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A common criticism
of direct primary care (membership/retainer/concierge practices) is the added
expense – “isn’t it too expensive?” Ways to think about the cost are to
prioritize expenditures and to consider potential savings that make it cost
effective.
I gave examples of
three direct primary care practices in an earlier post. Here is a recap
of costs.
AtlasMD’s annual fee is $600 for a young adult
and about $1400 for a family of four; Dr Neuhofel’s fee is $360-$600
annually for an individual and $1200 for a family of four and Drs Izbicki charge $780 per year per individual. All
can be paid monthly.
As Jon Izbicki
puts it, “Our monthly fee is less than what it costs to rent a parking space
downtown for the month.” Even the more expensive retainer practices are still
within reason for many. $1500 is about
$4 per day; $2000 is about $5.50. How many people spend that much per day at
Starbucks? Or, consider the monthly/annual cost of a smart phone data contract
with ATT or Verizon. According to the Wall Street
Journal and quoting from a Department of Labor study, the average American family
spends $2237 per year for internet, pay TV and telephone service. So, perhaps
$1500 or $2000 - which is certainly real money - is not such an onerous expense
when thinking in terms of prioritizing healthcare expenses relative to other
expenses. Of course, it is an added expense
if you already have typical insurance.
But if you have a
high deductible plan with a health savings account (HSA), you can pay for the
membership/retainer with tax advantaged dollars and save considerably. And
since the PCP will likely help you avoid expensive trips to the specialist, you
will save those dollars as well.
I predict that (absent a significant
change in insurer behavior) direct primary care will likely be the future of
primary care payment. In each of them, it means that the patient will obtain
real assistance to first prevent chronic illnesses from occurring; second,
episodic care for those issues that pop up during the year; third, careful care
of complex chronic illnesses and fourth, thorough coordination of the care of
chronic illnesses, all at a reasonable cost which will be transparent. Fifth
and importantly, a PCP who has the time to listen – to listen deeply with a
return to relationship medicine.
Those who already have
typical limited deductible insurance – commercial or Medicare – might argue
that these various direct primary care models represent an added expense, not a
savings. Correct, although the potential savings can actually be quite
substantial. For example, each of the three practices referred to above make
generic medications available at wholesale prices; considerable savings for
many individuals.
Those who have no
insurance – for whatever reason – will find that they can obtain good quality
primary care at a reasonable price from one of the direct pay or membership
practices. It will cost a lot less than going to an
urgent care center or an ER. Recall from my earlier post that Dr Neuhofel’s
practice has more than two thirds with no insurance.
Perhaps Medicare
and Medicaid will decide that it makes eminently good sense to pay the retainer
for their enrollees and thus ensure that their members gets superior primary
care at a reasonable cost and meantime save Medicare and Medicaid enormous
total dollars.
This concept
applies equally to commercial insurers who have largely avoided paying the
retainer. Some are collaborating with the insurer paying the retainer out of
its premium.
What about
employers? Many are converting their health insurance policies to high
deductible, often with a deductible as high as $10,000 per person or family per
year. For a family with members that have chronic illnesses, the costs of
healthcare will be very substantial indeed at this level. Employees will
arguably feel that their employer has walked away from them and saddled them
with costs that they simply cannot bear. The company can partially offset the
inherent anger this generates among its employees by paying the fee for a direct
primary care practice. It is especially valuable for the individual with
multiple chronic illnesses since quality primary care can mean much better
health, many fewer tests, prescriptions, specialist referrals and
hospitalizations.
I suspect that
employers will be the major reason for direct primary care membership/retainer-based
practice growth in the coming years as they will essentially demand that level
of service for their employees – and in so doing they will be reducing their
company health care costs as a result of high quality primary care.
The exact number of physicians in
DPC practices is unclear but an estimate by Concierge Medicine Today in early 2014 pegs the known number at about 4000 with
about 8000 others doing so but without fanfare. CMT also notes that many
combine insurance with membership fees; not exactly DPC anymore but still an
ability to limit the number of patients and give more attention to each.
More doctors will convert once the
general population understands the advantages and begins to ask for it. There are many
good reasons for an individual to connect with a direct primary care physician -
better quality care, a return to relationship medicine and often a significant
cost savings despite the fee.
TAGS Direct primary care, primary care, primary
care physicians, health insurance, healthcare costs, relationship medicine,
concierge medicine, retainer based medicine
