I’m going to say one thing controversial: the DPC neighborhood’s obsession with “purity” is lacking the purpose. After twenty years designing well being care monetary fashions, negotiating payer & vendor contracts, and constructing compliance frameworks, I’ve discovered that the majority different fee fashions don’t fail as a result of they’re impure. They fail as a result of somebody forgot to do the mathematics.
When $1 million can’t save a foul thought
The College of Houston medical college launched a direct major care (DPC) clinic in 2021 with a $1 million grant. 13 months later, it was gone. The autopsy centered on “purity,” whether or not it was actually DPC, whether or not the physicians had autonomy, and whether or not the mannequin was compromised by forms.
Right here’s what nobody requested: why put a membership-based follow in a closely Medicaid and uninsured space? A fundamental monetary mannequin would have revealed this earlier than they spent their first greenback:
- Sustainable DPC income: $75-$100 per member per 30 days
- Sliding price in low-income areas: ~$25-$30 per 30 days
- Ensuing hole: ~70 p.c income deficit
You’ll be able to have the purest DPC mannequin on the earth, but when your goal inhabitants can’t afford membership charges, your mannequin will fail. Not due to ideology, however due to arithmetic. That neighborhood didn’t want a DPC clinic. It wanted an FQHC with grant funding and sliding-scale charges. The failure wasn’t philosophical; it was a elementary market mismatch any operational strategist might have flagged in week one.
A peer-reviewed examine later printed in The Journal of the American Board of Household Medication confirmed what many neglected. The College of Houston’s educational DPC clinic did attain socially weak sufferers, however it in the end closed attributable to inflation, staffing ratios, and the lack to safe employer-based partnerships, not due to ideology. The authors explicitly famous that monetary sustainability, not philosophical purity, decided the result. In different phrases, the numbers, not the narrative, ended the clinic.
When practices fail attributable to insufficient capital, poor market match, or lack of operational planning, the answer isn’t extra ideological dedication. It’s offering the monetary modeling, compliance frameworks, and strategic experience that deal with these gaps.
The narrative that doesn’t maintain up
Some within the DPC neighborhood typically insist that “establishments and well being techniques can’t do DPC proper.”
Actually? Let’s have a look at the information.
CHI Well being, a part of one of many largest nonprofit techniques within the nation, launched a pure DPC program in 2017. Eight years later, they function six areas serving 5,000 members with 20 p.c decrease prices than PPO plans and better satisfaction scores. Johns Hopkins runs a number of different fee fashions concurrently: a concierge program, an worker DPC plan, and a high-risk major care program that reduce emergency visits by 60 p.c and saved $11 million.
The distinction between Houston’s failure and CHI Well being’s success wasn’t ideology. It was matching the mannequin to a market that might maintain it.
Why compliance issues, and why it doesn’t
I get introduced into doctor conversations as a result of attorneys can inform you what’s legally permissible, however not what’s operationally sustainable. That’s the place compliance meets actuality.
Take state DPC legal guidelines. Greater than 30 states have laws defining direct major care. In Texas, the statute explicitly prohibits billing insurance coverage whereas working as DPC. If you wish to cost membership charges and invoice insurance coverage in Texas, you’re not operating “hybrid DPC”; you’re operating a concierge follow.
The excellence isn’t philosophical; it’s authorized.
When a doctor says they need a “hybrid DPC,” my consulting course of begins with fundamentals: Does your state have DPC laws? If that’s the case, what does it allow? Then the strategic query: Is that this a 12-month transition to pure DPC with a transparent exit from insurance coverage, or a everlasting dual-revenue mannequin? These aren’t philosophical questions; they’re compliance and operational requirements. The solutions decide all the pieces from what you possibly can legally name your follow to the way you construction member agreements.
Too typically, physicians agonize over whether or not their mannequin is “pure” sufficient for the DPC neighborhood whereas ignoring the precise compliance dangers that might shut them down. They debate philosophy whereas lacking Stark Legislation implications, fee-splitting guidelines, and anti-kickback publicity.
When authorized doesn’t imply good
A doctor as soon as requested me to assessment a wellness program the place he wished to be the only real supplier authorizing all prescriptions, slightly than having the nurse practitioners additionally prescribe. His attorneys advised him this was authorized.
Throughout our session, I requested concerning the sorts of medicines. When he talked about they had been compounded prescriptions, I had a distinct concern: “Let’s check out the amount projections.”
After reviewing the logs and projections, the problem grew to become clear. When one supplier indicators off on tons of of compounded prescriptions per 30 days, that sample ultimately flags regulatory consideration, no matter legality.
Authorized doesn’t at all times imply good.
That’s operational compliance, constructing one thing that may stand up to scrutiny, scale sustainably, and survive in the true world.
What truly works
Right here’s what twenty years in well being care operations have taught me:
- Pure DPC works: When the market can afford membership charges.
- Concierge medication works: For sufferers who need premium entry and will pay $4,000-$10,000 yearly on high of insurance coverage.
- 12-month transition fashions work: When physicians are dedicated to going pure DPC (with membership development targets, payer exits, and clear accountability).
- Indefinite hybrids fail: As a result of they lack dedication, communication, and route.
- Market mismatches at all times fail: Irrespective of how pure your mannequin or good your compliance.
You can not subscription-model your approach out of poverty.
The true dialog we ought to be having
As a substitute of arguing about purity, let’s speak about execution.
As a substitute of dismissing institutional fashions, let’s examine what makes CHI Well being profitable.
As a substitute of assuming hybrid means uncommitted, let’s distinguish between bridges with clear endpoints and everlasting fence-sitting.
The DPC market is projected to develop from $59.5 billion in 2024 to $92.9 billion by 2034. Employers are exploring direct contracting. Over 2,600 DPC practices are working nationwide. The motion is scaling, and it’s time for the dialog to scale with it.
The most effective thought on the earth fails if it’s constructed on dangerous math or blind ideology.
The foundations of medication shouldn’t confine innovation, however neither ought to ideology blind us to operational actuality.
Dana Y. Lujan is a well being care strategist and operator with greater than twenty years of expertise throughout payers, suppliers, and well being techniques. She is the founding father of Wellthlinks, a consulting agency that helps employers and suppliers redesign care fashions via concierge and direct major care. Lujan has led multi-state community improvement, payer contracting, monetary modeling, and compliance initiatives that strengthen supplier sustainability and employer worth. She beforehand served as president of the Nevada chapter of HFMA and is pursuing a JD to develop her experience in well being care legislation and compliance. An lively creator on Medium, the place she writes on well being care innovation, direct major care, concierge medication, employer contracting, and compliance, she additionally has forthcoming publications in KevinMD, MedCity Information, and BenefitsPRO. Further skilled updates may be discovered on LinkedIn and Instagram.
