A medical professional taking the blood pressure of a man atop a table
Vital signs during a primary care visit Credit: Pavel Danilyuk

Some doctors say direct this direct-pay model is the future of primary care

Direct primary care differs from more traditional fee-for-service medicine. Can direct care ease the primary care crisis?

America’s healthcare system is in shambles, experts agree. Skyrocketing costs, long wait times and physician burnout – especially since the onset of the Covid pandemic – have brought the system to its knees.

While there is no consensus on exactly how to fix it – or even what problems are the most significant – many professionals in the medical field agree that one specialty, primary care, is the metaphorical frontline of the medical system. Primary care needs to be a top priority if the system is ever going to get fixed.

The primary care crisis

Primary care has been hit particularly hard by two trends in recent decades. While the U.S. is facing a shortage of doctors in all specialties, there is also a shortage of primary care doctors that has been fueled primarily by the fact that medical students are choosing to go into other, higher-paying specialties.

Research also shows that the proportion of total healthcare spending on primary care has gone down over the past decade, with money shifting to other areas. And patients are feeling the pain. In July, ClearHealthCosts did a post on how difficult it is to get an appointment with a primary care provider right now.

Studies find that states with a higher ratio of primary care physicians relative to the population have better health and lesser risk of death from any cause. Research also shows that people who have a primary care physician incur lower medical bills overall.

When primary care is inadequate, the problem can create a cascade effect for patients and the rest of the healthcare ecosystem. Primary care is the setting where most people get their annual physical exams, cancer screenings and immunizations. Missing out on that counseling from their doctors and preventative care means that by the time people get seen by a doctor, their medical problems are further along. At that point, interventions are more serious and the costs of care go up.

Researchers say the primary care situation is only going to get worse. As the population ages and rates of chronic illness continue to rise in the U.S., the wait for treatment will get longer and more expensive. 

Doctors who don’t take insurance

But in the race to improve America’s broken primary care system, one group of doctors say they have a solution that may sound radical: a system where the doctors don’t take insurance at all. It’s called direct primary care (D.P.C.). It has been slowly gaining popularity with patients and doctors for about 20 years, and proponents say it’s anything but radical.

In direct primary care, patients pay their physician directly instead of through a third party, such as an insurance company. Most D.P.C. practices these days use a membership model, under which patients pay a monthly fee for belonging to a practice. Members are entitled to unlimited doctor visits at the practice and most lab tests for little or no extra cost. Some direct primary care groups have separate agreements with specialists in their region that agree to charge a lower rate for members; low-cost medications may also be available to members.

Doctors say this style of medicine allows them to both give the patient better care and maintain a higher quality of life for themselves, leading to less physician burnout – a problem that has skyrocketed since the Covid epidemic began. But critics say D.P.C. doesn’t really solve any problems and at the end of the day, it’s just costing patients more money.

Proponents are quick to point out that, while practically unheard of in the U.S. and other wealthy countries in the 21st century, for most of history third-party payers like insurance companies, H.M.O.’s and even government payers like Medicare and the Veterans Administration didn’t exist.

“My great grandfather was a physician in Kentucky in the 1800s,” said Nick Taber, a physician’s office administrator in Tennessee. “He was doing the exact same thing except he didn’t call it D.P.C., he called it healthcare.”

Basically, he said, paying your doctor directly is the way medicine was practiced before the medical industry became an engine for profits in the mid 20th century and before health insurance was common.

Many medical professionals, patients and activists also point the finger at insurance companies as a main driver of the healthcare system’s dysfunction – primary care included. Both the health insurance industry in general as well as the biggest insurance companies themselves regularly get low customer satisfaction scores.

D.P.C. advocates say that their method, simply cutting out the middleman, can solve primary care’s problems. But critics of the movement say it’s not as great as they say.

The argument for direct primary care

Instead of billing for each appointment or service, “direct primary care” practices charge patients a monthly or annual membership fee in exchange for as many visits they need in the year. That monthly membership might be $50 a month for a person under 21, and $150 a month for someone over 65, as at Gold Direct Care in Salem, Mass., or $39 a month for kids 18 and under, $79 a month for people age 70 and up, and $139 a month for a family, as at Neucare in Lawrence, Kan. 

Bypassing insurance for your medical care may sound strange, but patients sometimes find it has benefits – either to get more services or to actually save money. In the case of direct primary care, doctors say it cuts their administrative costs – both time and money – allowing them to give more and higher-quality time and care to their patients. They don’t have to spend hours on the phone trying to get insurers to pay medical bills.

Surveys show that doctors spend a sixth of their working hours on administrative tasks associated with insurance. For primary care doctors it’s as much half of their hours at work – hours they could be spending with patients. All this, they say, is responsible for all those patients finding themselves in the emergency departments. 

But Dr. Jeff Gold, a direct primary care physician in Salem, Mass., near Boston, said it doesn’t have to be that way.

“When primary care is accessible and allows doctors to do their job, 80% of medical issues can be dealt with in the cheap, affordable setting of primary care,” Gold said in a phone interview. “But when doctors are seeing 20 to 25 people a day in eight-minute increments, you don’t have time to deal with anything.”

With these savings, plus membership fees from their patients, D.P.C. practices get more revenue than the standard fee for service model that insurance pays. This enables them to make a living seeing fewer patients. In turn they can spend more time with each patient. 

The downsides of D.P.C. 

But critics of D.P.C. say it is not the way out of the current primary care crisis and that it costs patients more money without much added benefit.

The most obvious disadvantage is that even though D.P.C. practices don’t take insurance, most patients will still need to buy insurance or use their employer’s insurance benefit – which also costs money. Why? Because you’d need it to pay for pretty much every other type of medical care including for emergencies and specialists. 

Dr. Ed Weissbart is a family medicine physician – one type of primary care doctor – in St. Louis, Mo.

“Even if they purchase a high-deductible plan that includes catastrophic coverage, then they’re going to have to pay [the entire bill] for the [ambulance] and doctor,” Weissbart said. “And that’s gonna bankrupt them.”

Weissbart is a member of Physicians for a National Health Program, a group of medical professionals that lobbies for the U.S. to adopt a government-paid universal health coverage. For him, making patients pay even more for healthcare is not a solution.

But Dr. Gold pointed out that D.P.C. isn’t the only way you pay twice – people with insurance often pay more and get inferior care. 

When insurance requires you to pay part or all of your medical costs or medication, that is also paying twice: You (and often your employer) pay the insurance company a monthly premium so they will pay your bill. When they charge a copay or deductible, that is paying twice.

“When you have a $3,000 or $6,000 deductible, you’re pretty much functionally uninsured.“ Gold said.

At the same time, Medicaid, the state-federal program insuring low-income and disabled people, pays so little that many doctors won’t take it, but emergency departments do. When that happens, patients simply do not go to the doctor.

“The reimbursement is pathetic. So more and more offices are not even accepting it,” Gold said. “So where do they go? They go to the emergency room.”

Furthermore, insurance companies increasingly require doctors and patients to surmount more obstacles before they pay out. For example, insurers requiring prior authorizations have increased dramatically since the pandemic. In 2021, over 35 million prior authorization requests were filed to Medicare Advantage plans alone. The total number is likely much higher.

The bottom line? Patients are overpaying for medical care no matter what. But choosing direct primary care, you get more time and attention from your doctor for that money.

D.P.C. leaves many of the system’s problems unaddressed

Dr. Weissbart pointed out that direct primary care doesn’t do anything to solve the country’s physician shortage, a main driver of the crisis.

“The biggest problem with D.P.C. is that we would need literally three if not five times as many primary care physicians as we have,” Weissbart said.

Going to a doctor who can spend more time and focus on you is great, he said. But cutting down on their patient panel leaves more patients out in the world with fewer doctors.

“The reality is that they see a third or fewer patients and preserve their income,” Weissbart said. “And of course that’s attractive to physicians dealing with our bizarrely dysfunctional multi-payer health insurance model is set up today. So I understand why any physician would be attracted to it, it’s a much easier lifestyle.”

Dr. Weissbart and his colleagues at P.N.H.P. want a different solution. He agrees with all the criticisms of the insurance industry that make D.P.C. look attractive: narrow network restrictions, administrative burden and out-of-pocket expenses. But rather than D.P.C.’s method of paying more to bypass insurance’s red tape, they call for the entire insurance industry to be mostly eliminated and replaced with a single government payer. A growing proportion of Americans say they would like to see that happen.

In addition, the statistics that show Americans are dissatisfied with their coverage apply only to private insurance. Medicare, the taxpayer-funded health plan for retired Americans, is perennially one of the most popular government programs in the country. A single-payer system would also eliminate most of those hours doctors spend on the phone with various insurance companies.

“The right answer is to build on a public health system that we have – that has a proven record of improving health outcomes and lowering costs: Medicare” he said. “Fix what’s wrong with Medicare, the things that need to be improved, and then make it available to everybody.”

Virginia Jeffries is a journalist in New York City. Since 2020, she has reported on long Covid, medical billing and the U.S. vaccine rollout for ClearHealthCosts. She earned a master’s in journalism...