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Starting a Direct Primary Care Practice: A Quick Overview

Pricing Calculation Baseline

Opening a medical practice, although challenging, is very rewarding for many physicians. Lots of new doctors are turning toward a direct care model for their practices. It offers a better work-life balance, reduced practice overhead, and higher per-patient revenue. In this model, providers contract directly with patients to provide care — instead of today’s traditional method of working through insurance providers. It gives physicians more control within their practices and it provides patients with better care.

The direct primary care model provides doctors with a better work-life balance, reduced practice overhead, and higher per-patient revenue.

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Here’s a list of everything you need to do when starting a direct primary care practice:

  1. Find an office
  2. Staff up
  3. Determine your pricing
  4. Select an EHR
  5. Market your practice
  6. Optimize for success

It may sound like a lot of steps, but getting started on the right foot will put you on a path to success. This post will offer you a quick overview of all of these steps — if you’re looking for a more detailed guide, download our complete Direct Care Playbook.

Steps to Starting a Direct Primary Care Practice

1.     Find an Office

There are many things to consider when finding your office space. You should begin by determining your budget to whittle down the list of potential spaces. Keep in mind that direct care practices often have a smaller number of patients, so you can probably get by with a smaller office than you think. You must also consider location, as this will have an impact on your ability to get and retain patients.

Direct primary care practices tend to be a little smaller than standard primary care practices — keep this in mind when determining how much space you will need for your office.

2.     Hire Staff

Once you have an office secured, you’re going to need people to work in it. Some doctors operate direct care practices with no staff, but most people need a little bit of help to get administrative tasks done.

Many doctors find that a visionary office manager is one of the key players on their team. Beyond that, the number of additional staff members is really up to you. It’s important to find people with the right skills for your practice. We recommend reaching out to your existing network to find people who you can recruit to work in your office. If you’re relocating and no longer have a local network, there are also plenty of professional firms that can assist you with this process.

A welcoming presence and great communication skills are two things you will want in all of your staff members.

3.     Establish Pricing

Determining per-patient pricing is a key step in setting up your practice. After all, this can be the difference between a thriving, profitable practice and one struggling to stay afloat. Direct care practices use membership fees on an individual or family basis that are determined by age, geography, and patient demographics. Of course, these numbers should be determined by working backward from desired salary and fixed expenses. We recommend calculating it as follows:

Pricing Calculation Baseline

As a starting baseline, you can assume 300–500 patients per physician as an average panel size. Using this formula will give you a break-even point. Then you can determine what you want your take-home to be and use that to decide the final pricing model for your practice.

4.     Select an EHR

There are numerous technology tools that you will need in your practice, but your EHR is the most important one. You will be working with this tool every day, so you want it to be easy to use and not get in the way of your patient interactions. Here are some questions you should consider to find the right solution:

  • Will this system allow me to document without compromising patient-physician interactions?
  • Is there a focus on care quality rather than reimbursements?
  • 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 right EHR will help you optimize and improve practice management without interrupting your workflow.

5.     Market Your Practice

Now that back-office operations are taken care of, you need patients. We find that the most successful marketing strategy for direct primary care physicians is word of mouth. It’s important that you help educate your patients on the benefits of direct primary care, so they can act as ambassadors for your practice. If you want to formalize this process, you can also create a patient referral program that incentivizes new referrals.

In addition, you should use online methods to grow your practice. Create a website that makes it easy for patients to find you and has information on the services you provide. Once your website is built, you will need to optimize it for search engines, a process called search engine optimization (SEO). This will improve the chances of your website showing up when your future patients search for specific terms.

Additional marketing tactics include:

  • Social media
  • Printed brochures / flyers
  • Sponsorships / media outreach / advertising
  • Physician listing websites

Word-of-mouth marketing is the best way to get new patients and grow your practice.

Legal Considerations

Medical businesses have legal needs outside the scope of a physician’s training. Utilizing legal help and resources can help your practice avoid serious problems down the line. As part of starting a direct primary care practice, you need to:

  • Find a lawyer with experience in direct care models and establish a schedule or scope of work to determine a budget in advance.
  • Purchase malpractice insurance to protect yourself and your practice against potentially damaging lawsuits.
  • Research direct care policies to understand what is required of you at both state and federal levels.

6.     Optimize for Success

Once your practice is up and running, you must continue to optimize for success. Setting goals based on practice metrics will allow you to evaluate and determine your progress. Some key performance metrics are:

  • Average patient encounter time
  • Number of visits per patient per month
  • Average time to an appointment
  • Patient wait times
  • Number of patient visits per day
  • Number of patients per panel

Establish your practice goals and then revisit them regularly to review your progress.

Want to start your own direct primary care practice?

Our comprehensive eBook includes all the nitty-gritty details on everything you need to know.
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