The direct primary care (DPC) model is a unique structure. There are no co-pays or per-visit fees. Patients pay a membership fee, either on a monthly or an annual basis that covers all of their basic services at the primary care provider’s office. Some DPC practices include lab tests and other services as part of the membership fee.
Typically, the DPC does not accept insurance so has reduced overhead and lower costs that are then passed on to the patients. A DPC provider may encourage patients to secure a high-deductible insurance plan to cover catastrophic services not included in their membership fee.
Making the move from a traditional practice to a DPC can be challenging for an independent physician. The financial health of the practice must be managed appropriately to survive the transition. Many primary care providers opt to move to a hybrid DPC model at first.
A hybrid model is one in which providers has some patients on a membership fee and some patients on insurance plans. Financially, the hybrid can help independent physicians transition to a full DPC model. As Lee S. Gross, MD, Co-Founder of Epiphany Health Direct Primary Care, stated in an article recently, the hybrid model “allowed us to test and troubleshoot the model, add an additional steady revenue stream to our established practice, and gradually transition away from third parties on our own schedule.”
However, an article in Twine Health points out that there are many complications in the hybrid model that may not make it a good choice for that transition. One of the more serious challenges is with regulatory issues, particularly when trying to balance insurance payments and membership fees. A simple billing mistake could create big trouble with industry regulators.
Elation Health is committed to helping independent providers understand more about the DPC model. We have launched a blog series specifically designed to provide independent physicians the information they need on direct primary care and concierge practices.