“So where does the line exist between charging too much vs. not charging enough? Shouldn’t the line be drawn between how many practices stay open to deliver this this type of care and those that don’t? If we “zoom out” from this discussion and think about the long-term value of these models, the conversation needs to be broadened. Both models will benefit from continuous transparency, but think about the benefit to consumers if DPC & Concierge Medicine broaden the conversation to include measured disease regression.” ~S. Horner
In 2018 … When DPC (Direct Primary Care) Journal DPC Physician readers were asked last month (Dec. 2017), “Do you plan to increase your monthly membership/subscription fee?”, nearly 37% of DPC Physicians polled said “NO. Staying the same as the 2015, 2016 and 2017 calendar years.” Additionally, 61% of DPC Physicians said “No. It will remain the same as the 2017 calendar year.” Are we left to now read these tea leaves as 61% of DPC Clinics adjust for inflation roughly every other year in the subscription-based pricing model? And, are we now to presume that 37% of DPC Physicians have not adjusted their monthly or annual fees in the the past three to four years?
RELATED STORY | Direct PRIMARY CARE | DPC | BUSINESS Side of Medicine
EDITOR: Is DPC zigging and zagging, responding to the pressures of the marketplace?
DEC 2018 | By DPC Journal Staff
Once upon a time, a Direct Primary Care (DPC) monthly PMPM (per member, per month) subscription fee above $100/pmpm was regarded by many Patients and Physicians alike as Concierge Medicine. Good or bad, positive or negative, today with many individual DPC Physicians recognizing DPC as for the masses the low monthly subscription fee means they must see more patients to scale. Today, we DPC fees are on the rise, as high as $150-$200 and higher. Will this create a branding problem for those in DPC in the future ahead?
One Physician recently wrote There are so few innovations in primary care. But it’s the entry point to all of your healthcare expenses. There have been three scalable primary care innovations: Telehealth; Retail Health clinics (Walgreens, Minute Clinic, etc.); and, Virtual Primary Care. These three innovations need to be evaluated based on two questions … How capable are they at handling real world problems? How cost-effective are they?
Which today, leads us into an interesting discussion. That being, where does DPC fit?
In 2017, we at the DPC Journal tracked polling trend lines and observed positive reductions in DPC wait-times by more than 10-minutes per patient, per visit, the use of robust telemedicine platforms to communicate more securely with Patients and increases in monthly membership fees between $20-$50/pmpm. Consumer awareness about the DPC program(s) offered was moderately on the rise as was curiosity on how HSAs will play a role in [e.g. DPC] subscription fees in the future.
“Don’t get me wrong, I’m a huge fan of DPC,” writes one Physician on LinkedIn. “When it is for the right person. For the vast majority of people, DPC is overkill because most working age people (e.g. Millennials and Gen Xers) which DPC is appealing to do not need that level of care at that expense. If primary care was the end all, be all solution, that’d be fine. But it’s often not.”
There is a thought out there that DPC is the one size fits all approach to solving the spider web of problems in healthcare. From over-burdened Physicians, salaries and pay increases, costs for primary care, and so many more. But those outside observers and inside experts in the DPC space see DPC as a sort of larger puzzle piece in the artwork today that is healthcare.
Enter, the free market healthcare delivery family tree.
DPC is one albeit, young branch on the tree of free market healthcare. That branch is getting older and with age, it will become more mature and grow in size, coverage and breadth.
Throughout 2017 alone, The DPC Journal observed that monthly Direct Primary Care subscription fee increases rose by $20-$50/pmpm. In May of 2018, nearly 8/10 monthly DPC subscription fees are now trending between $51-$99/pmpm, an escalation in pmpm fees from the past couple of years where most DPC pmpm fees ranged between $25-$85.
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An example of DPC program and/or practice characteristics may include:
- A recent statement by the AAPS (May 16, 2018 at 21:51pm EST) stated … It properly stands for Direct Patient Care and requires mutual agreement between patient and physician about what care is expected and how much it will cost.
- Patients are charged a monthly or annual fee for a defined set of health-care services.
- These plans do not have any third parties or charge fees for any services covered under the membership plan.
- Per-visit charges are less than the periodic membership fee.
Retail Clinics: State Regulatory Issues
With Direct Primary Care openings trending to the younger demographic of Physicians in their 30’s-40’s, hanging a sign on the building and unlocking the door to grow a Direct Primary Care practice is not as easy as some have thought.
According to The Direct Primary Care Journal national polling trends and stats, in 2017 and also in 2018, national polling trend lines around the following should be watched carefully. That includes:
- 47% of Physicians reported that they went into debt to start their DPC medical practice.
- Approximately 68% of new DPC physicians state they are between the ages of 30-49.
- 23% of DPC Journal polling respondents indicated that they will not join another network.
- The DPC Journal finds that 41% of practices are female DPC Doctor-owned clinics under the age of 49. Conversely, 36% stated they are male DPC Doctor-owned practices and under the age of 49.
- Nearly 10% of DPC Physician polling respondents stated that they believe some DPC clinics today won’t be able to stay in operation due to lack of local consumer interest. The DPC Journal also found that closures of DPC clinics are not being closely monitored nor reported.
- Patients inside DPC subscription programs typically are of the Millennial (27%) and Gen-X (38%) demographic segments.
A recent report by the National Retail Federation surveyed consumers from four generations to see how those generational influences affect how they purchase products. Of course, some differences in purchase behavior can be attributed to life stage and income: a 25-year-old single professional is going to need to purchase a very different set of items than a 65-year-old retired grandparent. But what this study highlights is how 25-year-old millennials and 65-year-old baby boomers search for products, how they want to buy a product, and what they expect from the companies with which they do business. They also stated that Loyalty doesn’t always mean the same thing. When it comes to expressing loyalty, baby boomers and the Silent Generation are more likely to shop at one location. Millennials and Gen Xers are more likely to seek out a specific brand.
Affirm, a New Jersey chartered commercial bank, recently stated Millennials are a tricky demographic for merchants to categorize given their high student-loan debt and healthy dose of financial skepticism. Millennials weigh the integrity of a business model against their own set of values. As such, brands that align with a social cause are big attractors. A great example is Toms Shoes, a footwear company that donates a pair of shoes for every pair of shoes purchased by a consumer. Of course, this type of commitment has to be sincere to have a positive effect. The opposite is also true. If Millennials think a company is coming from a questionable background, they’re more likely to avoid purchasing.
Are Physicians today good at having a view of what Millennial and Generation X Patients are doing with them?
“They want and expect that their Doctor will be ‘present’ and ‘mentally’ dialed-in. We’re hearing routinely that they will leave your [DPC] practice in a matter of weeks if they feel they are not a priority. That’s not fair, but it’s true … While the human spirit is willing to forgive your colleagues for long wait times, errors, staffing, etc., Patients will remember and share what their last Doctor’s office visit was like.” said Michael Tetreault, Editor of CMT/The DPC Journal.
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Opportunity is knocking to exceed Patient Expectations.
- The DPC Journal finds the average wait time at a DPC practice is less than 10-minutes.
- The DPC Journal also finds that 16% hope DPC Doctors can work/partner with more businesses to save healthcare costs for employees in their local area.
In January of 2018 and began to ask prospective patients seeking care from a subscription-based healthcare provider [e.g. DPC alone] across the U.S. to choose ‘Cost’ or ‘Convenience’ over ‘Friendship’ with a Doctor they know, like and can trust. Early findings from this survey are telling us that 62% of Patients want and choose … ‘Friendship with a Physician they can get to know, like and want to trust!’ In Contrast, when Physicians are asked the same question, they ranked what they considered most important to their Patient which was Cost as most important (e.g. 46%) followed closely by Finding A Doctor I Know Like & Can Trust (e.g. 42%).
The DPC Journal surveyed over 1,100 actively seeking patients from across the U.S. in 2017 and asked them about their overall ‘faith’ in a general Physician in today’s healthcare marketplace. Nearly 60% of those participants surveyed said ‘If DPC was not an option, they would NOT select an M.D. for their next primary care visit. 34% said they would prefer to see a Doctor of Osteopathic (D.O.) Medicine; 14% would prefer to see a Nurse Practitioner (N.P.) and 7% would prefer to see a Physicians Assistant (P.A.).
“I like the concept and I am having to leave my DPC physician I am with now,” said a Gen-Xer in our survey response.
Andrew Mantis, executive vice president of checkout tracking at NPD Group, appeared on the Knowledge@Wharton show on Wharton Business Radio on SiriusXM channel 111, to talk about what they’ve discovered about our retail proclivities. He said in the interview “Retailers are good at having a view of what customers are doing with them. But they don’t have an easy way to understand how consumers’ behaviors are changing outside of their stores. What we’re able to provide are two things: one, a very transparent view to where else their consumers are buying with competitors, which obviously is actionable. You can change your assortments, your merchandising, your pricing strategies and your marketing. But two, with the holistic view, we can see the overall trends — the macro trends that tie to the generations that form some of the bigger strategies. If I were to give you a sound bite on millennials, I’d say, OK, we know they’re health conscious. But when they want to splurge a bit, they’re going to In-And-Out Burger. It fits their lifestyle. They want value and quality. So they may be going to Nordstrom Rack and Nordstrom. They like physical and digital goods. They’re spending more and more of their discretionary income on things like these mobile game downloads. And what we talked about earlier with apps, it’s multichannel. So for us, what I think is, you’ve got a lot of really great short-term tactics that the data can help with, and then also inform these macro-buying trends.”
Addressing Retail Clinic Challenges Will Likely Start Becoming Larger Obstacle for DPC Practices targeting Individual Consumers In Their Local Areas.
Research conducted by Kalorama suggests the popularity of retail clinics represents a trend towards newer healthcare models that challenge existing models of care, and which could severely impact hospitals, clinical laboratories, and pathology groups. This increased use of retail clinics is a mixed blessing. On one hand, easy accessibility, low-wait times, and flexibility combined with lower costs for basic care is a boon for certain patients. On the other hand, this emergent healthcare model requires that traditional healthcare facilities address the impact of retail clinics on traditional practices, patient care, and regulatory standards. Here are five reasons why retail clinics could threaten traditional healthcare models:
- Retail Clinics Disrupt the Normal Healthcare Delivery Environment (Read Full Article …)
- Retail Clinics Increase Competition for Primary Care Practices (Read Full Article …)
- Retail Clinic Challenge for DPC: Retail Clinics Rely on Sophisticated Analytics. Since CMS has indicated their plans to take a critical look at diagnoses established during in-home Medicare Advantage patient risk assessments, retail clinics provide both patients and health plans an ideal, convenient alternative. In addition to the benefit of establishing diagnoses in a clinical setting, providers such as Healthcare Clinic at select Walgreens offer services such as vaccinations and biometric testing. They can also counsel patients on the need to refill prescriptions to close gaps in care and provide valuable patient education. To successfully serve patients, health plans, and other providers, retail clinics must have sophisticated assessment and communications systems. The most valuable system for retail clinicians is one that guides them through the encounter, ensuring the right questions are asked and no care gaps are missed. It should then allow them to create an electronic encounter summary for transmission to the patient’s community of care providers and the health plan. Ideally, those patient assessments should be driven by analytics. For example, all 400+ Healthcare Clinic at select Walgreens locations have Inovalon’s ePASS® decision support platform available to leverage predictive analytics to give providers point-of-care insights into possible diagnoses and necessary care improvement. Studies have shown that data-driven assessments significantly improve risk score accuracy and patient quality outcomes as compared to those assessments that do not provide patient-specific actionable information. These data-driven assessments establish a new level of lower delivery cost, efficiency, thoroughness in documentation, evidence-based standards, and measureable impact, providing the ultimate combination of the right focus on the right issues for the right patients at the right time.
If you have a regular doctor who communicates with you via messaging, photos, health data, phone, and video, and can order tests and take ownership of your outcome from beginning to end, those doctors can handle ~1450 diagnoses. A month of this care costs $99 or $270 per patient per year.
All of this is food for thought in the practice of your DPC business. You might not agree completely with all that we’ve shared here and that is okay. However, you should be aware of what is ahead.