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, the standard model of health insurance in the U.S. leaves a lot to be desired. While it does help pay for medical care, billing can often be complex and confusing, a network may limit your choice of doctors, and you may still be forced to pay high out-of-pocket costs.

Patients looking for alternatives to traditional health care have a 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, often including both 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 a way to charge patients without having to go through a third party first. Third-party billing can take up a great deal of time, and requires doctors to see a high number of patients in order to make a profit. Instead, with DPC, doctors can simply charge patients a direct monthly, quarterly, or annual fee.

These fees cover basic care services such as consultations, lab tests, and clinical or other medical services. For any treatments or services outside the basic scope, patients can use their own health plans. High-deductible health plans are on the cheaper end of the health plan spectrum, and so they are often used in this way, 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 and spend more time with each of their patients.

The direct medical care model also reduces overhead expenses and makes the administration side of things much more simple.

How Direct Primary Care Works

Many people who seek health care see the value in paying an all-inclusive, flat-rate fee for unlimited access to their doctor. A 2020 study reported DPC fees can range from around $65 to $85 per month, depending on the provider and services offered.

You might think of this setup like being a member in an exclusive doctor’s office where patients receive personalized care and get to spend quality time with their physician. The average time spent in a doctor's office in the standard model is about is about 13 to 16 minutes, whereas a DPC doctor visit averages at 40 minutes.

Many DPC centers allow other forms of access to your doctor, such as 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 roughly 1,200 DPC practices in the U.S., with more practices expected to open each year.

Advantages and Disadvantages of DPC

The DPC model has much to offer both patients and doctors alike. Patients enjoy the personalized care, and doctors like to practice their craft as it was before the health insurance system forced their care model into a strict payment structure.

Spending more time with patients allows doctors to focus on the patient's overall health, including wellness and lifestyle habits. This simple switch alone may be able to improve health care for patients and doctors alike.

Critics have raised concerns that DPC clinics are not scalable as a standard health care option for most people, since doctors can choose how many patients they see. This setup adds an extra burden on the low supply of primary care doctors, and might also limit a patient's access to health care at a basic level.

Some also argue that the reported savings do not give a true picture of the issue. This is because the people who tend to use DPCs are in good health already, and so by default their health care costs would be lower than those of people who have a chronic illness, for instance.

Also, the DPC model may not be a valid option to those who can't afford a monthly payment. This means that many of the types of patients who have the most to gain from this kind of care can't access it, further adding to the issue of health care inequality across the country.

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," which gives DPC practices more leeway in how they are run.

One downside to the DPC model is that you can't 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.

New laws are on the books to address this issue, including H.R. 3708, also known as the Primary Care Enhancement Act of 2019. In June 2020, shortly after it was introduced, the IRS proposed new regulations to address the DPC payments, which would allow DPC fees to be covered through an employer-provided health reimbursement arrangement or HRA.

Examples of DPC

An example of one of the first working direct primary care providers was Qliance. This DPC was started in 2007 and was backed by Michael Dell, the founder of Dell Computers, and Jeff Bezos, the founder of Amazon. But in June 2017, Qliance ceased and closed its doors.

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. It offers labs, medications, and imaging at a discount.

Note

Most direct primary care practices work at a local level 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 doctor and basic health care through a single fee that you can predict and budget for. It may still be wise to invest in a supplemental health plan for the services not covered by your DPC practice, though.

The DPC model also has downsides, which include not having help when you need more advanced forms of care, or those that are not covered by the DPC. The DPC model also does nothing to help the larger issue of the lack of access to basic health care for those people who can't afford monthly fees.

Whether it's right for you depends on your health, finances, and how you prefer to receive care.