A common criticism of direct primary care (aka membership/retainer/concierge practices) is the added expense above already hefty insurance payments– “isn’t it too expensive?” They are not. Ways to think about the cost are to prioritize expenditures and to consider potential savings that make it cost-effective while also remembering the benefits to your health and wellness.
What does concierge or direct primary care do for you? It gives you outstanding care at a reasonable cost. Your doctor cares for only about 500–800 patients instead of the typical 2500–3000 individuals. Instead of seeing 24+ patients per day for an average of 10–12 minutes of “face time,” you get same-day or next-day appointments for as long as necessary. You get intensive wellness advice through preventive medicine direction, immediate care of those episodic problems that arise every so often, and complete attention to complex chronic diseases (heart failure, diabetes with complications, etc.) with much less need to refer to specialists.
But when it is necessary for specialists to participate, the PCP plans and coordinates the care process. And most important, the PCP gets to know you as a person, part of a family and a community, developing a caring and trusting relationship. You will have fewer tests, X-rays, and specialist visits, fewer ER visits, and fewer hospitalizations. Some practices offer generic medications at cost and deeply discounted prices through arrangements for imaging and lab tests.
Here are four direct primary care practices to illustrate typical fees. For example, AtlasMD’s (Kansas City, MO) annual fee is $600 for a young adult and about $1200 for someone over age 65; Dr. Neuhofel’s (Lawrence, Kansas) is $708 (adult under age 70) to $948 (70 and older) annually for an individual and $1668 for a family of four.
Drs. Izbicki (Erie, PA) charge $1380 per year per individual 30 and above and $2340 for a family with any number of children under age 19. In Columbia, Maryland, Dr. Sarah Zahaar recently left a Johns Hopkins group practice and began a DPC practice called Oak Tree Primary Care. She charges $99 per month with a 15% discount for those who pay annually, just over $1000 per year. In addition, she has discounts for families and children. From her website, here is a link to a short video on DPC.
As Jon Izbicki told me, “Our monthly fee is less than what it costs to rent a parking space downtown for the month.” Even the more expensive retainer or concierge practices are still within reason for many. $2000 is about $5.50 per day. How many people spend that much per day at Starbucks? Or, consider the monthly/annual cost of internet, mobile phone, cable TV, and streaming.
As of 2021, the average expenditure per month (different organizations reach somewhat different conclusions, but the following is a good average) for internet, cable, and streaming services is $156 per month or $1768 per year. Add to that mobile phone service, and the total is well above $200 per month or $2400 per year. So, perhaps $1500 or $2000 — undoubtedly real money — is not such an onerous expense for comprehensive primary care when prioritizing healthcare expenses relative to other expenses.
Suppose you have a high deductible health insurance plan from your employer or from the exchanges with a health savings account (HSA). In that case, you can pay for the membership/retainer with tax-advantaged dollars and save considerably. And since the PCP will help you avoid digging into the deductible by preventing the need for expensive trips to the specialist, the emergency room, or the hospital, and for excessive laboratory or imaging tests, you will also save those dollars.
I predict that (absent a significant change in insurer behavior) direct primary care will likely be the future of primary care payment. It means that the patient will obtain genuine 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 diseases, and fourth, thorough coordination of the care of chronic illnesses, all at a reasonable cost which will be transparent.
Importantly, you have a PCP who has the time to listen — to listen deeply, resulting in a return to relationship medicine with mutual trust and respect.
Those who already have typically limited deductible insurance — commercial or Medicare — might argue that these various direct primary care models represent an added expense, not a savings. Yes and No. It is an added expense, but the potential savings can be substantial. For example, each of the three practices referred to above makes generic medications available at wholesale prices — considerable savings for many individuals.
Those with 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 much less than going to an urgent care center or an ER.
Perhaps Medicare and Medicaid will decide that it makes eminently good sense to pay the retainer for their enrollees and thus ensure their members get superior primary care at a reasonable cost. Meanwhile, save Medicare and Medicaid enormous total dollars. (In an earlier article, I reviewed what one company, AbsoluteCare, has done to reduce expenses while dramatically improving care for some of Medicaid’s most expensive patients.)
Some companies such as Erickson Senior Living that sponsor Medicare Part C (Medicare Advantage) plans have learned that by using DPC, although it costs more upfront for primary care, the total costs of care come way down, making the DPC investment a “no-brainer.” The image at the top suggests that older people can receive excellent care from a DPC/concierge physician resulting in better health and a longer life.
This concept could apply equally to commercial insurers, but they have largely avoided DPC, retainer, and concierge practices.
What about employers? The average cost per family, per the Kaiser Family Foundation, was about $22,463 in 2022, with the employee contributing $6106. Although KFF notes that the general annual deductible is $1763, many companies have very high deductibles, sometimes as high as $10,000 per family per year. For a family with members that have chronic illnesses, the costs of healthcare are thus substantial, indeed a level that makes one a medical pauper if you or a family member gets sick. In addition, employees will arguably feel their employer has walked away from them and saddled them with costs they cannot bear.
The company can partially offset the inherent anger this generates among its employees by paying the fee for direct primary care practice. It is especially valuable for individuals with multiple chronic illnesses since quality primary care can mean much better health, fewer tests, prescriptions, specialist referrals, and hospitalizations. In addition, since businesses are essentially self-insured using the “insurance company” as the administrator, their costs will decrease with this approach.
The bottom line, the company pays for the DPC doctor but reaps the benefit of lower total costs and a healthier employee who is more content and misses many fewer workdays due to sickness. More details are in my previous article, “Company paid concierge style primary care.”
Once companies recognize this advantage with its increased employee health yet reduced costs, 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 (CMT) in 2022 pegs the known number at about 10–25,000. CMT also notes that many combine insurance with membership fees, e.g., MDVIP; not exactly DPC anymore, but still an ability to limit the number of patients per doctor and give more attention to each.
More doctors will convert once the general population understands the advantages and begins to ask for them and demand them. 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 saving despite the fee. Consider the copay and deductible savings if you spend less time in a specialist’s office and avoid visits to urgent care centers, the ER, and the hospital, including the copays for specialty testing, lab work, and imaging. Most importantly, you will have better health. That is priceless.
This is the 17th in a series on America’s dysfunctional healthcare delivery system. Here are links to the first and a recent article.