Written by Dr. Joel Warshaw | Published on Thursday, October 22nd, 2015

Direct Primary Care (DPC) models provide a clear path for the “fixing” of our healthcare system. These programs provide comprehensive care, often unlimited, between a doctor and a limited number of patients, without third party involvement (i.e. insurance companies). This is slightly different than the Concierge Medicine (CM) model that offers the same services except they continue to work with third party companies to enhance profits. For a regular membership fee, DPC/CM Physicians offer a higher level of access and service, unmatched by most “Traditional” practices that work fee-for-service primarily through Third Party entities.

Many have condemned the DPC/CM models based on an “elitist” attitude to the rich and needy, as well as the short-term damages created by Primary Care Doctors reducing their patient panels. Estimates show the Traditional Doctor caring for an average of 2,300 patients, as opposed to the DPC/CM Doctor caring for an average of 600 members. This reduction inpatient panel is feared to add to the already anticipated Primary Care shortage over the next ten years, with 2025 reported projected shortfalls at 12,500 to 31,100 (not nearly as bad as the report froma 2010 projected shortfall of 65,800).

This blog focuses on the DPC model as a way to fix our current healthcare system. Both short term and long term analysis will be discussed in broad strokes, but obviously much detail will need to be worked out.

Short-Term Analysis

DPC/CM practices are growing at a significant rate year after year. There were reportedly more than 12,000 DPC/CM Physicians practicing in 2014, up from 4,400 in 2012 (Concierge Medicine Today, 2015). According to a 2013 survey by the Physician’s Foundation, 9.6% of Physicians are planning to convert their practice to DPC/CM over the next one to three years. Some practices charge an exorbitant amount of money for membership, such as $20,000 per year, however these are extremely rare. The majority charge members an average of approximately $100 per month, not including discounts for families. These numbers are hardly for the wealthy, with an average of $3 per day. This is equivalent to half the price of a pack of cigarettes daily, which obviously are not just for the wealthy. Patients get better care and service, and costs are not unreasonable.

If we were to view a static picture of the current healthcare system, then one cannot argue that the biggest downside would be that there will be fewer Physicians caring for patients, especially with The Affordable Care Act (Obamacare) now providing more patients with healthcare insurance. The immediate response we now see are the rapid openings of Urgent Care services on nearly every corner and in many pharmacies. This is not the ideal situation, especially when the Patient-Doctor relationship is so important to maintain trust and continuity of care.

With a greater demand, the response should be more trained Primary Care doctors entering the workforce. But the current reality is that there are fewer Medical Students pursuing careers in Primary Care Medicine, let alone our brightest College Students entering medicine altogether. According to a national survey published in 2011 Archive of Internal Medicine, only 2% of medical students were interested in pursuing a career in Internal Medicine. Between 1997 and 2005, the number of US medical school graduates entering primary care dropped 50%. Based on decreased compensations when compared to other lucrative procedure oriented specialties, increasing administrative burdens such as the highly unpopular, nauseatingly specific, ICD-10 coding just released, and ever growing median debt for graduating medical students, (Association of American Medical Colleges (AAMC) 2014 estimated average debts of $180,000), can anyone blame students for not pursuing Primary Care Medicine? Add in Physician early retirement and growing population, the separation between supply and demand would only grow.

Long-Term Analysis

But let’s not look at this as a static picture, but rather a dynamic one and project the DPC scenario out over the next ten years. Let’s propose that the DPC model will be the standard way to practice medicine for all Primary Care Doctors (including Pediatricians, Internists, Family Practitioners, and Geriatricians), fully supported by Third Party Payers. These insurance companies would embrace the DPC practices by carving out a portion of their premiums and directly paying the Primary Care Doctors monthly fees to better care for their clients. This is no different than Health Maintenance Organizations (HMO’s) thrust upon us in the 1990’s, only to ultimately fail. The difference would be that instead of paying the primary care doctor, then the so-called “Gatekeeper”, $10-$12 per member per month, as was offered with HMO’s in the 1990’s, the standard fee would increase to $50 per month at a minimum. DPC practices can continue to charge fees they feel worthy of their services, but this time a portion of their fees, if not all, will be subsidized by the insurance companies.

Services would be all inclusive between the Primary Care Physician and the Patient, with no further fee-for-service compensation back to the DPC practice. These services would be separate from ancillary services such as labs, x-rays, medications, etc, which will continue to be covered by insurance companies, as is the current model we see today. Physicians would be incentivized to keep their panels in the 600-1,000 ranges, as higher numbers will jeopardize the greatly improved access and service offered to their patients, and risk their patient panel. Free marketing will flow as patients unhappy can easily look for healthcare elsewhere. Primary Care Physician work load will be more reasonable, there will be much less administrative burden, there will be a closer relationship with patients with better outcomes, and Physicians will be compensated based on market trends compared to other specialists.

With greatly improved working conditions, lifestyle, and compensation, Medical Students will be sure to start looking at Primary Care as a very viable and enjoyable field to pursue. We would even see our best and brightest College Students pursue medicine once again. Colleges and Medical Schools are already starting to sense the movement. A recent AAMC survey found that 129 of 140 responding medical schools offered a required course on the cost of health care during the 2013-2014 school year. Nearly 40 percent of the schools said they also present the issue in elective courses, some specifically educating the Concierge Movement.

Insurance companies will reap significant benefits as well within this improved system. By promoting a closer relationship between Doctor and Patient, there will be improved continuity of care and increased time spent with patients. This will lead to a reduction in medical redundancy and medical errors, as well as a greater reduction in Urgent Care/Emergency Room visits and hospitalizations. According to a 2012 study from MDVIP, there was a 79% reduction in Medicare hospital discharges over a five year period when comparing the Concierge practice to the Traditional practice. Overall, this represented a $2,551 savings per patient. All of these factors will lead to a much greater reduction in healthcare expenses.

These are just broad strokes with many details to be sorted out, but clearly offer a road map to improved healthcare and management for doctors, insurance companies and, most importantly, patients. By offering this combination of models, part HMO, part Direct Care, part Traditional, let’s call it Directed Managed Care (DMC), our healthcare system will return to the best managed and successful system in the world. I believe everyone deserves healthcare services, but I also believe in Capitalism and a free market. Many people don’t want to think of medicine as a business, but the hard truth is that is exactly what it is, and we cannot ignore the obvious! A major overhaul like socialized medicine is not the answer, but a tweaking of our current system will lead to better medicine and better business.

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