Physicians Consider Direct Care After COVID-19 Disruption

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The shutdowns from the novel coronavirus have forced a number of physicians to rethink their payment models to not just better serve their patients but to protect their cashflows.

While there are no official numbers, there is growing anecdotal evidence that physicians are exploring direct care, a practice model that replaces fee-for-service reimbursement for one that is based on monthly membership fees.

Inquiries and call volume have been up, says Adam Habig, president of Freedom Healthworks, a private firm that helps physicians make the switch to direct care. “Some insurance-based practices are reporting [to us] decreased patient demand, as people shy away from crowded waiting rooms in favor of telemedicine, private visits and other attributes of direct care,” said Habig, who is also a policy advisor to The Heartland Institute, which publishes Health Care News.

Treating patients at a time when human contact is discouraged, adapting to new and rapidly changing mandates handed down by governors and federal health agencies, and navigating new billing codes are big challenges for traditional medical practitioners confronting the COVID-19 outbreak, whereas direct care practices have already solved those problems.

Direct Care Flexibility

In effect, DCP physicians work directly for their patients, eliminating the red tape that comes with third-party payers such as Medicare, Medicaid, and insurance companies.

When the COVID-19 pandemic hit, many primary care physicians had to scramble to learn how to provide virtual office visits through telephone and video consults and deal with patients through emails and texts. Such practices are built into the direct practice business model, which has given DPC physicians a flexibility in coping with the coronavirus world that their fee-for-service colleagues lacked.

That flexibility has been long-established in DPC providers’ use of telemedicine (see related article, page 1). It was only after states ordered physician practices closed that the Centers for Medicare and Medicaid Services (CMS) issued new rules which now allow payment for telemedicine services in conventional fee-for-service practices. Although the ban was removed, physicians who want to bill Medicare for telemedicine services face a mountain of paperwork if they want to be paid. One particularly onerous CMS rule requires that virtual visits have both audio and video components, notes medicaleconomics.com, which means fee-for-practice physicians cannot get reimbursed for conventional phone consultations and other audio-only interactions.

Free of Medicare billing requirements, DPC doctors continue doing what they have always done: communicate freely via telephone, email, text, and web-based video consults. Many DPC doctors regularly communicate with their patients via email alerts, a practice that is particularly valuable to people complying with shelter-in-place orders or engaging in self-isolation during the current pandemic. Internet communication by DCP physicians also extends to social media.

Personal Safety, Financial Security

Widespread use of telemedicine by DPC physicians provides an additional layer of protection to both patients and doctors and leads to less-crowded doctors’ offices when visits are necessary during a disease outbreak.

DPC has also been able to weather the financial fallout from the COVID-19 outbreak more easily than conventional practices. Operating with a smaller staff, overhead is lower in DPC, and the fact DPC patients pay a monthly fee reduces the pressure on cash flow.

Patients participating in a DPC program can terminate the arrangement whenever they wish and opt for a fee-for-service physician. But Rebekah Bernard, M.D., a family medicine specialist in Fort Myers, Florida, reports she and most of her direct care colleagues have not suffered a net loss of business during the COVID-19 outbreak.

“My practice has normal patient attrition of about 1 percent a month: patients moving away or getting health insurance, for example,” Bernard told Health Care News. “During the last several months, I’ve lost less than the usual number of patients and received many phone calls from patients seeking to join the practice.”

Sustaining and Growing

Bernard says the popularity of DPC has withstood the problems caused by the coronavirus.

“I attribute this to a regular newsletter I send to patients to keep them informed, which many really appreciate, as well as patient anxiety about the future,” Bernard said. “They want to be sure they have a doctor they can call on if they develop symptoms or have medical needs.

“Since DPC practices are priced to be very affordable, most patients are able to retain their membership even with a decrease in income, especially since they see the value,” said Bernard. “Patients who have lost their health insurance due to job loss particularly value the model as an affordable means of care.”

Innovation, ‘Old-Fashined Comfort’

Although the concept of DPC is not new, this is the first time it has been tested in a health-care crisis, and it has come through with flying colors, says Adam Habig, president and cofounder of Freedom Healthworks and a policy advisor to The Heartland Institute, which publishes Health Care News.

“DPC is the tech-enabled, consumer-driven future of health care, and the pandemic is magnifying its natural advantages,” said Habig. “When people are sick or frightened, they value prompt access to a trusted doctor at an affordable price. This is what direct care delivers, along with clear prices and mobile convenience that today’s customers expect, wrapped within the old-fashioned comfort of doctors who truly get to know their patients,”

Habig says his consulting firm that helps physicians set up DPC practices has experienced an uptick in business.

“The pandemic has accelerated DPC’s expansion as more doctors and patients alike recognize its appeal,” Habig said.

 

Bonner R. Cohen, Ph.D., (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research and a senior policy analyst with the Committee for a Constructive Tomorrow (CFACT).

 

 

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