How to navigate direct pay successfully
“It’s really tough starting from scratch, but if you have the wherewithal to get by on a minimal income for a while you can do it, especially if you’re in an area where people have to wait a long time to get an appointment with their existing doctor,” he says.
“Where I live is fairly affluent, and I’m surrounded by even more affluent communities,” he says, adding that for some patients regardless of their income, “it’s really important to have their doctor be available at a moment’s notice, to get in the same day, and to not be rushed.”
In addition, Schulman’s practice straddles the direct pay and concierge models, in that he has no third-party payer contracts, but provides his patients with 24/7 access to him. He charges $800 annually for the first member of a family, and $500 for additional members. He also charges per-visit, etc.
Although the Affordable Care Act (ACA) has grabbed much of the healthcare spotlight in recent years, most experts think the law didn’t greatly affect the growth or direction of direct pay, nor will the law’s likely repeal.
On the other hand, the uncertainty surrounding the law’s fate, and what might replace it, could cause more doctors to embrace direct pay, says John Moore, MD. As founder and CEO of Twine Health, an online platform designed to help patients communicate with primary care practices between visits, Moore maintains close contacts with many primary care doctors.
“We’re hearing a lot from primary care docs who were on the fence as to whether they would stick with their current job or jump ship and start a direct primary care practice,” he says. “With the election over they’re saying, ‘I don’t want to sit around cranking away on the hamster wheel [of fee-for-service practice] for another five or 10 years or whatever,’” Moore says. “It’s energizing people to make the change.”
What about those left out?
Despite its appeal, the direct pay model still faces a variety of obstacles to its growth, including state laws and IRS regulations. In addition, some in the medical community worry that its widespread adoption could limit access to care for Medicare patients or those unable to pay a monthly fee.
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The American College of Physicians summarized many of the equity concerns surrounding direct pay practices in a December 2015 article in Annals of Internal Medicine. Among its recommendations to practices thinking of switching to a direct pay model are to:
- Consider the impact that reducing patient panel sizes could have on the local community, and help patients who don’t stay in the practice to find other providers,
- Consider the impact of a retainer fee on patients and the local community, and look for ways to reduce barriers to care for lower-income patients resulting from the fee, and
- Consider the patient-centered medical home as a model that could accomplish many of the same goals as direct pay but without limiting patient access to care
But direct pay advocates say access concerns are exaggerated, or that doctors will find solutions to them. Eskew points out, for example, that because Medicare currently pays less than most commercial payers, many doctors already limit the number of Medicare beneficiaries in their panels. He foresees monthly fees coming down as greater numbers of practices adopt the model, making it more affordable to both Medicare and low-income patients.
Scherger predicts that the spread of direct pay will cause Medicare beneficiaries to use the program more for catastrophic coverage or to cover major medical expenses, while relying on direct pay practices for routine care.
As for lower income Americans being priced out of direct pay, the FMEC’s Bauer notes that most Americans now have cell phones, and the monthly cost of cell phone service is about the same as a direct pay practice. Moreover, he says, removing the constraints imposed by government and commercial payers will enable physicians to solve the access problem on their own.
“If you free the doctors to do what they believe is right while still being able to earn a living,” he says, “they’ll figure it out.”