Working at the intersection of healthcare and health insurance, I am often asked, “Is there anything we can do to improve outcomes and reduce expenses?”
My reply is always the same: “Only one strategy consistently achieves better care and lower cost: primary care.”
We are failing as benefits consultants and fiduciaries when our plans do not make primary care easily accessible and highly incentivized. In fact, the lack of primary care is highly correlated to most high-cost claimants.
In this blog, we’re going to cover the 4 main types of primary care: Primary Care Provider (PCP), Direct Primary Care (DPC), Advanced Primary Care (APC), and (Virtual Primary Care).
This is the traditional way a patient accesses care through an in-network PCP. PCP providers often work for a hospital system, meaning that they are responsible for many patients—in fact, it’s not unusual for a PCP to be responsible for over 2,000 patients. PCPs often see over 20 patients per day—and that is why they often spend less than 10 minutes with each patient. Their billing method is Fee for Service (FFS). This means that they have codes for everything, and patients are charged a fee for each service. Needless to say, burnout rates for PCP providers are incredibly high.
The DPC Provider is a challenger to the more traditional PCP model. DPC providers do not participate in the complex insurance transactions driven by FFS. Instead, they charge a flat monthly rate regardless of the services rendered.
The monthly cost for DPC is highly correlated to the location, with rural clinics at about half the cost of inner-city locations. In 2023, the price range is $60 to $120 Per Member Per Month (PMPM), with an average of about $75 PMPM. Typically, the plan pays 100% of this cost in exchange for their members receiving about 80% of their healthcare needs from their DPC. In the best arrangements, the DPC refers back to a care coordinator or nurse navigator for anything that they cannot provide like imaging, surgeries, physical therapy, etc.
DPC Providers typically have fewer than 500 patients, allowing them to spend more time with each than their PCP counterparts.
APC evolved out of the DPC model and adds one very important difference: assumption of risk. With a true APC arrangement, the provider organization assumes some portion of cost above a predetermined amount. In other words, they “go at risk” with the client’s health plan. This aligns the primary care providers with the group so they are truly working to improve outcomes and reduce costs. If the group performs better than the expected, (or benchmarked) amount, then they share in the savings. This rewards the APC providers that have engaged with the members and reduced the cost of care for both the employee and the plan.
VPC is a more recent service that blends primary care with telehealth. Unlike Teladoc and other services, true VPC features the same provider for the patient. There are obvious limitations for VPC given the fact that the doctor and patient are not in the same location, but the convenience and low cost are appealing to many patients who don’t need to see a doctor in-person very often. The cost for VPC is typically $10 to $15 per month.
As you can see, the types of primary care vary in methodology and cost but share the common goal of providing consistent care to those in need. A lack of primary care has a direct correlation to higher healthcare costs, which makes one thing clear: any type of primary care is far better than none at all.