Before transitioning to direct primary care, explore these steps

July 10, 2013

The AAFP suggests exploring the following steps before embarking on a transition to a direct primary care model.

The American Academy of Family Physicians (AAFP) released a new policy on direct primary care (DPC) in March, defining the model as “a contract between a patient and his/her physician provides for regular, recurring monthly revenue to practices which typically replaces traditional fee-for-service billing to third party insurance plan providers.”

The AAFP says the model can be successful in stabilizing practice finances while at the same time allowing the physician and practice staff to focus more attention on patient needs and health outcomes than coding and billing because contract fees cover all of the primary care costs. Many patients of DPC practices still opt to carry some insurance, usually a high-deductible plan for major health events that must be handled outside of primary care, AAFP notes.

AAFP’s Board Chair Glen Stream, MD, MBI, says the number of AAFP members who have developed DPC practices is small but growing, adding, “there is more than one way to build a PCMH.”

“The model eliminates the insurance middleman and provides revenue directly to the practice to innovate in both customer service and quality of care for the patients they serve,” Stream says. “This is one option that is particularly well-suited for small family medicine practices that are struggling financially in environments not yet supporting PCMH with a viable payment model.”

The AAFP suggests exploring the following steps before embarking on a transition
to a DPC model:

Conduct a practice evaluation to determine the benefits of transforming to a DPC practice. Consider whether physicians in the practice want to spend more time with patients and would be willing to see fewer patients. Gauge the current practice management environment and insurance carrier contracts, deciding which could be carried over to a DPC. Finally, assess whether the current patient base would be receptive to the transition to a DPC clinic and whether there would be enough interest to maintain a table patient panel.

Meet with legal consultants for insight on state and local regulations governing retainer-based healthcare models.

Contact national DPC/concierge franchise operators to explore opportunities to establish a DPC practice under a franchise contract. Franchises usually charge a percentage of the practice’s retainer fee but offer proven business models and a host of practice resources such as manuals, marketing materials, legal staff and operating guidelines.

Inform patients about the transition and remain as transparent as possible throughout the process. Work with patients who choose not to participate in the new model to find a new primary care physician.