Direct Health Care

At Healsbridge, we refer to the direct-to-consumer care model used by health care providers–whether primary or specialty care, psychology or dentistry, as Direct Health Care. Our marketplace is intentionally designed to enable diverse health care and service providers to share their direct health care practices, products, and services broadly with consumers so they can build thriving practices where they can spend more time with patients and less time on payor requirements, billing, administrative tasks. Equally important to us is that consumers have the information (available direct care provider options, services, costs) they need to make informed decisions about their health and their financial wellbeing.

Direct Primary Care

The Direct Primary Care Coalition defines Direct Primary Care (DPC) as an innovative alternative payment model improving access to high functioning healthcare with a simple, flat, affordable membership fee.  No fee-for-service payments.  No third party billing.  The defining element of which is an enduring and trusting relationship between a patient and his or her [or their] primary care provider. 

The American Academy of Family Physicians (AAFP) adds that the DPC model is a practice and payment model where patients/consumers pay their physician or practice directly in the form of a flat monthly or annual fee, under terms of a contract, in exchange for access to a broad and enhanced range of primary care and medical administrative services, including real time access via advanced communication technology to their personal physician, extended visits, in some cases home-based medical visits, and highly personalized, coordinated, and comprehensive care administration and annual labs.

The AAFP supports the DPC model, both for family physicians for whom the revenue model can stabilize practice finances, allowing the physician and office staff to focus on the needs of the patient and improving their health outcomes rather than coding and billing; and for patients, who benefit because the contract fee effectively removes any additional financial barriers the patient may encounter in accessing routine care primary care, including preventative, wellness, and chronic care services.

Direct Specialty Care

Specialists and also see value in the direct health care model. This model is broadly used by therapists (counselors and psychologists) and psychiatrists, nurse practitioners, dermatologists, and reproductive specialists. These and other specialists and allied health professionals offer the same kind of contract and payment model to consumers/patients for care and services, including medical consults for diagnoses and symptom management, scheduled series of visits or treatments, and as-needed access to the provider and staff for chronic condition management. Like their primary care counterparts, specialists may also incorporate fee-for-service into their direct care models wherein consumers/patients pay a flat fee that is lower than they might under traditional fee-for-service or pay for diagnostic labs, imaging, and/or a bundle of services that are discounted when paid in full or in advance of a series of treatments.

While their direct practice provider may not accept health insurance, many consumers/patients will still carry health insurance, often a high deductible plan, to cover healthcare services that cannot be provided in the primary care practice setting, such as certain specialist care like cancer treatments and hospitalizations. Direct Specialty Care is especially well suited for consumers with high deductible plans where they might normally be paying out of pocket for any primary care services that are not considered preventive.

Direct Health Care is More Than Telehealth

Telehealth helped to provide some access to health care services and medical advice during the COVID-19 pandemic. However, Telehealth utilization fell sharply (nearly 40%) at the close of the pandemic. The only area where there is a post-pandemic increase in Telehealth use is in mental health visits, likely tied to increased demand for the services of mental health providers as Americans grapple with a national mental health crisis, the limited supply of these professionals in payer networks and health system employment (as evidenced by long waits for appointments, provider strikes, and lawsuits), and the fact that mental health professionals (most of whom operate direct health care practices) were early adopters of the channel and that talk therapy and CBT are uniquely suited to it.

But ultimately, consumers/patients have demonstrated that they prefer to see a doctor in person, at least some of the time, and that they prefer to have a relationship with specific providers versus whomever answers the call or chats on the app. Further complicating matters is challenging legal restrictions that have made it difficult for payers and health systems to land upon a satisfactory way of billing for Telehealth visits. Most have settled upon contracting with digital health, virtual clinics, and Telehealth startups where they pay a per member/per month fee or purchase volume-based licenses to access providers who are contractors being paid a fee for service or employees.

Since they are not bound by insurance reimbursement restrictions, the Direct Health Care contract fee structure enables providers to spend more time with their patients face-to-face in office visits, via phone or video call (Telehealth), and email and/or app or text messaging. Direct Health Care providers can offer their patients the best of all worlds–a provider they know and trust, convenience, and the ability to choose the channel based on their needs. 

Direct Health Care Vs. Concierge Care

Direct Health Care is often conflated with Concierge Care. They are very different models. Concierge Care is designed to prioritize convenient access and a premium experience; direct care is designed to provide focused, affordable care. That is not to say that Direct Health Care providers do not provide an exceptional experience to their patients. They do, but that experience is the result of the provider being able to devote more time (typically 45 min-1 hour) to their patients than they could in traditional practice (typically 7-8 minutes).

Cost is also an important distinction between the models–especially given that is the most oft-cited reason that Direct Health Care, when conflated with Concierge Care, is dismissed as a viable path to health care affordability. Since it was designed as a premium “topper” or complement to health insurance coverage–a way to get appointments faster and in your venue of choice–Concierge Care could not and need not be affordable. Direct Care was designed by physicians who wanted the same autonomy and financial well-being as their Concierge counterparts, but with the goal of delivering high-quality care that is affordable to all of their patients–even the ones with no health insurance.

And that brings us to, perhaps, the most critical distinction between the two models–Direct Health Care providers do not bill and are not reimbursed by health insurers for any of their services while Concierge providers accept a monthly fee/subscription and bill insurers. There is one exception: some Direct Health Care providers, usually specialists, do operate “hybrid” practices where they accept both direct payment and health insurance. Due to regulatory restrictions, these providers do not bill Medicare and Medicaid.

Finally, there’s panel size. Hands down, the Concierge provider can have the smallest panel because s/he/they can charge the highest fees and generate high revenue/income (from direct payments and reimbursements) on a small panel. Direct Health Care providers usually have panels that are 1.5-2 times larger than Concierge providers–but their panels are still less than 10% of the panel size of a provider in traditional practice. Like cost, small panels have been cause for criticism of Direct Health Care with critics citing that it amounts to underutilization of scarce primary care provider resources and potentially greater limitations on access to care, especially for already underserved populations like people of color and rural communities. However, Direct Health Care providers counter these arguments by citing that their model enables people who would not typically be able to access care to access it affordably, locally, and continuously. That includes people who are unemployed or can’t afford an employer sponsored plan, those who don’t qualify for Medicaid, and those who not eligible for subsidies and therefore cannot afford expanded Medicaid (on-exchange) health plans. They further countered that the small panel size enabled them to locate their practices in small towns and rural settings they may not have previously considered. And, that the Direct Health Care model has kept physicians in practice who might otherwise have quit due to burnout, dissatisfaction, or retirement.

Benefits of Direct Health Care

According to Milliman’s May 2020 study, Direct Primary Care significantly reduced patient demand for overall health care services (down 6.4-18.9%), significantly reduced emergency department (ED) visits (down 28.4-52.6%), and significantly reduced costs to patient out-of- pocket costs via eliminating cost sharing for primary care services and waiving the medical deductible for all services.

According to the Pioneer Institute’s January 2021 study, Direct Health Care practices reduced patient out-of-pocket costs, including the cost of prescription drugs and labs, lowered ED visits, increased patient satisfaction due to price transparency, viewing their provider as a guide, shorter wait times, and lower costs, and lower burnout rates and higher satisfaction for providers.

BenefitsDirect Health Care PracticeTraditional/Corporate Practice
AutonomyProvider sets vision, services, prices, and policiesHealth system management sets vision, services, prices, and policies
Claims & Billing CostsLimited/no costs for revenue cycle management software licenses, IT or back office staffing or medical billing. Less time spent coding, managing claims. Better cashflow due to less time waiting for low reimbursements.High costs for revenue cycle management, billing, staffing or outsourcing. More time spent coding, billing, reporting to management.
Panel SizeAverage panel: 600 (source: American Assn of Physician Leaders). On average, DPC patients have four, 35-minute visits/year. Average panel: 2300 (source: National Institutes of Health). On average, patients have 1.66, 15-minute visits/year.
Patient Visit TimeAverage: 30-60 minutesAverage: 13-18 minutes
Health EquityAverage cost: $70/month. Increases affordability for all: Saves patients as much as $3200/year on OOP, premiums, deductibles, drugs, and labs. Enables small/mid-sized businesses to offer health care to employees, often people of color or working poor. Attracts women, LGBTQ, and Black providers because of its greater affordability and accessibility for their patients. Enables providers to locate practices in small and rural towns.Health care is tethered to higher-wage employment (not available in rural or poor communities) or dependent on subsidy. Average deductible for single coverage employer health plan (2021): $1,434. Average deductible for marketplace plan: $2,825. Average out-of-pocket max for employer plan: $4,272 (and up to $8,700 in marketplace plans). Health systems and traditional providers located in large and affluent metros.
Salary/RevenueAverage DPC revenue ($70 x 600 patients): $504, 000. Average DPC salary (assumes 30% overhead): $352,800.Average primary care provider salary: $270,000
Overview of Benefits of Direct Health Care

Criticisms of Direct Health Care

Counter to Argument 1 (DHC exacerbates the provider shortage): This and argument 4 (see below) are the most oft leveraged against direct primary care. Yes, there is a current and projected shortage. No, direct primary care will not exacerbate it. Here’s why.

The American Association of Medical Colleges (AAMC) projects a shortage of 54,100 and 139,000 primary care physicians by 2033 (74,100-145,500 primary care physicians, if barriers to access are removed and demand from underserved communities is included). These projections are based on workforce demand models that includes factors like demand created demographic shifts (the number of people in US aged 65+ is outpacing the number 18 and under) and by removing barriers to access for underserved communities to create equitable access.

So, even if no additional provider newly adopts the direct primary care model and we stay the current, traditional healthcare system course, we will still have a shortage. Here’s why.

The American Association of Medical Colleges (AAMC) projects a shortage of 54,100 and 139,000 primary care physicians by 2033 (74,100-145,500 primary care physicians, if barriers to access are removed and demand from underserved communities is included). These projections are based on:

  • Demand created by demographic shifts (the number of people in US aged 65+ is outpacing the number 18 and under)
  • Retirements (40% of primary care providers will be 65+ years of age in the next 10 years) and burnout is contributing to an expressed desire to retire sooner than previously predicted.
  • Too few residencies, fewer medical students choosing to match to primary care residencies
  • Fewer medical school grads accepting primary care jobs (citing low pay), leaving nearly half of US primary care jobs unfilled

Additionally, there is a deep misalignment of moral, professional, and financial interests between primary care physicians and leaders and owners in the healthcare system.

  • 71% of physicians graduate with medical debt ($215,000 on average that takes 13 years to pay off)—and it takes providers an average of 13 years to pay off this debt.
  • 117,000 physicians quit in 2021—15,000 internal medicine physicians, 13,015 family medicine physicians, 7,330 pediatricians
  • 53% of physicians report moderate to severe burnout—90% of internists, 57% pediatricians
  • Top reasons for burnout: Volume of bureaucratic demands (61%), lack of respect from co-workers (38%), stress of treating COVID (8%)
  • 23% of physicians are depressed
  • 53% have a second job to earn more money and gain autonomy

So, it is by staying our current course that we ensure we have have a physician and provider shortage—and that the gap widens. The DPC model offers an opportunity to retain physicians and providers in the Healthcare System where they can care for patients and take care of themselves.

Counter to Argument 2: DPC will remove primary care physicians/providers from the healthcare system. Many have bemoaned that direct primary care “takes primary care doctors out of the system”. Not true. The System is more than the sum of the assets and employees of governments, payers, hospitals, and health systems. We’ve witnessed and welcomed the addition of retail clinics (Walgreens, CVS), concierge clinic chains (Amazon’s One Medical, Forward), virtual clinics (Maven), at-home urgent cares (DispatchHealth), and countless Medicare-focused wraparound care companies into the System even though they, of necessity, hire physicians and other providers away from traditional actors, offering them higher pay, leadership roles (e.g. Chief Medical Officer), flexible work, and lower administrative workloads. Is this more acceptable because these new players ultimately rely upon the old way of getting paid—insurers?

If we don’t embrace direct primary care (and, more broadly, direct health care) as simply another payment and practice model, we not only risk continued loss of primary care physicians and providers but also the opportunity to truly align patient and provider interests (patients can’t afford to and won’t pay for services with which they are not satisfied). 

Counter to Argument 3 (DPC will exacerbate health inequities): The argument is closely related to criticism X—that direct health care is equivalent to expensive, exclusive concierge care—but also warns that direct primary care, with its smaller practice sizes, will further reduce accessibility by restricting provider capacity. Yes, anything that makes it harder for marginalized people to access care is bad. But, it’s not clear that this is true of direct primary care. After all, under the current, traditional practice model, health equity by any measure is still merely an aspiration. Black, Hispanic, and AIAN people fare worse than White people on every measure of health and health equity (Kaiser Family Foundation’s 2023 Report on Race Equity and Health Policy). 

The primary cause of concern with the direct primary care model is its smaller panel size (600-800 patients) compared to primary care physicians in traditional practice (2500-3000 patients). Prima facia this could further restrict access to care. But, a study by the University of California at San Francisco’s Center for Excellence in Primary Care determined that if a primary care physician does everything herself—screening, counseling, immunization, drug prescription, routine chronic care plus treatment of acute conditions—working 43 hours a week for 47.1 weeks a year, she can accommodate a maximum panel of 983 patients. Studies have also shown that primary care physicians with 2500-patient panels do not have enough time to provide the guideline-recommended primary care (preventive, chronic disease, and acute care), even with team-based care. So, it’s more likely that direct primary care physicians’ panel size is optimal if the goal is to prioritize the provider-patient relationship to better identify health risk factors and provide timely, high-quality care at an affordable cost.

Additionally, when you consider factors that significantly limit access to care—lower income, other cost-related barriers, lower rates of insurance coverage, limited access to comprehensive insurance coverage, fewer providers—there are greater threats than panel size to the achievement of health equity:

  • Racism and implicit and explicit bias engender mistrust and discourage access by people who need care most
  • Acquisitions and mergers of and between health systems and hospitals (1,887 from 1998 to 2022) resulted in 2,000 fewer hospitals.
  • Feverish acquisition of primary care practices by private equity firms (484 in 2021 alone) has driven up primary and speciality care prices as much as 16% and per-patient expenditures by up to 10%—with no significant quality improvements. Care becomes more expensive and less accessible. Patients, especially to poor and minority communities, have no ability to shop around and sub away to other providers when PE firms own 30-50% market share in 391 MSAs.
  • 70% of federally designated Health Professional Shortage Area (HPSAs) are in rural areas but 98% of medical residency programs are in urban areas

There is no compelling evidence that DPC will stand in the way of achieving health equity; all indications are that the model can actually get us closer than we’ve ever been. Consider that primary care physicians and other providers are driven to the direct health care model by a need to save their own professional, personal, and corporeal lives—not just to make more money. The model is streamlined and straightforward for patients, making it affordable for patients who can’t afford any/adequate insurance coverage and enabling providers to build thriving single or multi-provider practices with a smaller panel in rural, urban, and underserved areas. And, thanks to expansion of full practice authority for nurse practitioners and other healthcare providers, the DPC model is increasing our nation’s primary care capacity and delivery in rural areas and in states that have not expanded Medicaid access.

Counter to Argument 3 (Direct Health Care is Concierge Care): The differences between Direct Health Care and Concierge Care are outlined here. But, this criticism centers on concerns that, in an effort to grow their incomes without growing their panel sizes, direct health care providers will simply raise their prices, offer more elective services, or operate as hybrids, thereby worsening already inequitable access. Concierge Health Care is a $6B industry that’s expected to grow to $30B by 2031. It exists because there is consumer/patient demand for shorter waits for appointments, longer visits with doctors, convenient access (location, channel, and hours of operation), and for access to personalized care experiences. There is also physician demand for a model that is less stressful, more autonomous, enables work-life balance, and creates financial wellness without ever-increasing panel sizes and administrative workloads. So, one can certainly see the draw–all of this plus two revenue streams (subscription fee + insurance reimbursement).

However, direct health care providers are intentionally choosing a model where they know their ability to raise prices is constrained by the fact that consumers/patients have much lower buying power without employer subsidies or health insurance and are more price-sensitive when paying out of pocket. This is a strong indicator of a motivation beyond profit.

Counter to Criticism 4 (DHC will mislead consumers into dropping/not buying health insurance): A 2021 survey by Bend Financial found that 56% of Americans are “completely lost when it comes to understanding my health insurance”, and a 2022 Ribbon Health poll found that 62% of Americans don’t trust their health insurance company when searching for care. And, the American Board of Internal Medicine Foundation’s 2021 survey of trust in the U.S. health care system revealed that Americans had very little trust in much of the system. Here’s the percent that consumers trusted each institution “completely” and “somewhat”: health insurance companies (4%, 29%), pharmaceutical companies (3%, 31%), hospitals (14%, 58%). But we trust these institutions not to mislead consumers, right?

On the other hand, a defining characteristic of the direct health care practice is transparency. Direct health care providers specifically list the care and services included–and not included–in the subscription price in straightforward contracts between providers and their patients. It is common practice for direct health care providers to include a recommendation on their websites and in their contracts that patients retain or secure a health plan to cover potentially catastrophic costs.

Additionally, there is no incentive for direct health care providers to mislead consumers/patients or to allow them to believe they can get care or services they cannot. The provider and the consumer/patient have a binding business contract that clearly states the scope of services and explicitly states that the subscription is not health insurance.

Finally, legislation and insurance commissioner guidance in 35 states and federal law is very clear that Direct Health Care is not health insurance.

Counter to Argument 5 (Direct Health care practices not scalable): This argument against direct health care is usually focused on panel size. But there is a sub-argument about the size of DHC practices. Opponents of direct health care believe that thousands of independent, small medical practices serving hundreds of patients each can’t meet the demands on the US health care system. Ironically, that’s exactly the current state of the system. Insurance companies build networks comprised of thousands of small 1-2 doctor practices in order to meet regulatory requirements for network adequacy. The companies assign thousands of members to these small practices that have no more capacity under the current system than they do in the DHC model. Then, members wait months for appointments or continue to surf the network for available providers, until they can finally see an overworked doctor with too few minutes to spare.

DHC providers’ smaller panel sizes enable providers to enable greater access to providers’ advice and visits and to nearly double the face-time they can spend with patients.

DHC providers predominantly, but not exclusively, operate as 1-2 physician practices. The model does not preclude DHC practices operating with more than two physicians and/or other providers, including nurse practitioners and physician assistants. The subscription-based payment structure (which is not dissimilar to the PMPM-based value-based payment models that payors have implemented with providers) affords DHC providers the ability to organize their practices in the same way as traditional providers, using team care to reduce time required to deliver care. The lower administrative load keeps the full team focused on care delivery while retaining margins sufficient to reinvest in and grow the practices. Providers like dermatologists, fertility specialists, and others operate large practices where patients pay directly.

Finally, Direct Health Care has existed since 1930 and continues to grow as more of a movement than a system. That changes now, with Healsbridge. Healsbridge is a platform that connects Direct Health Care providers to consumers who want their services–and connects providers to one another as a community and professional association with all of the benefits of a network. Providers on Healbridge can leverage the community for referrals, consults, peer advice, recommendations, resources, and collaboration.