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Frequently Asked Questions About the Direct Primary Care (DPC) Model

  • Aug 11
  • 7 min read

Despite many threads in our online communities for doctors about direct primary care, many physicians - particularly those outside of primary care, but even practicing family medicine physicians - are unclear on what the direct primary care practice model entails. This article is geared towards addressing the most common misconceptions about DPC, as well as answering frequently asked questions in our communities, including which patient populations direct primary or specialty care practices serve, the ethics of a DPC practice, costs of a DPC practice, and how much you can earn in a DPC or direct specialty care (DSC) practice.


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5 often misunderstood facts about the direct primary care (DPC) model for private medical practices


Question: What exactly is direct primary care (DPC), and how is it so different from traditional primary care?


Direct primary care (DPC) practices have exploded recently, both because of the attractive model for physicians as well as the demand from patients. In this model of care delivery, patients pay a flat monthly membership fee to their doctor’s practice for routine medical care, instead of paying for their doctors visit with insurance. As this is a membership model, there are no co-pays, and depending on how the practice is structured, there’s usually no limit on how much they can interact with their doctors. These practices don’t take insurance, so doctors don’t have to worry about credentialing, prior authorizations, or otherwise dealing with insurance companies.


Of note, the patients in the practices may still have insurance (especially catastrophic insurance), but the point of the direct primary care model is to offer an alternative model where the doctor offers accessible care at an affordable price to a select number of patients. These practices are therefore able to run relatively lean without the administrative burden that comes with insurance based care, like billing and coding staff, lots of front desk staff to handle front office tasks, etc.


Learn more about the direct primary care model.



Question: Why is this subscription model becoming so popular amongst patients and physicians?


Because the practices charge the membership fee, they don’t need to have as large patient panels as most insurance based practices do. Though these numbers can vary widely, a typical direct primary care practices can afford to have approximately 500 patients and charge about $75/month (500 x 75 x 12 = $450,000, which after lean overhead still allows for a viable practice). Remember that most insurance based primary care physicians have a few thousand patients. Thus, the DPC model can allow for:


  • Same day or next day visits, reducing the need for urgent care or emergency room visits

  • Longer appointment times

  • More ability to directly communicate with your physician

  • A greater focus on things like preventative care


Many patients and physicians report that this type of practice allows for greater joy in the doctor-patient relationship, and more impactful primary care. Additionally, the fact is that an annual membership to most DPC practices is less than most insurance deductibles, so unless you’re only getting what’s covered by insurance, you may be paying this amount of money anyways for sick visits or labs, even with insurance. 


So many primary care physicians report that DPC has allowed them to avoid burnout and enjoy the heart of what they do. Therefore, it’s not surprising that physicians on our communities often respond to questions from burnt out primary care physicians with, “try direct primary care instead of leaving clinical medicine!”



Question: So, is DPC just concierge medicine?


No, in fact - it’s very different. Concierge practices do charge a membership, but they also bill insurance. Concierge medicine tends to be for those who are able to pay the extra premium for access, whereas direct primary care is actually usually quite affordable for patients, especially those who would pay a large amount in co-pays, co-insurance, deductibles, etc. DPC practices usually also offer lower cost labs, imaging, or access to meds. The fact is that insurance based medicine charges a lot for even routine labs.


There are also a lot of uninsured (or underinsured) patients who just cannot afford quality health insurance because of how high health insurance premiums have gotten. If you think about how much you or your employer pays for health insurance, it’s usually several hundred to a thousand dollars a month. In comparison, many DPCs charge less than $100/month, and even those charging more premium prices fall between $100-200/month. This can be wonderful for unemployed, self-employed, or underinsured patients as well as small business owners or others for whom traditional insurance is unaffordable.


Additionally, because DPC doctors aren’t held to insurance rules, they may be able to reduce costs or provide free care to a certain number of patients.



Similarities & differences between direct primary care and concierge medicine


Question: How much can you make as a primary care physician doing DPC?


Obviously, the answer here is that it depends, because it will depend on what you charge for your membership fees, how large of a patient panel you maintain, how much overhead you have in your practice, and how many ancillary income streams you create within your practice. As alluded to above, many DPC physicians charge between 75-150 per month and have between 300-800 patients. Most mature DPC patient panels do tap out around 500-700 members because otherwise it will often come at the cost of shorter appointment times or longer working hours. Let’s look at some examples of potential revenue.


Base annual recurring revenue:

300 patients × $100/month = $360,000 annual recurring revenue

500 patients × $100/month = $600,000 annual recurring revenue

800 patients × $100/month = $960,000 annual recurring revenue


Of course, revenue is not the same as net profit, so you’ll have to deduct overhead costs such as your rent, staffing, malpractice insurance, software, and supplies. That said, you can see how a busy DPC practice can still be quite profitable, while still seeing less patients than a traditional insurance based panel that’s typically in the thousands of patients range.



Question: How long does it take to build a successful direct primary care practice?


This will depend on a number of factors - how many patients you’re starting out with (are they following you from another practice, or are you converting an existing practice to primary care?), market demand and patient demographics in your area, referral base, and how successfully you market your practice. Most DPC physicians in our physician communities say they can build a hundred to a few hundred patients within the first year. 




Question: Will I need to opt out of Medicare?


Because Medicare rules are so complicated, many DPC physicians do choose to opt out of Medicare.


Read more about the complexities of this in our article, “Can I Treat Medicare Patients in a Direct Primary Care (DPC) Model?”



Question: Okay, okay, I’ve heard a lot of great things about DPC. What’s the catch? Are there any downsides to direct primary care?


Running a direct primary care practice does come with some risk and financial investment, as well as the need to learn a skillset most physicians are unfamiliar with - running a business and a private practice. You’re going to have to learn about how to run lean and how to market your practice, as you won’t get patients through traditional insurance panels.


Additionally, when your patients are paying for membership, they will want understandably want access to you. This may mean less time truly off during nights, weekends, holidays, and vacations. Many direct primary care doctors arrange for colleagues to provide coverage so that they can get some time off, but if you do this very often, your patients may not feel that they’re getting that close relationship that they’re paying for. 


Many direct primary care practices also are solo practices or at most have one or two other doctors (obviously there are some exceptions). If you’re someone that likes having a lot of colleagues or staff at work, you may find DPC a little more lonely, as you’ll likely keep staff low to keep overhead low, and you may not have colleagues daily.


Don’t underestimate how hard it is to run a business. Marketing, thinking of new ideas for ancillary income streams, running pro formas, etc can be another full time job. Direct primary care is not a cush alternative to traditional primary care - it’s just a different way to be there for your patients. You’ll have to decide if that’s right for you.


Learn more about the pros and cons of private practice.



Conclusion


Direct primary care practices are rapidly becoming popular amongst primary care physicians who want more time with their patients and who are frustrated with insurance based care. There are many upsides to direct primary care practices, but it’s not easy and you don’t necessarily make more - it’s more that you practice medicine differently in a way that allows for a closer relationship with your patients. You’ll need to learn a new skillset in terms of running a business, and you’ll have to be accessible to your patients. You’ll also need to assess your market to see whether you think a DPC practice would thrive.



Related resources for direct primary care physicians


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