November 30, 2016

Direct Primary Care: Rushika Fernandopulle and Iora

Robert Graboyes

Senior Research Fellow
Summary

Direct Primary Care practices face stumbling blocks in the form of regulation. In some states, insurance commissioners judge DPCs to be a form of health insurance, subject to the enormous regulatory burden associated with an insurance company. Fernandopulle and others in the DPC world argue vehemently (and logically) that DPC is not insurance. It is simply primary care with a different payment structure.

Contact us
To speak with a scholar or learn more on this topic, visit our contact page.

Technology isn’t just machines and equipment. It’s also organization and management. For New England-based Iora Health, novel structure is the essence of its technology.

Iora is a direct primary care (DPC) practice with 34 clinics in 11 cities coast to coast. Founded by CEO Rushika Fernandopulle, Iora upends the traditional payment structure and chain of command associated with medical care. It embraces digital technologies, like video conferencing and emails, shunned by many medical practices.

DPC practices and traditional primary care physicians (PCPs) differ in their payment structures. While most PCPs bill insurers for each visit or procedure (with patients often subject to co-pays), Iora simply receives one fixed monthly fee for all the care a patient receives. Payments come either from the patient or from employers or health plans eager to keep subscribers away from expensive hospitals or emergency rooms. Patients see their doctors or members of the extended care team in person, by video or by phone. They can also communicate by email or text message.

I asked whether patients might overuse services and swamp clinics. Fernandopulle told me, “You might think that would happen, but it doesn’t. It turns out that people don’t like spending time with doctors all that much.”

Call an Iora Clinic and there’s a good chance the person who answers the phone will be a physician. “That sounds like a very high-priced receptionist,” I told Fernandopulle. He said once again, intuition fails. Iora found it less costly to have a doctor greet the patient at the reception desk or on the phone; the more expensive alternative is to have a receptionist take a patient’s question, hunt for the doctor, play a game of message tag, discover the receptionist hadn’t asked a vital question, and so forth.

For each doctor, Iora employs three or four “health coaches,” who aren’t necessarily traditional healthcare professionals, to help patients manage their health between visits. Coaches check on compliance with drug regimens, encourage lifestyle changes, take them grocery shopping, visit their homes, run free classes (yoga, Zumba, meditation, etc.), and help coordinate specialty and hospital care — all at no additional cost.

DPC also circumvents one of medicine’s most deadly cost-burners — the mountain of administrative work demanded by insurers. Iora’s doctors don’t fill in endless checkboxes to satisfy insurers. (While some insurers cover Iora patients’ costs, the process involves monthly payments, not endless accounting for individual services administered during thousands of exams each month.

Eliminating insurer micromanagement also means doctors aren’t compelled to rush through consults. Recently, a young woman visited my office. She had suffered from a debilitating illness a series of doctors had failed to properly diagnose. By chance, she visited a DPC practice. There, she said, the doctor spent two to three times as long with her as the insurer-rushed doctors had done. That extra time and questioning, she said, enabled the DPC doctor to reach the conclusion — correctly — that she had Lyme disease.

DPC practices face stumbling blocks in the form of regulation. In some states, insurance commissioners judge DPCs to be a form of health insurance, subject to the enormous regulatory burden associated with an insurance company. Fernandopulle and others in the DPC world argue vehemently (and logically) that DPC is not insurance. It is simply primary care with a different payment structure. (Iora patients generally have separate insurance policies to cover expensive specialty care.)

The threat to treat companies like Iora as insurers has impeded DPC practices from expanding their reach. Iora runs the healthcare facilities for Dartmouth College. It has also run a clinic for the Carpenter’s Union in Boston. When Iora wished to open the latter to patients from outside the union, the regulate-as-insurer threat made it infeasible.

Fernandopulle runs a practice along with nonprofit Grameen America in New York City. This practice primarily serves undocumented immigrants, for $365 per person per year. These individuals are not eligible for Medicaid and often wind up seeking routine care in emergency rooms at enormous cost. Stunningly, though these patients can’t get insurance otherwise and voluntarily pay the $365 themselves, regulators have threatened Iora and other DPC practices doing similar things because the regulators see them as insurers.