Choosing a Business Model: Direct Primary Care

Ryan Syrek, MA; Philip Eskew, DO, JD, MBA


May 31, 2016

Editor's Note:
From young physicians considering their first practice model to experienced doctors contemplating a change, the advantages and disadvantages of a new situation can be overwhelming. For this third installment in a series examining various business models for physicians, Medscape asked Philip Eskew, DO, JD, MBA—founder and CEO of DPC Frontier, vice president of clinical development and future general counsel at ProactiveMD, and Wyoming Medium Correctional Institution site medical director at Corizon Health—to give us his perspective on the ins and outs of the direct primary care (DPC) model.

Medscape: Could you describe the basics of the DPC model?

Philip Eskew, DO, JD, MBA

Dr Eskew: DPC is type of comprehensive primary care model where the burdens of third-party medicine no longer stand between the physician and the patient. Ongoing care and ease of communication are critical to the success of the model.

Physicians do not bill the patient's insurance, and the associated overhead savings result in the chance to offer affordable prices for patients. Patients often have their physician's email, cell phone number, and so on, and periodic (usually monthly) fees take the place of fee-for-service billing.

A DPC practice is one that (1) charges a periodic fee and (2) does not bill third parties on a fee-for-service basis (at least for its DPC patients), and for which (3) any per-visit fee is less than the monthly equivalent of the periodic fee. This definition is designed to protect practices from being defined as unlawful "insurance" companies. It also distinguishes DPC from concierge medicine models that typically charge higher monthly fees and continue to bill the patient's insurance in addition to the monthly fee.

Most DPC physicians see patients in the office around 40 hours per week. This is usually accomplished with a longer 4-day-per-week schedule or a typical 5-day-per-week schedule. Salary ranges widely vary, reflecting how much the physician wants to work, the acuity of their patient panel, and the amount of the monthly membership fee charged by the practice. In my article published in the Journal of the American Board of Family Medicine , the median monthly price point for patients was $75. However, the monthly periodic fees of practices ranged from $26.67 to $562.50.

Anecdotally, patient panels range from 400 to 1200, and practice overhead can range from 15% to 40%. If we assume a patient panel of around 600, with a monthly price of $70 and an overhead cost of 33%, then the physician's take-home pay would be around $336,000. I would estimate that DPC physicians currently make anywhere from $100,000 to $500,000, depending on the maturity of the practice and amount of work the physician would like to pursue.