Doctors at Your Service: An Appraisal of Direct Patient Contracting Practices

By Josh Barrett, M.D. Candidate, Georgetown University School of Medicine

As frustrations with insurance companies and payments have mounted, physicians and patients have increasingly turned to direct patient contracting practices. This form of practice has also been called concierge, boutique, or direct primary care. Such models of care generally involve patients paying out-of-pocket fees for some or all of the services provided by the practice. According to a 2013 survey, 6% of physicians, mostly internists and family physicians, deliver care in one of these direct patient contracting practices. An even more significant 9.6% of physicians managing practices indicated a shift to such a model within three years.

Direct patient contracting practices include one or more of the subsequent aspects: enrollment fees, direct cash payment for healthcare services and a reduced patient panel. The enrollment fee, which varies from several hundred dollars to $15,000 annually, grants patients access to the physician practice and covers routine visits. The patient must pay for certain non-covered services, such as pharmaceuticals or imaging, out-of-pocket or through traditional insurance. Some direct patient contracting practices, however, do not accept any insurance and require cash payments at the time of service. These practices are typically called direct primary care practices. Some direct patient contracting practices accept fewer patients than traditional practices and can provide more personalized attention to enrolled patients.

For some relatively healthy patients, these primary care plans may be a more cost-effective option than traditional insurance. Particularly for patients with high deductibles, the hefty out-of-pocket expenses for routine medical care may be greater than the annual cost of a direct patient contracting service. Furthermore, many patients may appreciate the patient wellness focus and personalized attention of such practices. Particularly for direct primary care, the emphasis on preventive care may both improve patient health and reduce downstream healthcare costs. There have been, however, few objective analyses to determine whether direct patient contracting practices deliver personal or system-wide healthcare savings.

At the same time, these practices have been subject to criticism on ethical grounds, primarily because concierge medicine promotes a two-tiered healthcare system favoring the wealthy. The practice enables affluent individuals to pay for more attentive and comprehensive care compared to those who cannot afford to pay. This barrier to low-income individuals extends to minority patients and patients with chronic disease. One study affirmed such concerns in finding that concierge physicians treat fewer patients with diabetes and fewer African American and Hispanic patients than typical primary care doctors. Furthermore, concierge and direct primary care practices were more likely to be found in more affluent areas with fewer Medicaid or African American patients.

Others are concerned that the appeal of concierge medicine for doctors, particularly the reduced number of patients and increased pay, may entice primary care physicians away from a traditional practice. This could exacerbate the national shortage of primary care providers, particularly in underserved areas. Additionally, healthy patients may be drawn into direct patient contracting practices to take advantage of the potential savings and away from conventional insurance pools. The result would be sicker patients remaining and higher premiums.

As an aspiring physician, practicing in a direct patient contracting practice sounds appealing. Having fewer patients and reduced administrative duties would open more time for each patient. The emphasis on preventive care would deliver more gratifying outcomes for both patients and physicians. Equally enticing are the improved work-life balance and potentially higher compensation compared to traditional insurance reimbursement. At the same time, if I and my peers shun traditional medical practices in large numbers, it could exacerbate the existing primary care workforce shortage and inequities in the system. Perhaps if payers created greater incentives for physicians to go into primary care – particularly through increased time for each patient and fewer administrative burdens, then aspiring physicians will be drawn back into conventional practice.

Editor’s Note: This blog post is part of an occasional series by first year Georgetown medical student Joshua Barrett.

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