Direct Primary Care Alternatives to Health Insurance

Is Direct Primary Care a Good Alternative to Health Insurance?

Female doctor with senior patient
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For many people, traditional health insurance leaves a lot to be desired. While it does help pay for medical care, billing can often be complicated, a network may limit your choice of doctors, and you may still have high out-of-pocket costs.

Patients looking for alternatives to traditional health care can consider a relatively new option: the direct primary care (DPC) model. With DPC, you pay a monthly fee to a health care provider's practice. In exchange, you have access to a doctor, typically including in-person and telehealth visits.

Learn more about the DPC model and how it works.

What Is Direct Primary Care?

DPC gives primary care physicians an alternative to third-party billing, which takes up a significant amount of time and requires doctors to see a high number of patients. Instead, doctors charge patients monthly, quarterly, or annual fees.

These fees cover primary care services such as consultations, laboratory tests, and clinical or other medical services. Patients can use health insurance—often a high-deductible insurance plan—to cover emergency expenses and other expenses not covered by the DPC plan.

The model aims to improve patient care and provide for the whole person. As a result, doctors in a DPC practice are able to provide longer appointments with their patients, spending more time with them.

Direct medical care also reduces overhead expenses and simplifies administrative work.

How Direct Primary Care Works

Paying an all-inclusive, flat-rate fee for unlimited access to a primary care physician is an attractive option for some patients. A 2020 study reported DPC fees typically range from $65 to $85 per month, depending on the provider and services offered.

You might think of this as paying for an exclusive membership at a doctor’s office where patients receive personalized care and spend quality time with their physician. The average time spent in a traditional doctor's about is about 13 to 16 minutes, whereas a DPC doctor visit averages at 40 minutes.

Many DPC centers allow additional access to your doctor through phone and text, the ability to schedule an appointment for the same or next day, and even in some cases, home visits. Medications, imaging services, and lab tests often are available at a discount to the patient.

Note

There are approximately 1,200 DPC practices in the U.S with more practices expected to open every year.

Advantages and Disadvantages of DPC

The DPC model can be beneficial to patients and doctors alike. Patients enjoy the personalized attention and doctors like to practice medicine as it was before health insurance became prevalent.

Spending more time with patients gives doctors the ability to focus on the patient's overall health, including wellness and lifestyle improvements. It has the potential to simplify health care for patients and doctors alike.

Critics have raised concerns that DPC clinics are not scalable as a general primary care option since doctors can choose how many patients they see. This arrangement adds an extra burden on the limited supply of primary care doctors and potentially limits a patient's access to healthcare.

There is an argument that the reported savings are inflated because healthier people tend to use DPCs and therefore their health costs would naturally be lower than someone with a chronic illness.

Additionally, the DPC model may not be available to those who can't afford a monthly payment. This means that some patients who could most benefit from this kind of care can't access it, contributing to health care inequality.

Note

Thirty-two states and 12 pending have enacted laws seeking to redefine direct primary care practices as a "medical service outside of state insurance regulation" and should not be regulated as such.

Another disadvantage is the inability to use funds from a health savings account (HSA) to pay for direct primary care. This is because the Internal Revenue Service sees your monthly fees as insurance payments, and you can't use HSA funds to pay health insurance premiums.

Legislation continues to be introduced to address this issue, including H.R. 3708—Primary Care Enhancement Act of 2019. Shortly after, in June 2020 the IRS proposed new regulations addressing the DPC payments, allowing reimbursements through an employer-provided health reimbursement arrangement or HRA.

Examples of DPC

An example of one of the first successful direct primary care providers was Qliance. This DPC provider was started in 2007 in the state of Washington and was backed by Michael Dell, the founder of Dell Computers, and Jeff Bezos, the founder of Amazon. However, in June 2017, Qliance ceased operations.

Another example is Direct Primary Care in Spokane, Washington. It has a fee for adults aged 39 or younger, a higher fee for adults aged 40 and older, and a low fee for children. Labs, medications, and imaging are available at a discount.

Note

Most direct primary care practices operate locally with doctors who have built their own practices.

Is DPC Worth It?

As with so many things in life, the answer to whether DPC is worth it is: It depends.

On the plus side, you have access to a physician through a monthly, quarterly, or yearly fee. A supplemental health insurance policy may still be a good idea for the services not covered by your DPC practice, though.

The DPC model also has disadvantages, which include not having assistance in navigating specialized care covered by health insurance, as well as the lack of accessibility to those with limited resources.

Whether it's right for you depends on your health, finances, and preferences for receiving care.