Boutique Medicine: Primary care finds place in health care market

As the American health care system continues to adjust to the Affordable Care Act, a new type of medical practice is surfacing in Springfield.

Enter direct primary care, a business model some independent area physicians see as the means of addressing the industry mantra to provide higher quality care at reduced costs. The most noticeable difference is in lieu of accepting insurance or co-pays, DPCs, aka boutique medicine, instead require patients to pay a monthly membership fee – locally ranging from $15 to $150 – that covers services such as minor stitches, skin procedures and biopsies. Labs and generic medications also are cheaper at DPCs because they lack the overhead costs of large health care system providers, according to the practice physicians.

Equality Healthcare LLC co-owners Drs. Shelby Smith, Mark Chambers and Teresa Troy left Cox Family Medicine Associates in June 2015 to start their practice six months later in downtown’s College Station. The physicians say the move primarily was made out of frustration.

“We had hoped the ACA would have a positive impact for health care and physicians but it seemed that we had started to work more for insurance companies and no longer for our patients – and really no longer for CoxHealth,” Chambers said. “We had to treat and code them differently based on their insurance, and the whole time we’re being graded on their patient satisfaction.”

Smith said the doctors’ downtown venture is an attempt to fix patient complaints by providing hour-long and sometimes same-day appointments along with cost transparency – things he said aren’t possible under the reigning status quo.

“Everybody gripes about the health care system, but it feels good to actually be doing something about it,” Smith said. Declining to disclose company revenues, he noted the practice is meeting costs two months into opening. “With ACA, coverage was expanded but nothing was done to bend the cost curve down. [DPCs] are bending it, and people are taking notice of it.”

New directions
David Raney, CoxHealth Network business development vice president, agrees many frustrations primary care physicians experience stem from changes by large health care providers, such as those noted by Smith, a greater emphasis on documentation of care and meeting quality performance metrics. Raney said the ACA changes are a move in the right direction, but can exacerbate the problem of patient access.

“We’re asking physicians who went to school so they could heal people to spend more time documenting what they’re doing and proving they’re hitting certain marks, and it’s creating some burnout on their part,” he said. “In the long run, I think we’re all better off for that, because we have processes that will lead to higher quality.”

Part of the quality equation for DPC doctors is seeing fewer patients. Command Family Medicine owner Dr. Luke Van Kirk said his solo practice in east Springfield serves 175 patients and is profitable roughly three months into the venture, but declined to disclose current revenues. Like each of the Equality physicians, he has a self-imposed cap of 600 patients.

“It’s more profitable for the vast majority of primary care doctors, unless they’re moonlighting on the weekend,” Van Kirk said of the DPC model’s guaranteed income advantage over the fee-for-service procedures in large systems.

Chambers estimated the former CoxHealth practitioners each handled around 2,400 patients while part of the larger system.

“We think direct primary care can do well on its own independently, but we still need the Coxes and Mercies to do all that acute care,” Chambers said. “That’s the way it should be. That’s why subspecialists are there.”

Raney believes there’s no animosity between CoxHealth and the former employees. The provider is tracking results Springfield’s DPCs have in improving population health versus lowering expenses.

“It’s certainly a disruption in the market, and that’s never a bad thing because it causes us to innovate,” said Raney. “It’s at least causing us to pay attention to things we could do better, but it hasn’t proliferated enough to where we see it as competition.”

Business considerations
For doctors, the freedom to practice medicine the way they want also comes with the challenge of running a business. Lacking most of the support staff typically found in large system environments – Equality employs one nurse while Command plans to hire one – the doctors must handle front-office operations as well as the exam room.

“I think we were unique because we had been practicing for so long we knew how an office was run, whereas someone just coming out might not know they should keep temperature logs – all the stuff that needs to be done,” Equality’s Troy said.

Van Kirk, who started his practice after completing a residency with CoxHealth in June 2015, said he expects the model will be an attractive option for students fresh out of school, noting physicians established under a large provider might have to weigh a guaranteed level of income against expenses involved in striking off on their own.

“There’s more longevity,” he said. “Doctors who were going to retire because they had headaches over dealing with the system can transition to this and keep working.”

While health care providers and the federal government continue to navigate the ACA, insurance agencies also are working to pair clinics with existing plans for employers. PJC Insurance Agency LLC Corporate Life and Health Producer Andy Ebbrecht said the company is working on a new model to remove certain aspects of doctors’ office visits, such as co-pays. He believes the idea is catching on with carriers and business owners.

“We’re working on getting more DPC offices into groups so larger employers that aren’t just in Springfield can still take advantage of the benefits,” Ebbrecht said, noting at least 30 local business owners attended an informational session on the model in December though none switched because they already had renewed plans for 2016. “The majority of issues with it seemed to be timing, so starting in September and October when they receive their renewal papers will be the big push to get those groups signed up.”

Ebbrecht said the DPC-oriented plans would generate savings of roughly 20 percent on health insurance premiums for employers with self-funded plans. But the new model might not be worth it for everyone.

“If you’re a single, young person who never goes to the doctor, you probably won’t take much advantage of it – but for families or people with pre-existing health conditions who need a quarterly check-up, it’s very convenient.” Ebbrecht said.