More doctors embrace membership fees, shun health insurance
After a billing miscommunication with their health insurance company, David and Danielle Coupe of Palatine, Illinois, suddenly found themselves uninsured in mid-2016.
But the couple didn’t panic. They began searching for alternatives. Soon, they found Dr. Jill Green’s Bannockburn, Illinois, practice, MedLogic, which charges patients monthly membership fees and doesn’t accept insurance. The couple paid Green about $140 a month for unlimited office visits, certain services and discounted medications and lab tests.
They could reach Green at any time, and she didn’t seem rushed. “When you take (insurance) out of the equation, it’s like, wow, the doctor actually has time to spend with you and answer questions and give you care,” said David Coupe, 47.
In recent years, many consumers have grown frustrated with the rising costs of health insurance, and many doctors have felt stymied by a system that expects them to see high numbers of patients. In response, a growing number of consumers and medical professionals are seeking alternatives, including direct primary care. Direct primary care practices often charge patients monthly membership fees of anywhere from $35 to hundreds of dollars a month for visits and other services. Fees can sometimes vary based on family size and age, and some practices also offer memberships to employers for their employees.
Advocates of the model hail it as better for patients looking for more personal, convenient care and as a solution for harried doctors who want to focus on patients, not paperwork. Direct primary care doctors tend to see far fewer patients than traditional primary care physicians.
Concerns: Critics, however, caution that it’s no replacement for traditional health insurance and worry about its implications. They warn that patients who have such memberships and insurance are overpaying for their health care. They’re also concerned that a proliferation of the practices could worsen a shortage of primary care doctors and/or attract healthy people away from the individual insurance market, making individual insurance coverage more expensive for those who continue to buy it.
More than a dozen direct primary care practices have popped up in the Chicago area, and there may be more than 800 across the country, according to Dr. Philip Eskew, a direct primary care physician and attorney in Wyoming who tracks the industry.
The concept is similar to concierge medicine, which for years has allowed wealthy patients to pay fees for more personal, accessible care. Direct primary care advocates, however, say their model is different because it caters to patients across the economic spectrum. And they say that concierge doctors still often bill insurance on top of collecting patient fees, while direct primary care physicians generally do not.
“This is a way for the middle class to have clinicians on speed dial,” said Matthew Bates, a managing director at consulting firm Huron in Chicago.
Finances: In fact, many patients choose direct primary care for financial reasons.
Stephanie Wong, a two-time cancer survivor, was tired of receiving surprise bills for thousands of dollars for services she thought her insurance would cover. So Wong sought out a direct primary care practice and found Green.
During her first visit, Green’s nurse practitioner explained the relatively low prices for lab work. “I almost cried because it was so incredibly transparent, because I knew exactly how much I was going to be paying,” said Wong, 34.
She now pays Green a membership fee of $72 a month. But she also kept her high-deductible insurance plan in case of a major medical need.
“What direct primary care does is says you don’t need health insurance for these low-hanging items, for a pap smear or to get blood work done,” Green said. “Don’t use your insurance to pay for that because you’re going to end up being charged way more.”
Hopes: Another one of Green’s patients, Terry Bodi of Sturtevant, Wisconsin, doesn’t have insurance at all. The 46-year-old, who works in shipping and receiving, stopped buying coverage in 2016 after estimating that insurance would cost him about $15,000 a year – a cost he said he simply can’t afford.
He hoped for good health. That hope was shattered when he learned he had stage 2 throat cancer. A friend referred him to Green, who helped him find low-cost tests and services. Though he still had to pay other doctors for cancer treatment, bills he said he’ll be paying “until the day I die,” Green helped him minimize the financial damage as much as possible.
Now in remission, he still sees Green to monitor his health.
Green worked as an employed physician in Wisconsin before opening her direct primary care practice about two years ago. She had grown tired of the increasing number of reports required by insurers and concerned that patients sometimes had to wait months to see her.
Burnout: Many of the physicians who turn to direct primary care do so because they’re burned out on working with insurers within the traditional system, said Dr. John Bender, CEO of a partial direct primary care practice in Colorado who serves on the board of the American Academy of Family Physicians. Much of the growth in direct primary care has been over the last five years as that frustration has grown and patients, especially those with high-deductible insurance plans, have become increasingly price conscious, he said.
“These are highly trained individuals. They didn’t go to medical school to fill out forms and argue with insurance companies about prior authorizations,” Bender said. “They’re kicking that system out of their exam room.”
Dr. Alex Lickerman, who co-owns direct primary care practice ImagineMD in downtown Chicago, said he’s able to spend more time with patients because he sees fewer of them than primary care doctors who work with traditional insurers. He spent 20 years working at the University of Chicago Medical Center as a doctor and administrator before he and his wife opened ImagineMD in 2016. Like Green, he wanted to spend more time caring for patients and less time on administration.
ImagineMD charges patients $149 a month, which includes visits and some services such as stitches, EKGs, joint injections and flu shots. Patients have to pay extra for lab work and medications, but they get discounted rates. Direct primary care allows him to have a predictable revenue stream each month without the costs of working with insurers.
“With direct primary care, you don’t need a lot of the expenses a traditional doctor’s office needs, so we can run very mean and lean,” Lickerman said.
Home visits: Dr. Amber Price opened a direct care practice, Willow Pediatrics and Lactation, out of her Little Italy home this year. She often makes house calls for her newborn patients, for whom she charges $250 a month. That fee goes down each year as patients grow older, until it reaches $100 a month at age 5.
“It’s going back to the way medicine used to be,” Price said. “When I envisioned being a pediatrician, this is the type of way I envisioned giving care.”
It’s a type of care that appeals to many patients, even those who aren’t looking to save cash.
Tom Reiter, of Mokena, has Medicare, so being a member of Lickerman’s practice doesn’t save him money. But he said it’s eased his anxiety about his health.
When Reiter, 75, awoke with a swollen right leg this winter, he called Lickerman. Within three hours, he was sitting in Lickerman’s office, where Lickerman had arranged for a technician to perform an in-office Doppler ultrasound on Reiter. He discovered a clot behind Reiter’s right knee and came up with a treatment plan.
“It costs a little bit, but the peace of mind that it grants me is that I can contact him at any time with any problem or any concern … or just to talk,” Reiter said. “That’s a comfort that I had not known ever before in my life.”
Emily Golin, 25, of Chicago, said she talks to Lickerman at least once a week.
She recently realized just before leaving on an international trip that she had run out of one of her medications. She called Lickerman that evening and was able to pick up more medication from a pharmacy within an hour.
“It was just so appealing to me that there was finally a primary care doctor who actually believed they should be available to you when you actually need a doctor,” Golin said.
Skeptics: Some, however, are skeptical of the model.
“It has good (public relations) but I think when people take a serious look at it, it’s not all it’s cracked up to be,” said Robert Berenson, an institute fellow at the Urban Institute.
For one, he worries that it could exacerbate an existing shortage of primary care doctors. That’s because direct primary care doctors see far fewer patients than traditional primary care doctors.
He also questions whether direct primary care doctors can really address as many of a patient’s health needs as they claim.
Some critics say it can also inflate costs. If a patient is covered by insurance and paying monthly membership fees to a direct primary care doctor, that patient is essentially being double billed, said Cathryn Donaldson, a spokeswoman for insurance industry group the America’s Health Insurance Plans, in an email.
If patients wait until they’re seriously ill to buy insurance, that can upset the balance of sick and healthy people, called risk pools, that insurers rely upon, she said. “Direct primary care arrangements significantly harm patients by increasing costs and distorting risk pools,” Donaldson said.
Legality: State laws on direct primary care practices vary. The Illinois Department of Insurance recently confirmed that it does not consider direct primary care practices to be insurance, a stance that makes it easier for such practices to operate.
Federal tax law, however, treats direct primary care practices as health plans, meaning consumers are not now allowed to use health savings account money to pay membership fees without incurring a penalty, according to the American Academy of Family Physicians. Congress is considering a bill that would change that.
Direct primary care doctors acknowledge that their membership models are no replacement for insurance. Patients should still have insurance in case they need big-ticket items that aren’t covered by direct primary care, such as surgeries and hospital stays, they say. But they and their patients dismiss many of the other criticisms.
They see direct primary care as the wave of the future in medicine, and it’s caught on with more than just primary care practices. Some dental practices use similar models, and an urgent care clinic in Skokie, UltraMed Urgent Care, just opened, offering individual memberships for $75 a month.
Eskew, the direct primary care doctor who tracks the industry, said he adds about 200 new direct primary care practices across the country to his list each year.
“As long as people care about price and quality, it should keep growing,” he said.