Why DPC is the pandemic-proof primary care model we need

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January 5, 2021

Why DPC is the pandemic-proof primary care model we need

The COVID-19 pandemic has dramatically disrupted daily life in the United States, devastating many industries and testing the limits of our health system. It has challenged American health care in ways that extend far beyond overwhelmed hospitals and overworked professionals, revealing the underlying problems, disparities and inefficiencies that existed long before the novel coronavirus came along.

Primary care providers have been particularly hard hit, suffering substantial financial losses and significant changes that threaten the survival of many traditional practices.

The fallout

According to a study conducted by Harvard Medical School and the American Board of Family Medicine, drastic declines in patient office visits due to the coronavirus are projected to cost U.S. primary care practices $15 billion. That’s more than $65,000 in lost revenue per physician in 2020, an amount that is expected to double if there is a second viral peak later in the year or payments for telehealth revert to pre-pandemic levels. Such losses likely would force many private practices to close their doors.

Consequently, this is affecting the clinicians. A recent COVID-19 Primary Care Survey, led by the Larry A. Green Center and the Primary Care Collaborative, found that 55% of clinicians have a stress level of four or five out of a possible five. While 33% reported their stress was worse nearly five months into the pandemic than it was in the first month. The survey said coronavirus implications risk the “potential collapse” of the primary care system and independent practice.

All of this would have unfortunate consequences on health care quality and access in America. Primary care is critical both to limiting the spread of COVID-19 and treating the underlying health problems that make the virus more deadly, as well as the mental health issues that have resulted from social distancing.

The opportunity

Out of crisis, however, comes opportunity. While the pandemic has highlighted the fragility of our primary care system, it has also demonstrated the promise of a viable alternative. Direct primary care (DPC) features a direct billing and payment arrangement between organizations – such as employers or unions – and medical providers without sending claims to insurance providers. Though DPC has been around for more than a decade in the U.S., its popularity has surged in recent months, thanks to its ability to endure and excel in the most difficult financial circumstances.

In direct primary care, providers are paid a predetermined fee per-member-per-month, regardless of the number of visits or type of visit (i.e. in-person or virtual).

Many traditional primary care practices, including those analyzed in the Harvard DPC cost study, are reimbursed on a fee-for-service basis. This means that they are not getting paid if, say, social-distancing patients are not coming through the doors because of exposure concerns. And prior to COVID-19, these same providers were being paid little, if anything, for virtual visits.

The benefits of a flat fee structure

The Harvard study examined the value of primary care practices being paid a flat fee per patient. Researchers found that even a low, per-member set amount could neutralize projected revenue losses and that such capitated payments could keep many practices from closing.

With the DPC model, not only do practices stabilize their revenue streams, but also physicians are able to focus more on preventive health and effectively managing chronic issues like diabetes, hypertension and obesity. These patient health problems are some of the most expensive to treat, and they contribute to complications in people infected with COVID-19 and other viruses, including the seasonal flu.

In addition, direct primary care can offer appropriate medical services 24/7 through telehealth, which has become the preferred delivery method during the pandemic. Many DPC clinics are equipped to handle patient visits via virtual care (phone or video), staving off high medical costs in the case of employer-sponsored health coverage and saving vacant hospital beds for emergencies or coronavirus treatment.

With reimbursement based on a fixed per-member fee, rather than a fee for services rendered, DPC providers are not deterred from treating patients virtually and doing so does not threaten their ability to keep their doors open.

Managing COVID-19 risks

By concentrating on preventive care and utilizing telehealth, DPC clinics can proactively manage the spread and repercussions of the coronavirus.

Armed with sophisticated data systems and proprietary algorithms, some of these providers are leveraging artificial intelligence to identify patients with risk factors that make them more vulnerable to complications. This intelligence has also proved valuable as DPC providers partner with employers and sponsoring organizations to help them identify common risk factors within their covered populations and proactively get ahead of health risks that could threaten employee wellness, productivity and, ultimately, overall health care costs.

America cannot afford to lose primary care providers at a time when they are needed most. The country requires a viable, fully functioning primary care system, which can handle its pent-up health care needs and focus on controlling major chronic medical conditions that affect overall health and make people more vulnerable to any virus.

We know that effective primary care makes a difference. Areas of the United States with increased levels of primary care capacity have seen significant improvements in life expectancy. We must do a better job of adopting care models that are effective in meeting patient needs while also creating sustainable revenue streams. Amid the chaos of COVID-19, in the uncertainty of its aftermath and looking ahead to a – hopefully – post-pandemic future, direct primary care has proven more valuable and relevant than ever.

To learn more about direct primary care, contact Paladina Health.

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