The American healthcare system is by far the most expensive in the world. As a country, we spend 42% more on healthcare per capita than the runner-up, and the average monthly health insurance premium for a single person reached a whopping $456 in 2020[1, 2]. It’s no wonder then that so many people search for alternative solutions.

If you’re frustrated with the cost and complications of traditional health insurance, you may find the direct primary care model worth investigating. Here’s what you need to know about it, including how it works, the pros and cons, and where it might fit in your healthcare strategy.

What is Direct Primary Care?

I want to get this out of the way up front because it’s so important. Direct primary care (DPC) is not health insurance, nor is it a viable substitute for it. If you’re hoping to get comprehensive medical coverage without having to pay a health insurance premium, DPC isn’t the solution.

That said, DPC can give you access to better primary care than you’d get with the average health insurance plan, potentially at a lower price. Primary care includes the routine services that you receive from a traditional primary care physician, such as:

  • Annual checkups, physicals, and wellness visits
  • Treatment of common injuries and illnesses
  • Care coordination and specialist referrals

DPC providers won’t help you with extreme injuries or illnesses. That’s why the model isn’t a suitable replacement for traditional health insurance. For example, it doesn’t cover emergencies like heart attacks or significant medical problems like cancer.

The direct primary care model is so named because it involves patients paying a monthly or annual membership fee directly to a local physician in exchange for medical services. There’s no insurance company operating as a middleman.

Though the concept is far from unique, historically speaking, the DPC model is a relatively recent development in the United States. Practices first began to switch over to it in the 2000s.

By 2015, there were 141 DPC practices in the country, operating in 39 states[3]. Those numbers have swelled significantly in the years since. In 2022, there are roughly 1,666 DPC practices across 48 states and Washington, DC[4].

How Much Does Direct Primary Care Cost?

While the cost varies between practices, direct primary care subscriptions are typically somewhere between $25 and $150 per month for an individual. DPC providers generally set different prices for patients in various age ranges.

For example, a practice might charge:

  • $30 for anyone 25 years old or younger
  • $50 for those between 26 and 40
  • $75 for those between 41 and 65
  • $100 for anyone older than 65

👉 You can use the DPC Mapper tool to find practices near you and check their prices. Some may charge additional fees for visits or services, so double-check before committing to one.

How the Direct Primary Care Model Works

Because DPC practices only provide routine medical services, users still need to maintain some form of traditional health insurance. High-deductible health plans (HDHPs) are a popular choice. They have lower than average monthly premiums, which opens up room in the budget for a DPC fee.

Combining DPC with an HDHP is a pretty robust healthcare strategy. You get better primary care through your DCP without having to pay anything out of pocket at each visit. If something goes catastrophically wrong, your HDHP protects you.

For example, say you have a health insurance plan with a $400 monthly premium, and you’re dissatisfied with the service you receive from your primary care physician.

During the next enrollment period, you switch to an HDHP with a $300 premium and sign up for a DPC with a $50 fee. You’d pay less each month and get access to superior primary care while maintaining a financial safety net for emergencies.

Of course, the DPC and HDHP pairing isn’t ideal for everyone. For example, say you have a chronic health condition and need to see a lot of specialists. A DPC provider won’t be able to help, and you’d likely end up paying a lot more due to your higher deductible.

As a result, DPCs are typically best for those that expect to meet their needs with their DPC and save their insurance for emergencies. Alternatively, they may also be worthwhile for people who want better primary care and are wealthy enough to afford a DPC fee on top of a health insurance policy with a higher premium.

HSAs and the Primary Care Enhancement Act

Since those who use DPC often pair their memberships with an HDHP, it’s worth addressing how they affect Health Savings Accounts (HSAs). HSAs are tax-advantaged accounts that can help subsidize the cost of your healthcare.

The only way to become eligible to contribute to an HSA is to sign up for a qualified HDHP. Unfortunately, even if you have a qualified HDHP, paying for services from a DPC generally disqualifies you from contributing to an HSA.

In recent years, regulators proposed legislation known as the Primary Care Enhancement Act, which would have changed that, but it has yet to pass. As of March 2022, you still can’t have a DPC subscription and contribute to an HSA.

📗 Learn More: Interested in learning how an HSA can make your healthcare more affordable? Check out our guide to the account: What is an HSA and How Does it Work?

Direct Primary Care Pros and Cons

Now that we’ve established what direct primary care is and how it works, let’s take a look at the model’s most significant advantages and disadvantages. Consider the following before you decide to pursue it.

✔️ Pros

More Time With Your Physician

I don’t go to the doctor very often, but it’s a pretty lackluster experience every time I do. I usually sit in a drab waiting room for half an hour, run through some diagnostics with a nurse for ten minutes, and then sit by myself for another twenty minutes in an office.

Suddenly, a random physician I may or may not have met before walks in and asks me questions for ten minutes. They’ll then scribble incoherently on a clipboard, make a recommendation or diagnosis as needed, and leave me to the nurses once again.

That experience is a disappointingly common one. Time constraints are a well-documented issue for physicians offering primary care, and patient experiences suffer because of it.

Unfortunately, the traditional fee-for-service (FFS) payment system means that physicians generate revenue based on the number of patients they see each day. It incentivizes them to rush their visits and get through as many as possible each day.

Conversely, DPC providers make money primarily through monthly fees that come in whether patients visit them or not. As a result, they can afford to spend more time with each patient.

Better Doctor-Patient Relationships

The DPC model tends to facilitate better relationships between doctors and patients. In addition to lengthier and more personal office visits, some reasons for this include the following:

  • Portability: DPC subscriptions aren’t tied to your employer, so you can maintain one even if you switch jobs. As a result, you can stick with the same primary care provider for longer.
  • Fewer patients: DPC practices typically have between 600 and 800 patients, while typical primary care providers have upward of 2,000[5].
  • Open communication: DPC providers are more inclined to allow their patients to communicate with them remotely. Roughly 82% of DPC practices let patients email physicians directly, and 76% offer their services 24 hours a day[6].

Having a better relationship with your physician can only be a good thing. It makes it more likely that you’ll come in for care when you need it and enjoy the experience.

Potential Savings

If you’re at all like me, cost is probably your primary healthcare concern. Unfortunately, a DPC doesn’t mean you can responsibly ditch health insurance altogether, but it does make it easier to switch to a plan with a lower premium.

As I mentioned earlier, many people choose to combine their DPC with an HDHP. That can reduce your fixed monthly cash outflow and eliminate all copays for office visits.

There’s also evidence that the superior care you receive from a DPC makes it less likely that you’ll need to visit the emergency room or see specialists, which saves you money. Qliance reports it can reduce your healthcare costs by as much as 20%.

📗 Learn More: If you’ve ever wondered why healthcare costs so much in the United States, take a look at our analysis of the subject: Why Is Healthcare So Expensive?

Less Red Tape

While the most significant issue with our current healthcare system is probably the overwhelming cost, the complexities of dealing with health insurance companies can be almost as frustrating.

With traditional primary care, your insurance company operates as an unnecessary middleman. That can create significant issues for both you and your doctor. For example:

  • You or your physician’s office often have to file claims after you receive services 
  • Insurers may reject claims, which can lead to extended medical bill negotiation
  • Physicians make money from the services they provide rather than the value

Ultimately, getting primary care directly from a physician without insurance provider interference significantly decreases the amount of paperwork involved. It also makes the process more straightforward, transparent, and genuine.

❌ Cons

Doesn’t Eliminate the Need for Insurance

A DPC membership can be a powerful supplement to your health insurance, but it doesn’t eliminate your need for it. If you ever have a medical emergency or require services beyond the scope of primary care, your DPC provider can’t help you.

Unfortunately, the complexity of the various healthcare options out there might lead some people to believe they can get by with DPC alone. That can lead to potentially disastrous results if they have an emergency or major illness.

Alternatively, if you know that you need to keep some form of health insurance, you might find it surprisingly expensive to maintain both. After all, if you already have the health insurance plan with the lowest available premium, paying for DPC can only increase your fixed monthly outflow.

Prevents Access to an HSA

As I mentioned earlier, HSAs can be a great way to reduce the cost of your overall medical care. Your contributions are tax-deductible, growth within them is tax-deferred, and withdrawals for qualified medical expenses are tax-free.

Unfortunately, the IRS doesn’t currently condone contributing to an HSA and subscribing to DPC, even if you have a qualified HDHP.

Is Direct Primary Care Worth It?

Like many other healthcare strategies, whether a DPC membership is worth it depends on your finances and medical needs. In general, the model is most likely to benefit you if you meet the following criteria:

  • You don’t have any interest in using an HSA
  • You can afford a health insurance premium and a DPC membership
  • If an emergency occurs, you have enough money to afford a high deductible
  • You’re dissatisfied with the quality of your primary care and want a better relationship with your doctor

I know that’s a lot of caveats, but that’s not really a criticism of the model. Unfortunately, there just aren’t any easy answers when it comes to optimizing your healthcare strategy.

If you’re unsure whether DPC is right for you, look up some practices nearby and reach out to a few. They can answer whatever questions you have and help you make your decision. And remember, it’s a subscription service, so you can always give it a try and cancel after a few months if it isn’t quite what you hoped.

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