Direct primary care (DPC) is a model of healthcare provision in which a primary care doctor charges patients a retainer fee covering all or most primary care services, including clinical, laboratory, and consulting services. This model enables physicians to move away from fee-for-service insurance billing. Given the variety of retainer practice models and the resulting legislative confusion, it is important to define direct primary care accurately. A DPC practice charges a periodic fee for services, generally $25 to $85 per month. It does not bill any third parties on a fee-for-service basis, and any per-visit charges are less than the monthly equivalent of the periodic fee. Through this mechanism, DPC practices claim to reduce administrative overhead by approximately 40 percent.
Advocates of DPC laud it as a free-market healthcare model that would lower the costs of primary care and improve patients’ access to care. Because DPC allows physicians to establish a more humane and flexible practice than they can under the typical volume-driven model, it has the potential to encourage more physicians to become primary care providers. Patients can join a DPC practice without regard to their insurance or their socioeconomic status. Doctors tend to be responsible for caring for a smaller number of clients (800 at any one time rather than 2,000), thereby enabling them to spend more time with each patient during longer appointments. Additionally, DPC practitioners have the flexibility to use email and telemedicine to interact with patients, which is a benefit of the model since these methods of providing care are not typically compensated by insurance companies. By breaking ties to health insurance programs, doctors are able to personalize the way they care for an individual patient without losing reimbursement, whereas in the traditional fee-for-service model, insurance companies typically refuse to compensate physicians for their time until (or unless) they have a face-to-face appointment with the patient.
Several obstacles impede physicians who seek to adopt the DPC model, however. In addition to regulatory penalties imposed by hostile government bodies, pioneers of the model have faced aggressive state insurance commissioners who threaten criminal prosecution for the unlawful sale of insurance, deeming DPC an insurance product. According to these state commissioners’ analysis, DPC transfers too much risk from patients to physicians for a fixed monthly fee. What might happen should too many ill patients need to be seen at once by a DPC physician? What guarantees that care would be delivered as promised? Unfortunately, primary care physicians’ reluctance to attempt the direct primary care model limits patient awareness of the model and its potential to improve healthcare access and quality. Low market demand for the DPC model and a low number of DPC practices in a state suggest the state is a hostile regulatory environment for DPC practices.
The DPC movement has responded by advocating for state-level protective legislation clarifying that DPC is not an insurance product and for other measures that would protect physicians’ and patients’ access to the model. Currently a small number of states have laws protecting DPC practices against complex insurance regulations. The Affordable Care Act contains a provision stating that the Department of Health and Human Services “shall permit a qualified health plan to provide coverage through a qualified direct primary care medical home plan that meets criteria established by the Secretary.” The act also allows DPC practices to be marketed in state exchanges as long as they are combined with a “wraparound” insurance policy that will cover other medical costs, such as catastrophic care.
The HOAP index’s Direct Primary Care Subindex analyzes state-level regulations and access to DPC practices by examining (1) whether a state has laws protecting DPC, (2) what is the market demand for this model, and (3) how many DPC practices exist in the state.