase practice capacity – all while delivering an incredible patient experience.

KPI Ninja – offering a “portfolio of cutting-edge analytics solutions” and focusing on issues of particular concern to DPC physicians, such as population health, Elation integrates with KPI Ninja on capabilities from “identifying social determinants of health to measuring health outcomes.”

Health Biller – integrating direct care practice management as well as patient data enables Elation to provider DPC physicians with a practical and comprehensive EHR solution.

Elation is about building a technology platform that doctors and patients use because they want to use it. Because they trust it. Because it improves the quality of care. Because it makes them more productive and more effective. And most of all, because it deeply respects that the heart of healthcare is the doctor-patient relationship. Integrating with industry partners enables us to provide the highest quality EHR solution for our DPC clients.

Krystle Thornton
January 28, 2019


What kind of patients could benefit the most from DPC and concierge care?

The direct care and concierge care models may not be the right fit for all patients. These practice models differ from each other as well as from traditional primary care practices. Typically, the direct care practice offers basic services for a monthly membership fee of between $50 and $100. Concierge care is a bit more expensive and offers more personalized services for its patients. Certain types of patients might benefit more from participating in each of these primary care practices than in the traditional model.

The direct care model is growing in the US, with almost 900 practices now providing quality healthcare to patients. Direct care physicians focus on their relationships with their patients, getting to know them and their needs and preferences through direct interactions during the visit as well as outside normal operating hours. Direct care physicians have been known to make house calls and make themselves available to communication from patients via electronic modes and direct calls.

Patients who desire this type of personal medical service will benefit from either direct care or concierge care. Those who tend to need more primary care services, perhaps because of a chronic or complex condition, will also benefit from participating in a direct care practice. Basic primary care services, including x-rays and some laboratory tests, are covered under the monthly membership fee. Many direct care practices also offer reduced costs for prescriptions and wellness services.

Most direct care physicians do not accept insurance but do encourage patients to carry high-deductible insurance for services not covered, such as hospital admissions. For patients who already have high-deductible insurance plans, enrolling in a direct care or concierge care practice will benefit them financially. Older patients, especially, may see significant cost savings. A survey conducted by the Concierge Medicine Research Collective found that “people age 50 and older make up an increasing share of patients at most concierge practices.”

Consumer Reports states that, according to the Kaiser Family Foundation, “Three-quarters of those with employer insurance have co-pays (out-of-pocket fees per office visit) for primary care that average $25, and one-quarter have co-insurance (a fee based on a percentage of cost of a visit), which averages 19 percent. And 81 percent have deductibles that average $1,500 before insurance kicks in.”

Patients who visit the primary care physician often and who are concerned with the costs of their healthcare coverage will certainly benefit from the direct care and concierge care structure, both in terms of financial savings as well as healthcare outcomes.

Krystle Thornton
January 22, 2019


What are all the online tools DPC physicians need?

Direct care physicians tend to be heavy users of technology in their practices, due to the demands of retaining patient memberships. Practices need access to a wide-range of technology and services, from patient marketing platforms to labs and imaging services. Which technology is optimized for and best suited to meet the needs of direct care practices? Physicians should ask themselves:

  • Can I document visits without any mandatory billing and quality reporting workflows?
  • Does this platform have integrated practice management tools?
  • Can I leverage patient engagement features?

The electronic health record (EHR) is a critical first choice for any physician starting a direct care practice. This tool will be the main technology a physician engages with throughout their day and must keep workflows efficient and inform decisions at the point of care. Some key questions to consider when choosing an EHR:

  • Will this system allow me to document without compromising patient-physician interactions?
  • Is there a focus on care quality rather than reimbursements?

Direct care practices are growing in popularity with independent physicians as well as their patients. In the direct care model, physicians see fewer patients in a day and offer those patients the opportunity to communicate with them outside the office visit, to ensure higher quality outcomes. As AAFP explains, “The opportunity to spend more time interacting with patients and providing ongoing follow-up services is at the heart of the patient-centered care provided in DPC practice settings.”

Communication is an important aspect of the direct care practice. Online tools that enable the direct care physician to communicate with patients who may have questions or concerns after hours or who need to clarify instructions for care or medications play a key role in the practice’s success. Online tools for communicating with potential patients, including a website and social media, are also critical, giving the direct care physician a virtual platform for educating those patients and marketing their practice.

Technology can help direct care physicians measure and analyze the goals and metrics they set for their practice. Once these goals are outlined, measured, and evaluated, direct care physicians should analyze their performance and ask important questions about their business performance. By clearly indicating the tactics and strategies employed, providers can then isolate what worked and what didn’t work.

Krystle Thornton
January 9, 2019


What does it look like to be available to direct care patients 24/7?

For some direct care physicians, the idea of being available to patients around the clock may seem daunting. Who wants to be awakened every night in the middle of the night? However, most direct care physicians also find that they are able to develop a relationship with their patients that includes respect, boundaries, and established expectations.

The idea behind the direct care model is that patients pay a monthly fee and, in return, have access to basic primary care services during office hours as well as access to their physician after hours. That is an enticement for both doctor and patient, that the patient interaction is not limited to a 10-15 minute visit during the day. The physician can spend more time during each visit, getting to know that patient more completely, and the patient feels free to ask follow-up questions and clarify instructions before and after the visit.

Direct care physicians have found that their patients do tend to respect their time and do not take advantage of their 24/7 availability, but it helps to establish expectations up front. Some direct care physicians will state that they are available by text or email – but not phone calls – between certain hours. They may also specify when it is appropriate to contact them after hours. For example, a question about scheduling or administrative issues must wait until office hours.

When the direct care physician offers 24/7 availability and the patient does call in the middle of the night, however, the physician should be responsive to continue that positive relationship. If the call went to voice mail, the physician should return the call. Likewise, a text or email should be answered promptly. Of course, all physicians direct their patients to call 911 when they have such emergency situations as a potential heart attack.

Krystle Thornton
December 14, 2018


Should your direct care practice charge a registration fee?

One of the major attractions of a direct care practice for patients is the simplicity of the model. Patients pay a monthly membership fee for which they receive basic primary care services. The benefits include more time with their physician, including time outside the office visit, and no need to stress over insurance coverage for their primary care visits. Monthly membership fees can range from $50 to $150, depending on age and provider.

Some direct care providers also charge a registration fee, typically between $50 and $99, payable before the first patient visit. The registration fee is seen by some as a reasonable fee for setting up a billing account. Other direct care physicians see the registration fee as a sort of security against patients who may take advantage of the low monthly fee to access their healthcare services for the first month only and then drop out of the practice.

Many direct care practices do not require patients to commit to a long-term contract. In these cases, the patient could pay the first monthly fee, go to their appointment, receive their full direct care health services, and then not pay any additional fees. Some physicians see this possibility as the patient taking advantage of a “quick and cheap” visit.

On the other hand, some direct care physicians see the registration fee as unnecessary and possibly even a deterrent. The point of the direct care model is to provide quality healthcare at lower costs, so adding a registration fee may be seen as a negative, a potential barrier to new patients.

Alternative solutions include having the patient agree to a minimum participation term. In other words, the patient may contract for three or six – or even twelve – months of direct care membership fees before they are allowed to cancel.

Given the benefits of the direct care practice, including higher quality care, more focused provider attention, and fewer overall costs, direct care physicians believe that patients will stay with their practice without a formal long-term commitment and without a registration fee.

Gabby Marquez
December 10, 2018