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Advantages and limitations of the direct primary care model

MGMA Stat - May 17, 2018

Revenue Cycle

A May 15 MGMA Stat poll found that nearly three-fourths of the 1,435 healthcare leaders who responded were not aware of the direct primary care (DPC) model. According to the Direct Primary Care Coalition, “DPC is an innovative alternative payment model improving access to high functioning healthcare with a simple, flat, affordable membership fee.” The DPC model charges patients monthly, quarterly or annually. While most primary care services are typically covered, practices often suggest a supplemental, high-deductible plan to cover services that do not fall under the umbrella of primary care.

As the American Academy of Family Physicians notes, “[t]he variance between DPC practices is often found in the breadth of primary care services covered by their retainer contract fee structure. Some DPC practices have retainer fees that cover the entirety of primary care services, including care management and care coordination, as well as services involving external organizations such as off-site diagnostic facilities. Other DPC practices cover a far more limited scope of services and collect service fees from patients at the time of care to cover costs occurred [sic] in the visits.”

PeakMed, a direct primary care provider in Colorado, offers a plan that provides individuals and families with unlimited access to their personal physician for a flat, monthly fee. Within this model, claims are not sent to insurance companies, eliminating contracts, third-party billing, fee-for-service payments and the need for relationships with payers. Jon Hernandez, chief executive officer, PeakMed, envisions that “by changing the economics of healthcare today and improving quality and access to care, we can overhaul the experience and redefine both health and care.” In the podcast episode the evolution of direct primary care, Hernandez outlines the history of DPC and highlights the development of new approaches.

Within DPC models, patients can text or call their physician at any time, as frequently as they choose. For elderly patients or families with small children, this is convenient, as in-person doctor visits are not required. As Mark Tomasulo, PeakMed’s founder, states, “Seventy to eighty percent of all doctor visits can be done over text, phone, or video once a healthcare plan has been established.” Learn more from Mark in the podcast, Direct primary care: Putting ‘doctors back into the driver’s seat’.

Concierge medicine is often confused with the DPC model. However, a key distinction is that direct primary care is explicitly mentioned in the Affordable Care Act (ACA) as an acceptable option for receiving medical care without insurance, while concierge medicine is not. “The concierge practice limits the number of ‘club’ members and guarantees special coverage and availability,” says Paul I. Berkley, FACMPE, MGMA member, chief executive officer, Healthcare Associates in Medicine PC, Staten Island, N.Y. “Now we are starting to see some hybrids. The doctor offers fewer ‘club’ benefits but still charges a club membership. This arrangement often requires the patient to pay co-pays, etc., but offers greater access and availability.”
Advantages of the DPC model Limitations of the DPC model
Better health outcomes through better access to physicians DPC agreements do not cover specialists or hospital stays 
Lower, transparent costs based on a flat rate As primary care physicians see fewer patients under the  DPC model, access will be limited
Enhanced patient experience by creating a relationship between provider and patient by offering unrestricted access to treatment across a variety of platforms Patients with Medicare, Medicaid or ACA plans will have limited funds
Available access regardless of age, pre-existing conditions, insurance coverage or nature of the illness For practices exclusively offering DPC, their only source of revenue are those patients who receive this care
Less administrative burden, generally allowing for longer interactions  

“[DPC] is a great option for docs and patients with high deductibles,” says Susan Childs, FACMPE, MGMA member, president, Evolution Healthcare Consulting, Rougemont, N.C. “Doctors are choosing a lifestyle of seeing patients the way they want to.”
“Alumni spotlight: PeakMed (2017).” Colorado Companies to Watch. 2017. Available from:
“PeakMed brings back the doctor-patient relationship with the help of modern tech.” Blackstone Entrepreneurs Network. May 2, 2018. Available from:

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Erica Betz
Project Analyst

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