By Linda Harder
Based in Annapolis, Md., Evolve Medical Clinic opened in July 2014. Its owner, internist Michael Freedman, MD, initially considered switching to a concierge model in 2008, but feared that many of his patients would not be able to afford the high monthly fee. When considering concierge medicine again in 2012, he decided to try a Direct Primary Care model instead.
In the Evolve model, members pay only $35 a month for unlimited primary care contact. Non-members can be seen à la carte for $85 a visit. Evolve also has cut deals with other healthcare providers to
allow its members to get significant price breaks on pharmacy costs, imaging, lab work, and other expenses when they pay out of pocket. Dr. Freedman estimates that the average member saves thousands of dollars per year, since they can purchase a lower-cost health plan with far lower monthly premiums, and enjoy reduced testing, referrals and procedures, and also less expensive medications.
Dr. Freedman, who works with a nurse practitioner, estimates that about 1,000 members are needed to break even. He also notes that Evolve meets the definition of a PCMH. “This is the future of primary care,” he exclaims. “Everyone has enough ‘skin in the game’ that they want to help people out. Doctors have incentives to advocate for their patients’ health and their wallets.”
While Dr. Freedman offers a B-to-C approach, other Direct Primary Care practices chiefly target employers and groups. Qliance, based in Seattle, is one of the largest with a panel of 50,000 patients. Boston-based Iora Health, which has enrolled about 8,000 members and was recently named by Forbes as one of a handful of organizations to ‘turn healthcare upside down in 2016,’ targets employers, health systems, unions, and insurers like Humana’s Medicare Advantage Plan. Paladina Health, based in Denver, is another significant player in the market.
Dr. Selaru launched Clarii Health in mid 2014. While enrolling members directly, its longer-term goal is to attract area businesses and their employees. Located in a business park with 17,000 employees in Columbia, Md., Clarii Health provides primary care along with a health coach, nutritionist, behavioral health specialist, and support staff.
Clarii Health charges members $75 per month for unlimited 24/7 contact with its providers and free in-office procedures such as spirometry, EKGs and blood work. They set up an onsite pharmacy that can deliver 90-day supplies of generic medications at wholesale costs. For example, Clarii Health patients can purchase a 90-day supply of a blood pressure medication for $2.50 instead of $155 (the price at large, local pharmacy). Additionally, the practice provides its patients with urgent care, such as treating minor lacerations or removing moles.
Dr. Selaru explains, “There are three pillars to our model of care: 1) access to care 2) between-visit care and 3) wholesale laboratory and medication prices. We contract with business owners in the area and offer them near-site services for their employees. When coupled with an appropriate healthcare policy (and we partner with benefit providers who can help), our model saves business owners up to 30 percent in healthcare costs by being available 24/7 via telephone, messages or in-office visits. Our immediate-care services, wellness services, nutrition behavioral therapy, and exercise advice are also free for members.”
He adds, “One of our patients in the traditional model recently needed blood work and paid close to $600 because they hadn’t met their high deductible for the year yet. If the blood work had been done in our office, it would have cost about $50 because we have a contract with a reference lab and we pay them instantly and directly. This is our third pillar. We offer hugely discounted laboratory tests, executivelevel health and wellness assessments and medications.”
Clarii Health employs a health coach with medical training. Each patient is assigned a health coach and a doctor, and the patient’s friends and family may be recruited to be part of their health team. In the future, they plan to establish a network of specialists, including imaging professionals.
Technology Facilitates Care
What most Direct Primary Care practices have in common besides spending more time with patients is that they take advantage of technology, including telehealth and smartphone apps, to facilitate care. Unlike traditional medical providers, Direct Primary Care providers don’t have to worry whether or not they’ll be compensated for these services.
Dr. Freedman notes that Evolve offers its own app that contains a link to GoodRx, which helps patients find the least expensive medications. “If you shop around, there are a lot of market forces at work. That’s one place where physicians and their offices can really help patients.”
Dr. Selaru explains that his patients can connect 24/7 via messages, and that Clarii Health offers web-based as well as smartphone-based apps to help patients stay healthy. “We offer continuous care. For example, if someone has hypertension, we can monitor that daily and the dashboard will alert the physician if their blood pressure is out of range that day. We also can pull in a nutritionist to help patients manage their diets, and a cognitive specialist to address any psychological factors that underlie their obesity.
“If a patient has a rash or bruise, they can take a photo and send it to us for remote evaluation,” he continues. “We also use video conferencing to connect to patients. We no longer have an incentive to have you come to the office. We want what our patients want – for them to be happy and healthy.”
Becoming a Direct Primary Care Practice
While Dr. Freedman loves practicing under the Direct Primary Care model, he acknowledges that getting prospective members to understand how Direct Primary Care works can be challenging, and that launching the clinic was more complicated than he originally anticipated. He observes, “It’s not an easy concept to explain. Having simple explanations like an animated video on our site are good, but we’ve learned it takes multiple touches to get a patient to sign up.”
To start a Direct Primary Care, physicians should expect to have to pay up-front legal fees, and should anticipate additional accounting and software complications. Over time, however, a practice may be able to cut overhead by as much as 40 percent through the DPC model.
Practices must determine if they will completely bypass traditional insurance coverage, including Medicare and Medicaid, and whether they want to qualify for the Affordable Care Act exchanges by being bundled with a wrap-around insurance policy.
Dr. Freedman has found other benefits of the Direct Primary Care model. “I have a stable income that’s not dependent on the number of people I see each day,” he comments. “It’s like a dream come true because I love practicing medicine again.”
He finds that not having to ‘check off the boxes for insurance companies’ makes his practice much more rewarding, noting, “There’s so much beauty outside the walls of insurance.” Dr. Freedman also is convinced that the risk of medical malpractice is much lower with a Direct Primary Care model.
Dr. Selaru concludes, “Direct primary care is to healthcare what Amazon is to the goods industry. We bring so much value.”
Michael Freedman, MD, internist and founder of Evolve Medical Clinic in Annapolis, Md.
Florin Selaru, MD, MBA, founder of Clarii Health in Columbia, Md.